Corporate governance and ethical culture: Do boards matter?

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Date: May 2022
From: Review of Managerial Science(Vol. 16, Issue 4)
Publisher: Springer
Document Type: Report; Brief article
Length: 219 words

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Abstract :

Keywords: Ethical culture; Corporate governance; Board of directors; Organizational culture; Online reviews 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. Author Affiliation: (1) Alvares Penteado School of Business, Fundacao Escola de Comercio Alvares Penteado (Fecap), São Paulo, Brazil (a) alexandre.miceli@fecap.br Article History: Registration Date: 05/19/2021 Received Date: 01/08/2020 Accepted Date: 05/19/2021 Online Date: 06/09/2021 Byline:

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Gale Document Number: GALE|A702342478