Corporate Governance and Social Responsibility

Governance is an issue that has come to the fore recently as a direct cause of problems associated with the financial and economic crisis. Financial arbitrage, short sellings, toxic assets, management excessive bonus, golden parachutes and corruption populate our discussions as signs of malfunctions of the market and lack of corporate social responsibility. Some economists tend to justify these as moral hazard, but others argue that the overall significance of it is largely understated by the mere observation of managerial misbehavior, which forms the tip of the iceberg. The submerged part of the iceberg is the institutional response in terms of corporate governance and the consequences of economic liberalization and deregulation of industry and business in an increasing globalized world.

At the same time, management and corporations are increasing facing public demand for new corporate ethos, a stricter compliance with both public and private/civil regulation and the assumption of responsibilities related to emerging social and environmental issues such climate change, labor exploitation, health security, etc.

Managers face questions such as: how do I deal with conflicts of interests? What mechanism of corporate control can I use to ensure ethical behavior in shareholders and management? Is my business model ready to deal with social issues (such obesity, diabetes 2, HIV-AIDS) that will affect many of my employees and customers? What is my responsibility in the problem? We will explore how corporate governance based on social responsibilities is becoming both a condition for business survival and a potential competitive advantage.
Our course will include the explanation and de-construction of some of the current strategic management theories (such as principal-agent theory and concepts such moral hazard) together with some theories central to the new political view of business in society that we are proposing such business ethics, stakeholder view of the firm, theory of social contract, etc.

This is primarily a discussion based course, where real life case studies are posed to students on complex topics in which students engage first hand in the discussion and debate that they will undoubtedly face as future managers in business.

In this course we are exploring questions mainly through cases and discussion. Therefore your active participation and engagement throughout this course is necessary. We do expect a lively debate in the classroom and learning by confrontation.