Fort, Timothy L. 1996. Business as Mediating Institution. Business Ethics Quarterly, Vol. 6, Issue. 2, p. 149.
Burton, Brian K. and Dunn, Craig P. 1996. Feminist Ethics as Moral Grounding for Stakeholder Theory. Business Ethics Quarterly, Vol. 6, Issue. 2, p. 133.
Wicks, Andrew C. 1996. Overcoming the Separation Thesis. Business & Society, Vol. 35, Issue. 1, p. 89.
Fort, Timothy L. 1997. From the Universities to the Marketplace: The Business Ethics Journey. p. 171.
Vidaver-Cohen, Deborah 1998. Motivational Appeal in Normative Theories of Enterprise. Business Ethics Quarterly, Vol. 8, Issue. 3, p. 385.
Jones, Thomas M. and Wicks, Andrew C. 1999. Convergent Stakeholder Theory. The Academy of Management Review, Vol. 24, Issue. 2, p. 206.
Marens, Richard and Wicks, Andrew 1999. Getting Real: Stakeholder Theory, Managerial Practice, and the General Irrelevance of Fiduciary Duties Owed to Shareholders. Business Ethics Quarterly, Vol. 9, Issue. 2, p. 273.
Vidaver-Cohen, Deborah 2001. The Next Phase of Business Ethics: Integrating Psychology and Ethics. Vol. 3, Issue. , p. 3.
Jawahar, I. M. and McLaughlin, Gary L. 2001. Toward a Descriptive Stakeholder Theory: An Organizational Life Cycle Approach. The Academy of Management Review, Vol. 26, Issue. 3, p. 397.
Van Buren, Harry J. 2001. If Fairness is the Problem, Is Consent the Solution? Integrating ISCT and Stakeholder Theory. Business Ethics Quarterly, Vol. 11, Issue. 3, p. 481.
Ryan, Lori Verstegen and Buchholtz, Ann K. 2001. Trust, Risk, and Shareholder Decision Making: An Investor Perspective on Corporate Governance. Business Ethics Quarterly, Vol. 11, Issue. 1, p. 177.
Hendry, John 2001. Missing the Target: Normative Stakeholder Theory and the Corporate Governance Debate. Business Ethics Quarterly, Vol. 11, Issue. 1, p. 159.
Freeman, R. Edward Edward and McVea, John 2001. A Stakeholder Approach to Strategic Management. SSRN Electronic Journal ,
Dunham, Laura Freeman, R. Edward Edward and Liedtka, Jeanne 2001. The Soft Underbelly of Stakeholder Theory: The Role of Community. SSRN Electronic Journal ,
Edward Freeman, R. and Phillips, Robert A. 2002. Stakeholder Theory: A Libertarian Defense. Business Ethics Quarterly, Vol. 12, Issue. 3, p. 331.
Radin, Tara J. 2002. Re-Imaging Business Ethics: Meaningful Solutions for a Global Economy. Vol. 4, Issue. , p. 31.
Tourigny, Louise Dougan, William L. Washbush, John and Clements, Christine 2003. Explaining executive integrity: governance, charisma, personality and agency. Management Decision, Vol. 41, Issue. 10, p. 1035.
Waxenberger, Bernhard and Spence, Laura J. 2003. Reinterpretation of a metaphor: from stakes to claims. Strategic Change, Vol. 12, Issue. 5, p. 239.
Licht, Amir N. 2003. The Maximands of Corporate Governance: A Theory of Values and Cognitive Style. SSRN Electronic Journal ,
Van Buren, Harry J. 2003. Boundaryless Careers and Employability Obligations. Business Ethics Quarterly, Vol. 13, Issue. 2, p. 131.
This Provision emphasises that a director is a fiduciary who must always act in the best interests of the company. It also sets out guidance on how directors can discharge their duties.
In law and in practice, there are different types of directors.
For listed companies, the Code distinguishes between directors who are executive or non-executive, and independent or not independent. In this context, there are three types of directors:
In addition, the statutes and case law identify the following types of directors:
The different types of directors have different roles and functions, though the law – including the Companies Act – imposes the same legal duties and obligations on them.
At common law, directors are fiduciaries who are required to act in the best interests of the company. That is, at all times, they must, in running the company as directors, act honestly and in good faith; avoid conflicts of interest, exercise due care, skill and diligence; and not abuse their power or misuse any information as well as adhere to the law and all rules and regulations.
The Provision notes that directors’ responsibilities include holding management accountable and setting the tone on ethics and culture.
The Board is primarily responsible for governance of the company – setting directions and steering the company. The day-to-day operations and actions and performance of the company is in the hands of management. Thus, the Board needs to be clear on management’s accountabilities to the Board.
Yet, it would be near-impossible for a Board to be detailed in its directions and policies so as to cover every conceivable situation and action that the company’s executives might take. It can, however, set the tone for a set of values and culture that guides the behaviour of management and employees. The Provision specifically states that the Board should put in place a Code of Conduct and Ethics in setting this tone from the top to influence the desire organisational culture.
Most Codes of Conduct and Ethics tend to have a statement on conflicts of interest. This is specifically mentioned in this Provision. As noted above, related to the duty to act in the best interests of the company is the director’s fundamental duty to avoid any conflict between his personal, professional or business interests with that of the company.
Given the sheer number of transactions and parties that a company is involved with, it is almost inevitable that conflicts of interest will arise in the course of business. The Provision recognises this and also the reality that conflict of interest is a sensitive subject. On this front, many directors have been taken to task for failing in their duties.
The Practice Guidance suggests that the Board should have clear policies and procedures for dealing with conflicts of interest. One clear procedure required by the Code is that where a director faces a conflict of interest, he should disclose this and recuse himself from meetings and decisions involving the issue.