The role of values in corporate governance

Marne Arthaud-Day

Chapter 11 in Research Handbook on Corporate Governance and Ethics, 2023, pp 192-209 from Edward Elgar Publishing

Abstract: Given that values predict attitudes and behavior, it follows that values play a central role in corporate governance. Leaders’ values guide their selection and evaluation of strategic goals (formulation) and how they translate those goals into action (implementation). As they are engaged through practice, managerial values become a shared part of organizational culture, shaping the context in which employees carry out the firm’s mission (internal environment). External stakeholders have their own value priorities, which drive their demands on corporate behavior (external environment). Whenever there is misalignment within this system, there is potential for conflict and the achievement of strategic goals is impeded. Thus, from a values-based perspective, the primary purpose of corporate governance is to create internal and external alignment around the firm’s values and to minimize opportunistic behavior when value congruency is not possible.

Keywords: Business and Management; Economics and Finance; Environment (search for similar items in EconPapers)
Date: 2023
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