JARED D. HARRIS, University of Virginia - Darden Graduate School of Business Administration
Email: harrisj@darden.virginia.edu
R. EDWARD FREEMAN, University of Virginia - Darden Graduate School of Business Administration
Email: freemane@darden.virginia.edu

Distinguishing "business" concerns from "ethical" values is not only an unfruitful and meaningless task, it is also an impossible endeavor. Nevertheless, fruitless attempts to separate facts from values produce detrimental second-order effects, both for theory and practice, and should therefore be abandoned. We highlight examples of exemplary research that integrate economic and moral considerations, and point the way to a business ethics discipline that breaks new ground by putting ideas and narratives about business together with ideas and narratives about ethics.

DONALD J. SMYTHE, California Western School of Law
Email: DSmythe@cwsl.edu

In domestic sales contracts, a seller's promise is legally enforceable if it creates an express warranty. Although the criteria for determining whether a promise creates an express warranty include a bargain test, the application of the test by most courts still owes much to the tort principles on which warranty law was originally based. Thus, whether a promise becomes part of the basis of the bargain usually depends on whether the promisee relied on it. The logic, of course, is that a promise that was not relied upon could not have been truly bargained-for. The application of the bargain test has therefore significantly limited the enforceability of promises in sales transactions. Some courts, for instance, have held that a seller is not liable for promises made in advertisements the buyer did not see, read, or hear. Others have held that a seller is not liable for promises the buyer had reason to doubt based on her experience with the good. This essay argues that both economic efficiency and social ethics would be better served if courts generally held manufacturers and sellers to strict legal obligations for any promises they make in the marketing and sales of their goods.

SHANN TURNBULL, International Institute for Self-Governance
Email: STURNBULL@MBA1963.HBS.EDU

This reading identifies how the law, regulators and corporate governance codes have introduced and/or have facilitated unethical practices that jeopardize corporate performance of publicly traded firms. The reading argues that the need for corporate governance codes arises because lawmakers, regulators and stock exchanges have been irresponsible in allowing directors to obtain excessive and inappropriate governance powers that can corrupt both themselves and the business to harm stakeholders. Amendments in corporate constitutions for eliminating and/or mitigating unethical practices that would also further the interest of shareholders and other stakeholders are described that in many jurisdictions would not require changes in the law. The amendments would separate governance powers of directors from those required to manage the business. The division of power creates checks and balances similar to that found in the US constitution or in the lending covenants used by bankers or in the shareholder agreements of venture capitalist.