Essay on Government Oversight and Corporate Ethics

Essay on Government Oversight and Corporate Ethics

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Ethical corporate behavior has been a recurring issue of public policy. Recent events have brought this issue into sharp focus beginning with the Enron scandal in 2001 and more recently the financial crisis of 2008. Subsequent regulation such as the Sarbanes-Oxley act seem to be in reaction to the public clamoring for government action in the wake of painful economic outcomes. A deeper examination of the events leading up to Enron and the financial crisis both seem to indicate that government agencies were asleep at the switch. Policy such as Sarbanes-Oxley in the wake of Enron have not prevented the more recent financial crisis of 2008. Government social policy has not promoted corporate ethical responsibility but rather mandated poor business practice. Responsible social policy, effective government oversight, and strict corporate liability for misconduct will ensure economic stability into the future.
Business ethics, it its broadest sense, is a “consensus of what constitutes right or wrong behavior in the world of business and application of moral principles to situations that arise in a business setting.” (Cross & Miller, 2012, p. G-4). Corporations by their very nature have a direct responsibility to shareholders who are collectively the owners of the corporation. Although shareholders have the ability to direct corporate policy through participation in shareholder meetings and putting shareholder proposals to vote, commonly reffered to as corporate governance, few shareholders have a direct view of every day workings inside a large company like Enron. Responsibility lies with the board of directors and their executives to exercise duty of care, duty of loyalty and disclose and conflicts of interest which may arise (Cross ...

... middle of paper ...

...est illustrated with an old Chinese saying; Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.

Works Cited

Cross, F. B., & Miller, R. L. (2012). The legal environment of business: Text and cases (8th ed.). Mason, OH: Cengage.
Elliot, D. J., & Bailey, M. N. (2009). Telling the narrative of the financial crisis: Not just a housing bubble. Retrieved from /papers/2009/11/23%20narrative%20elliott%20baily/1123_narrative_elliott_baily.pdf
Hart, O. (2009). Regulation and sarbanes-oxley. Jpurnal of Accounting Research, 47(2), 437-445. doi:10.1111/j.1475-679X.2009.00329.x
Wallison, P. J. (2011). Three narratives about the financial crisis. CATO Journal, 31(3), 535-549. Retrieved from 67075495&site=ehost-live

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