Taiwan’s Corporate Governance: Explorations from the Ethical Corporate Governance Model

Literature Review

C. Stone (1993) pointed out why law cannot replace ethics through three aspects. The first aspect is that the legislation of a new law often only takes place after a certain issue has emerged quite a while ago and thus lags behind. The second aspect is with the legislative process, in which legislatures may have different or insufficient legislative knowledge, and passed bills are often compromised. Lastly, the procedures of reaching a verdict and enforcing the law are all expensive expenditures, and even law enforcers themselves may get slothful on their job (Stone, 1993, 162-166). J. Bentham (1987) conducted an in-depth discussion on what kinds of behavior should be intervened by the law and which behaviors should stay in the domain of morality and ethics. Bentham believes when the cost of law enforcement outweighs the benefits to the society, intervention should be done through the domain of morality and ethics instead of the law; the same goes for offenses that cannot be clearly defined (Bentham, 1987, 62-63).

Hsu (2004) further pointed out that though the law upholds the bottom-line of morality, it is also based on the moral foundation; therefore, he defines the relationship between the law and morality as “interdependence” and “pushing and pulling (Hsu, 2004).” From the above discussions we can see that the law and the domain of morality and ethics are complementary and interdependent. Therefore, a topic that interest many scholars is to contemplate on the issue of corporate governance from the perspective of business ethics that is not a part of the corporate governance law (please see Table 1 for details).

Source: Compiled by the Researcher of this Study