Directors’ Fiduciary Duties to Perform in the Best Interest of the Companies: An Inter-Related Relationship Between Ethics and Governance

Suraiya Ishak, Ahmad Raflis Che Omar, Azhar Ahmad


This study inspires from Smith Moral Sentiment Theory which recognizes moral as the essential motive for every human action. The purpose of this study is to prove the relationship between ethical principle and corporate governance. This study employs case-study approach comprising three Malaysian cases. Each case will be analyzed parallel to the governance principle of promoting the best interest for the company. Board of directors (BOD) is emphasized throughout this study due to the important role of BOD in the structure of corporate governance. This study suggests that in order to execute corporate governance effectively, it must be based on ethical principles. As a result, ethical principles are included in the corporate governance rules as reflected by the terms of “proper purpose”, “in good faith in the best interest of the company”, “reasonable care” and “diligence”. These terms contain subjective and relative meaning. For this study, corporate governance rule cannot be separated from the confinement pillars of ethical principles. Thus, the study reiterates Smith argument that moral sentiment should underly human economic activities, including the jurisdiction of corporate management.

Key words: Ethics; Corporate governance; Agency theory; Moral sentiment; Board of directors


Ethics; Corporate governance; Agency theory; Moral sentiment; Board of directors

Full Text:




  • There are currently no refbacks.

Share us to:   


  • How to do online submission to another Journal?
  • If you have already registered in Journal A, then how can you submit another article to Journal B? It takes two steps to make it happen:

1. Register yourself in Journal B as an Author

  • Find the journal you want to submit to in CATEGORIES, click on “VIEW JOURNAL”, “Online Submissions”, “GO TO LOGIN” and “Edit My Profile”. Check “Author” on the “Edit Profile” page, then “Save”.

2. Submission

  • Go to “User Home”, and click on “Author” under the name of Journal B. You may start a New Submission by clicking on “CLICK HERE”.

We only use three mailboxes as follows to deal with issues about paper acceptance, payment and submission of electronic versions of our journals to databases:;;

 Articles published in International Business and Management are licensed under Creative Commons Attribution 4.0 (CC-BY).


Address: 9375 Rue de Roissy Brossard, Québec, J4X 3A1, Canada 
Telephone: 1-514-558 6138 
Website: Http:// Http://

Copyright © 2010 Canadian Research & Development Centre of Sciences and Cultures