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Institutional Impediments to Voluntary Ethics Measurement Systems

Author

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  • O. Stovall
  • John Neill
  • Brad Reid

Abstract

In this paper, we argue that calls for widespread implementation of ethics measurement systems would be better informed by institutional economic analysis. Specifically, we assert that proponents of such systems must first recognize and understand the institutions that potentially impede such efforts. We identify two potential institutional impediments to measuring ethics and social responsibility. First, we suggest that neoclassical economics, supported by traditional business education and legal precedent, serves to reinforce the notion that shareholders are the primary corporate constituency group. Such an emphasis on the needs of shareholders severely hinders implementation of measurement systems that address the needs of multiple stakeholder groups. Second, we argue that the threat of litigation may constrain corporate managers from measuring and considering ethics and corporate social responsibility matters. In particular, managers may be reluctant to quantify various ethical concerns if the resulting measurements could be used as evidence against the corporation in a lawsuit. Copyright Springer 2006

Suggested Citation

  • O. Stovall & John Neill & Brad Reid, 2006. "Institutional Impediments to Voluntary Ethics Measurement Systems," Journal of Business Ethics, Springer, vol. 66(2), pages 169-175, June.
    • Handle: RePEc:kap:jbuset:v:66:y:2006:i:2:p:169-175
    DOI: 10.1007/s10551-005-5574-2
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    Citations

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    Cited by:

    1. Steven Scalet & Thomas Kelly, 2010. "CSR Rating Agencies: What is Their Global Impact?," Journal of Business Ethics, Springer, vol. 94(1), pages 69-88, June.
    2. Curtis Clements & John Neill & O. Stovall, 2009. "The Impact of Cultural Differences on the Convergence of International Accounting Codes of Ethics," Journal of Business Ethics, Springer, vol. 90(3), pages 383-391, December.

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