Ethical Leadership, Sustainable Governance, and the Prevention of Fraud

Aliza Racelis ()
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Aliza Racelis: Virata School of Business, University of the Philippines

A chapter in Corporate Governance, Organizational Ethics, and Prevention Strategies Against Financial Crime, 2025, pp 323-338 from Springer

Abstract: Abstract Corporate culture and corporate ethics can help reduce or eradicate fraud in companies by creating a positive and supportive environment that encourages employees to behave more honorably. It is a culture of character that can help more effectively in the reduction of corporate fraud; but the creation of such values-based organizations must begin at the top. The implementation and reinforcement of ethical leadership among the top management can help prevent corporate crimes: literature has pointed to the important role of tone at the top in mitigating corporate fraud behavior and, consequently, acting as a pivotal point to achieve sustainable corporate governance. Organizational socialization, which involves transmitting organizational and role information to newcomers, is crucial to the creation of ethical leadership. Ethical learning should be an ongoing process that encourages moral reflection in order to foster an ethical organization. This chapter emphasizes the importance of ethical leadership, ethical learning, aligning ethical management strategies with the organizational climate, promoting sustainable governance, and preventing fraud through effective communication and accountability.

Keywords: Ethical leadership; Corporate ethics; Organizational culture; Corporate governance; Tone at the top; Organizational socialization; Sustainable governance; Corporate fraud (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:csrchp:978-3-031-74523-2_15

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DOI: 10.1007/978-3-031-74523-2_15

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