Topic > Government Oversight and Business Ethics - 2011

Ethical business behavior has been a recurring issue in public policy. Recent events have brought this issue into the spotlight starting with the 2001 Enron scandal and, more recently, the 2008 financial crisis. Subsequent regulations such as the Sarbanes-Oxley Act appear to be a reaction to public demand for government action in the wake of the painful economic consequences. A closer examination of the events leading up to Enron and the financial crisis both seem to indicate that government agencies were asleep at the time of the change. Policies such as Sarbanes-Oxley in the wake of Enron did not prevent the most recent financial crisis of 2008. Government social policy did not promote ethical corporate responsibility but rather enforced inappropriate business practices. Responsible social policy, effective government oversight, and rigorous corporate accountability for misconduct will ensure economic stability into the future. Business ethics, in its broadest sense, is a “consensus on what constitutes right and wrong behavior in business and the application of moral principles.” principles to situations that arise in a business context". (Cross & Miller, 2012, p. G-4). Corporations by their very nature have a direct responsibility to shareholders who are collectively the owners of the corporation. Although shareholders have the ability to direct corporate policy through participation in shareholder meetings and putting shareholder proposals to a vote, commonly referred to as corporate governance, few shareholders have direct insight into the day-to-day work within a large company like Enron. The responsibility lies with the board of directors and its officers to exercise the duty of care, the duty of loyalty and to disclose conflicts of interest that may arise (Cross ...... center of sheet ...... est illustrated with an old Chinese saying: Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime. Works CitedCross, FB, & Miller, RL (2012 The Legal Environment of Business: Text and Cases (8th ed.). Mason, OH: Cengage.Elliot, DJ, & Bailey, MN (2009) Telling the story of the financial crisis: Not just a housing bubble. Retrieved from http://www. brookings.edu /~/media/research/files /papers/2009/11/23%20narrative%20elliott%20baily/1123_narrative_elliott_baily.pdfHart, O. (2009) Accounting Research regulation and sarbanes-oxley, 47(2), 437 -445. doi:10.1111/j.1475-679X.2009.00329.xWallison, PJ (2011) Three Tales of the Financial Crisis, 31(3), 535-549 .com/login.aspx?direct=true&db=aph&AN= 67075495&site= ehost-live