Business Ethics Chapter 2

Stakeholder Model of Corporate Governance

A company must answer to other stakeholders including employees , suppliers , government regulators. Communities and special interest groups must determine which of their steak holder are primary then implement corporate governance mechanisms to promote development of long term relationships.

Stakeholder Interaction Model

Conceptualization of the relationship b/w businesses and stakeholders and explicitly acknowledges that the dialogue exists between a firms internal and external environments

Executive Compensation

Corporate boards decisions on how much to pay / compensate top executives ensuring integrity of the companys financial reporting systems .

Stakeholders

Customers , shareholders , employees , suppliers government agencies , communities, and many others who have claim in some aspect of a companies products , operations , markets , industry & outcomes .

Shareholder Model of Corporate Governance

Founded in classic economic precepts , including the goal of maximizing wealth for investors and owners. Focases on developing and improving the formal system for maintaining performance accountability between top management and the firms share holders.

Interlocking Dictorate

The concept of board members being linked to more than one company not considered illegal unless it involves a direct competitor

Stakeholder Orientation

The degree to which a firm understands and addresses stakeholder demands comprises of 3 sets of activities . organization , distributin of information, responsiveness of the organization as a whole to this information.

Reputatioin

a organizations greates intangible assets with tangible value

Secondary Stakeholders

do not engage directly and arent essential to its survival . Media , trade associations & special interests groups such as American Association of refined People ( AARP)

Corporate Citizenship

expresses the extent to which businesses strategically meet the economic , legal, ethical, and philanthropic responsibilities placed on them by various stakeholders

Corporate Governance

involves te development of formal systems of accountability oversight and control . Removes the opportunity for employees to make unethical decisions.

Primary Stakeholders

those whose continued association & resources are sbsolutly necessary for a firms survival. Employees , customers & shareholders , governments & communities