This conceptual article introduces behavioral perspectives into the governance arena and undertakes a psychological assessment of managerial decision making in organizations by elaborating on the treatment of trust and pride in the extant literature. While trust is conceived by governance scholars as a device for monitoring relationships with others, we argue that authentic pride, contrary to hubris, could operate as an attribute of emotional self-regulation allowing corporate leaders to govern the social behavior of their own self. Contrasting the features of (...) trust and authentic pride, we advance several propositions to capture their relevance and simultaneous importance as viable governance mechanisms in light of a manager's level of cognitive moral reasoning. Our study builds a unified theoretical framework of governance which integrates human agency, psychological states, and moral judgment to foster a deeper understanding of complex self-regulatory processes that are activated by decision makers in the execution of their roles. (shrink)

Due to the prevalent influence of legal trends in driving ethical homogenization and persistent decoupling between ethical substance and symbolism in today’s organizations, scholars are calling for a renewed interest in the structural makeup of ethical codes. This article explores the disclosure trends and examines the contents of codes of ethics in the context of Canadian publicly listed acquirers. Relying on the analysis of codes’ public availability, structure, purpose, and promoted values, four clusters of behavior are identified. Although many firms (...) avoid the public disclosure of their codes, the results indicate that code of ethics’ patterns in sample firms are not driven merely by regulatory forces but increasingly shaped by aspirations for building a sustainable values-based corporation. The reported differences across clusters demonstrate that many companies in Canada overcome isomorphic pressures by displaying some originality in the writing of their codes. While symbolism in codes of ethics’ design and adoption prevails in publicly listed acquiring firms, the study provides evidence of an emerging trend of substantial commitment to social responsibilities. (shrink)

Business Ethics: A European Review, EarlyView.

Previous research has investigated the links between Mergers and Acquisitions (M&As) and the monetary magnitude of executive compensation, but failed to inquire how the adoption of specific attributes of compensation contacts relates to M&A activities. We address this gap in the literature by examining the impacts of some M&A characteristics and acquirers' features on the adoption of executive compensation protection provisions and new Long-Term Incentive Plans (LTIPs). The study adopts a longitudinal design before after M&A deals for 80 Canadian acquiring (...) companies that engaged in M&A activities between 1995 and 2001. Our findings suggest that both transactional and organisational characteristics significantly explain the executive compensation arrangements' adoption around M&A transactions, but that the adoption of new LTIPs is subjected to a different set of determinants than the adoption of compensation protection provisions. We interpret these results in the light of the agency, political and institutional perspectives. (shrink)

The main purpose of this article is to elucidate the bright connotation of the self-conscious emotion of pride, namely authentic pride, in the broader context of behavioral governance literature. Scholars in the field of psychology suggest that authentic and hubristic pride represent two facets of the same emotional construct. Yet, our review indicates that in the extant governance research pride has been treated as an exclusively dark leadership trait or self-attribution bias, thereby placing hubris among the main causes of managerial (...) failure. After conceptually differentiating the two aspects of pride, we identify and discuss the myriad of positive governance implications stemming from firm members' tendency toward authentic pride. We argue that the examination of both positive and negative facets of pride constitutes a critical complement to the existing governance landscape largely dominated by economic theories and formal mechanisms of control. This article allows practitioners to better understand the emotional processes involved in governance that are needed to predict the workplace effectiveness of employees, identify individuals prone to experience authentic pride in the early stages of the recruitment process, and design specific interventions for acting upon and putting emotional energy into productive use. (shrink)