BOARD ETHICAL COMMITMENT AND CORPORATE PERFORMANCE: A QUALITATIVE PERSPECTIVE

• Published in: Corporate Board: Role, Duties and Composition
• Main Author: Salin A.S.A.P.; Ismail Z.; Smith M.
• Format: Article
• Language: English
• Published: Virtus Interpress 2024
• Online Access: https://www.scopus.com/inward/record.uri?eid=2-s2.0-85205246674&doi=10.22495%2fcbv20i3art1&partnerID=40&md5=c40cb2e84b758127102d3f61b6b6d50b

The purpose of the study is to explore the responsibilities of directors in creating a good ethical culture in their organisation and examine whether good ethical practices are able to enhance a company’s performance. To achieve this purpose, face-to-face semi-structured interviews with directors as the respondents are employed as a data collection method. This study found that board ethical commitments are necessary elements for sustaining the good performance of a company. The planning and monitoring of these ethical practices are the responsibilities of the board of directors, which then will be executed by top management, led by the chief executive officer (CEO). To ensure effectiveness, the code of ethics should not merely be a statement of intent but must be institutionalised and embedded in the working environment of the company. Trust, regulatory compliance, and good reputation are among the benefits derived if a company has good ethical practices. The result provides evidence of the roles and duties of the directors in nurturing a good ethical culture, which can lead to the sustainable performance of the company. This study is original as it examines corporate ethical issues by using a qualitative approach and considers the contribution of ethical elements from the directors’ point of view, which is rare in business ethics literature. This study contributed by assisting the companies in formulating clear policies and guiding directors’ ethical behaviours in order to hold them accountable for decisions made in the company. This will ensure directors make responsible and appropriate decisions in discharging their duties as directors. © 2024 The Authors.