College of Business Administration

Seminar in Corporate Governance

Discussion Questions for February 14, 2001

1) The contract between business and society is explicit in some circumstances. For instance, limits on pollution, anti-competitive behavior and required disclosures are all contracted in common law. However, the moral, social and economic implications of Board decisions, which are not prescribed, arguably have just as significant an impact on society's constituencies as those written in the legal code.
Thus, a) what is your position on the role of business in society? b) Should business be accountable to its constituencies for acts outside the law?

2) When do the interests of corporate survival outweigh that of the environment? If a company releases small amounts of non-toxic pollutants that cause minor inconvenience to the local ecology, should they be shut down if:

a. They are unable to pass those costs on to consumers and are a minor employer? b. They are unable to pass those costs on to consumers and employ 50% of the local community?

3) When faced with a decision should a corporate Board consider only those claimants who the law seems to hold Boards accountable to, namely shareholders, or should a Board consider the impacts of its decisions on other claimants? Why? How would Kenneth Arrow answer this question?

4) Is it possible for a company to be morally and socially responsible in a competitive environment where the competition is overseas and has significantly lower production costs?

5) Given the capitalist system we live in, how, and to what extent, is it feasible for a corporation to behave in a manner that will allow it to survive in a capitalist system without constructing a socialist system?

6) What do you believe a public figure could bring to a Board room? Are there specific skill sets or experiences that government officials possess that would be an asset to the traditional corporate Board?

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