Corporate governance and ethical culture: Do boards matter?

Alexandre Di Miceli da Silveira ()
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Alexandre Di Miceli da Silveira: Fundacao Escola de Comercio Alvares Penteado (Fecap)

Review of Managerial Science, 2022, vol. 16, issue 4, No 6, 1085-1116

Abstract: Abstract A poor ethical culture has been considered one of the reasons for the emergence of many corporate governance scandals. In this paper, I investigate the link between ethical culture and the composition of the board of directors for a sample of Brazilian companies. My measure of ethical culture is based on a text analysis of around 50,000 employee reviews posted at Glassdoor for over 1,400 terms related to five ethical dimensions: organizational trust, ethical leadership, benevolent orientation, empathy, and speaking out & efficacy. I find partial support for the hypotheses that a higher ratio of independent directors and of women on boards are associated with better ethical culture. My strong results, in turn, refer to a corporate governance feature little discussed in the literature: the percentage of board members appointed by minority shareholders. In this case, all models exhibit a strong negative relationship between the ratio of such directors and ethical culture. To my knowledge, this is the first paper to document a link between ethical culture and corporate governance mechanisms.

Keywords: Ethical culture; Corporate governance; Board of directors; Organizational culture; Online reviews; G30; G32; G34; M10; M14; M54 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s11846-021-00476-7

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