Open AccessUpper Echelon Theory and Ethical Behaviour: an Illustration of the Theory and a Plea for its Extension Towards Ethical Behaviour
Author(s) -
A Zee,
D.M. Swagerman
Publication year - 2009
Publication title -
journal of business systems, governance and ethics
Language(s) - English
Resource type - Journals
ISSN - 1833-4318
DOI - 10.15209/jbsge.v4i2.158
Subject(s) - upper echelons , plea , normative , dual (grammatical number) , business , extension (predicate logic) , sample (material) , composition (language) , accounting , stock exchange , psychology , management , marketing , public relations , political science , economics , law , strategic management , computer science , finance , art , linguistics , chemistry , philosophy , literature , chromatography , programming language
This paper gives an illustration of the Upper Echelon Theory and presents arguments for more research on the relationship between upper echelons, strategic choices, and ethical behaviour. Its central theme is: What is the effect of the Sarbanes-Oxley Act implementation on the composition of the Board of Directors of companies that are listed on a U.S. stock exchange? In this research we examined whether the composition of companies’ top management teams is influenced by the issue of ethical behaviour. We used a sample of fifty listed companies, containing the members of the Board of Directors registered in the period 2000 - 2005.The underlying question in this research is whether companies actually change the composition of their Board of Directors because they believe that personal characteristics, such as age, tenure, and specialisation, play an important role in decision making and hence in the degree of their ethical behaviour. In this paper we test three hypotheses. The conclusion is that two of our hypotheses support the Upper Echelon Theory.