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Corporate Codes of Ethics: Can Punishments Enhance Their Effectiveness?

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Corporate Governance and Business Ethics

Part of the book series: Studies in Economic Ethics and Philosophy ((SEEP,volume 39))

Abstract

Corporate codes of ethics are written statements about moral norms which are issued by the respective company and which shall obligate corporate actions. In essence, these documents shall promote ethical behavior within the company and make corporate misbehavior to occur less likely. In this article, we argue that properly designed and executed punishments can be viewed as a promising, and even indispensable, measure for enhancing code effectiveness. Based on theories of sanctions, the proper design and execution of punishments has to consider output and process determinants of sanctions. Output determinants are sanction severity, certainty and celerity. In contrast to deterrence theories, we do not propose that punishments necessarily promise to be the more effective the more severe, certain and celeritous they are. Rather, considerations of justice and process determinants suggest a more deliberate specification of the outcome values. Process determinants demand to treat (potential) code offenders with respect, to offer them the opportunity to explain their case and to make sanction decisions unbiased as well as transparent.

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Authors and Affiliations

  1. Witten/Herdecke University, Witten, Germany

    Till Talaulicar (Professor of Corporate Governance and Board Dynamics)

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  1. Till Talaulicar
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Correspondence to Till Talaulicar .

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  1. Inst. Philosophie, Universität Bayreuth, Universitätsstr. 30, Bayreuth, 95447, Germany

    Alexander Brink

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Talaulicar, T. (2011). Corporate Codes of Ethics: Can Punishments Enhance Their Effectiveness?. In: Brink, A. (eds) Corporate Governance and Business Ethics. Studies in Economic Ethics and Philosophy, vol 39. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-1588-2_5

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