Protecting Shareholder Value: Unethical Corporate Leadership Threatens the American Dream
Protecting Shareholder Value: Unethical Corporate Leadership Threatens the American Dream

Summary/Abstract: This paper reviews some of the most prominent corporate ethical scandals reported by public media. Despite the existence of a growing number of corporations with written policies on ethical conduct, unethical behavior appears to remain unabated. This situation confirms that handbooks and manuals with policies and compliance rules regarding codes of ethics or conduct are inadequate to control unethical practices. The review shows that the aggressive pursuit of policies and practices that are primarily designed to increase shareholders’ value is the major contributor to unethical behavior in the workplace. Ironically, such practices have instead resulted in extravagant losses in shareholders’ value. The paper argues that written rules should be reinforced with a culture of ethical practices based on heightened awareness of conflict of interest, diversity, team work, practices that encourage speaking up, clear communication, sensitivity to the use of power and influence, and reasonableness of performance expectations. The purpose of this paper is to explore the financial impact of unethical corporate leadership on shareholder value. The paper suggests ways in which an ethical culture is achievable and sustainable in corporations.

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