1. "Issues in the Governance
of Business: The Aftermath
of America's Sarbanes-
Oxley Act of 2002"
Aliza Racelis, PhD
College of Business,
U.P. Diliman
2. BACKGROUND
• Businesses make the goods and services
you use each day.
• The U.S. is the largest producer of goods
and services in the world. Americans
consume more than any other country.
• All businesses worldwide produce more than
$40 trillion of goods and services.
• U.S. businesses are responsible for almost
29 percent of world production. Nearly 24
million full- and part-time businesses
produce those goods and services.
3. BACKGROUND
• Businesses,
therefore, play
a major role in
keeping any
economy
alive.
• It is, therefore,
necessary to
ensure the
proper and
ethical
governance of
businesses.
4. BACKGROUND
• increasing pressure on the corporate world -
accountability failures leading to bankruptcies and
restatements of financial statements.
• crisis of investor confidence (Racelis, 2010;
Walker, 2005).
5. As a reaction to a number
of major corporate
and accounting
scandals including those
affecting Enron, Tyco
International, Adelphia,
Peregrine Systems, and
WorldCom, the Sarbanes–
Oxley, Sarbox or SOX
was enacted in 2002.
6. In response to the
perception that stricter
financial governance laws
are needed, SOX-type laws
have been subsequently
enacted in Japan, German,
France, Italy, Australia,
India, South Africa, Turkey
and the Philippines.
7. • Organization for
Economic
Cooperation and
Development (OECD),
• Philippines Code of
Corporate
Governance (Echanis,
2006; Wong, 2009)
(Philippine
Management Review).
8. • A significant body of academic
research and opinion exists regarding
the costs and benefits of SOX, with
significant differences in conclusions.
Debates continue over the perceived
benefits and costs of SOX.
• …businesses should be more keenly
aware of the need to practice genuine
corporate social responsibility and to
aim at true sustainable development.
9. When the ethics of business is not properly
and sufficiently discussed, businessmen may
become oblivious to their social responsibility:
• responsibility to consumers as manufacturers
of ethical goods,
• responsibility to human resources as
employers,
• responsibility to the environment as
ecological caretakers, and
• responsibility to society as economic agents
aiding in the achievement of economic
development.
10. This presentation: social and ethical
aspects of business!
• in the realm of production of goods
that are truly good and rendering
of services that truly serve,
• in the ethics of care with which
business looks after human
capital, and
• in the realm of moral education.
12. ‘‘The Parable of
the Sadhu’’
‘
‘
describes a
T
Wall Street
h
e
executive who
lost his sense
P
of a
rhumanity on
a Himalayan
a
b
mountain-
l
climbing
e
expedition
o
(McCoy, 1983).
f
t
h
e
S
a
13. Do businesses exercise an
ethics of care when looking
after human capital? Do
companies appreciate the
task of promoting the true
good of the whole person?
Positive Dimensions of
Population Growth
https://sites.google.com/site/positivedimens
14. “We cannot give in to the
‘population bomb’ scare —the
widespread use and
dissemination of artificial
contraceptives, which in reality
eventually lead to more
abortions, divorces,
destruction of family life, etc.—,
for this can have serious
economic consequences for
the long-term and sustainable
development of human
societies, apart from not
treating any medical condition
(Villegas, 2011).”
15. • “Ethics of care”: ethical management of
human resources.
• Human capital —referring to the skills and
knowledge that can make every person
productive— is known to bear an
important correlation with performance
and growth.
In the study of the so-called
“Bottom-of-the-Pyramid” (BOP)
market, it has been suggested that
it may be more morally correct to
deal with the BOP markets in such
a way as to make them productive
suppliers or employees, instead of
the more manipulative strategy of
milking the poor
16. The significance of human capital was further emphasized
when Human Development Index (HDI) was introduced in
the early 90’s:
“Development is not only about national income but
primarily about improving people’s capabilities and
well being. The most essential of these aspects are the
capacity to have access to education, to have long and
healthy life, and to lead a decent standard of living.”
17. • Considering that several nations are
perilously close to what population
experts call an irreversible demographic
decline, there is no need for any State-
sponsored population control program
which can be counter-productive over the
long run, as can be gleaned from the
demographic crisis being faced by such
countries as Singapore and Japan.
18. Augmenting human capital by
expanding education, improving
health conditions, and creating an
economic environment have
greater returns that can be
generated by the world’s human
resources (Villegas, 2011).
19. The increasing popularity of the Human Development
Index (HDI) has opened the eyes of many that a rapid
growth of GDP may lead to more human misery if it is
not accompanied by a more equitable distribution of
income and wealth as well as increased access to
education and health among the masses.
Lord Peter Bauer: “worries about population growth
reflect a patronizing view that the poor are incapable
of making sensible choices about having children…”
23. Are business schools addressing
the need for a fine-tuned moral
education and responding to the
demand to redress unsustainable
business practices?
24. These, and more,
ought to be matters
for reflection among
business leaders, in
America and
elsewhere.
THANK YOU!
aliza.racelis@up.edu.ph
