Board ethical commitment and corporate performance: A qualitative perspective

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Abstract

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.

Keywords: Business Ethics, Code of Ethics, Corporate Governance, Fraud, Interview, Board of Directors, Malaysia

Authors’ individual contributions: Conceptualization — A.S.A.P.S. and Z.I.; Methodology — A.S.A.P.S., Z.I., and M.S.; Formal Analysis — A.S.A.P.S., Z.I., and M.S.; Investigation — A.S.A.P.S.; Data Curation — A.S.A.P.S.; Writing — Original Draft — A.S.A.P.S.; Writing — Review & Editing — Z.I. and M.S.; Visualization — A.S.A.P.S. and Z.I.; Supervision — Z.I. and M.S.; Project Administration — A.S.A.P.S.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: M48, M40, M14, M12, G3

Received: 05.07.2024
Accepted: 16.09.2024
Published online: 18.09.2024

How to cite this paper: Salin, A. S. A. P., Ismail, Z., & Smith, M. (2024). Board ethical commitment and corporate performance: A qualitative perspective. Corporate Board: Role, Duties and Composition, 20(3), 8–19. https://doi.org/10.22495/cbv20i3art1