How does ethics enter into corporate governance under agency theory? Primary emphasis is placed on compliance, i.e.,
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How does ethics enter into corporate governance under agency theory? Primary emphasis is placed on compliance, i.e., enforced conformity to rules that constitute minimum thresholds of acceptable behavior. Compliance approaches develop (1) rule based codes, (2) systems of monitoring to detect violations, and (3) punishments and rewards to deter non-compliance and reward compliance. Trevino and Weaver provide an empirical analysis to the goals achieved through compliance ethics: "[4] the perception that better decisions are made because of the ethics program [5] ethical advice seeking, [6] decreased unethical behavior in the organization...[7] ethical awareness." (Weaver and Trevino, 1999: 333.)
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