Journal of Business Ethics

, Volume 110, Issue 1, pp 45-59

First online:

Open Access This content is freely available online to anyone, anywhere at any time.

Cultural Dimensions, Ethical Sensitivity, and Corporate Governance

  • Alex W. H. ChanAffiliated withSchool of Economics and Finance, Faculty of Business and Economics, The University of Hong Kong Email author 
  • , Hoi Yan CheungAffiliated withDepartment of Applied Social Studies, City University of Hong Kong


The economic globalization process has integrated different competitive markets and pushes firms in different countries to improve their managerial and operational efficiencies. Given the recent empirical evidence for the benefits to firms and stakeholders of good corporate governance (CG) practice, it is expected that good CG practice would be a common strategy for firms in different countries to meet the increasingly intense competition; however, this is not the case. This study examines the differences in CG practices in firms across different countries using the concept of ethical sensitivity. Through the regression analysis of 271 firms in 12 countries and regions, it is found that Hofstede’s cultural dimensions can explain the differences in CG practices. Furthermore, the results demonstrate the influence of culture on ethical sensitivity, which eventually determines the CG practices in different regions.


Ethical sensitivity Corporate governance Cultural dimensions Emerging markets Behavioral finance