Appeasement and Corporate Conscience

Abstract

This paper frames a debate on the presence of interdependent and appeasing relationships among the various stakeholders and participants of a corporate community. This sense of appeasement renders ineffective, any regulation that�s incremental and narrowly focused on controlling fraud and rewarding their exposure. The current anti-fraud regulations address a range of issues from conflicts of interest, whistle blower protection, executive pay, independence of auditors and the board, separation of powers between the chairman and chief executive, stakeholder rights and even morality of greed. But these issues are largely treated in the context of opportunity for fraud and motivation for its exposure. This narrow and incremental focus fails to explain why regulations are proving ineffective in controlling the ever increasing instances of fraud and also why the current incentives and protections aren�t increasing the rates of exposure. This leads to a consideration that interdependent, appeasing relationships create a complex web of conflicts of interest�-the so called �soft conflicts�-�that elude regulations. The newer emphasis on fostering a culture of good corporate governance fails to acknowledge the most probable custodians of corporate conscience and relies on the �tone at top� to enforce ethics through the organization structure. This approach fails to properly address the conscious subversion and pretence of good governance by the executive management. The authors opine that the �tone at top� should really be enforced on the executive management by the most probable and most capable custodians of the corporate conscience