We analyze ethical policies of firms in industrialized countries and try to find out whether culture is a factor that plays
a significant role in explaining country differences. We look into the firm’s human rights policy, its governance of bribery
and corruption, and the comprehensiveness, implementation and communication of its codes of ethics. We use a dataset on ethical
policies of almost 2,700 firms in 24 countries. We find that there are significant differences among ethical policies of firms
headquartered in different countries. When we associate these ethical policies with Hofstede’s cultural indicators, we find
that individualism and uncertainty avoidance are positively associated with a firm’s ethical policies, whereas masculinity
and power distance are negatively related to these policies.
Keywords business ethics - codes of ethics - cultural values
JEL G300 - L210 - M140
Bert Scholtens received his Ph.D. at the Universtiy of Amsterdam. Since 1999 he has been working at the Department of Finance
of the University of Groningen, the Netherlands. His research particularly looks into the interaction between financial institutions
and corporate social responsibility. He has published in, among others, Ecological Economics, Journal of Banking and Finance,
Finance Letters, Journal of Investing, Sustainable Development, and Journal of Business Ethics. Lammertjan Dam is a Ph.D.
student at the Universtiy of Groningen. He expects to defend his thesis about the integration of corporate social responsibility
in economic valuation in Summer 2007.