A Target Liberty Reader Debates His Professor About Corporate Ethics

Douglas Delgado-Landaeta emails:

Here it is an exchange that I had with my professor in one of my Masters course, while discussing the role of corporate governance.  

Issues of corporate governance are being continuously reviewed by many researchers, primarily in the context of the theory of the firm and issues of internalization of the FDI as one of the key activities of the MNCs.  Issues of corporate governance become more complex in terms of their implementation and control when companies grow and establish multiple subsidiaries throughout the world with host countries cultural differences, political, ethnic etc.

In addition, as pointed out Windsor (2009) there still were issues with confusion over the proper understanding of the governance, growing pressures from investors, exchanges, and regulators foradherence to recommended standards and practices to increase financial transparency and fiduciary accountability. There are also growing pressures as to CSR and the triple bottom line performance

References

Windsor, D. (2009). "Tightening corporate governance." Journal of International Management 15(3): 306-316.  doi: 10.1016/j.intman.2009.02.003

My Reply:

Corporate Responsibility, an "ethical" company, and "good" corporate governance are not only flawed expectations at their core, but also absurd.

Companies, unlike governments, make profit by serving consumer demands thus it is a win-win situation. They serve the public interest by satisfying demand and outsmarting their competitors, unlike governments, which only coerce the free and voluntary exchange (Kee, 1995).

If there ought to be an ideal definition of CSR or an ethical company must be that its management respects someone else's private property by staying away from the government and not lobbying for their own self-interests. Last but not least, their primarily role would be to satisfy consumer demands while making money for their owners.

Reference:

Kee, J. (1995) 'The Ethical Corporation?.' The Free Market. Vol. 13 (5). Available at: http://mises.org/library/ethical-corporation (accessed: February 8, 2015)