Corporate Governance and Ethics:
An Aristotelian Perspective
(Cheltenham, UK: Edward Elgar, 2008)
By Alejo José G. Sison
A commentary by William C. Frederick, December 2009©
As the book’s title indicates, author and University of Navarra professor Alejo Sison matches up the requirements of modern corporate governance with principles drawn from ancient Greek philosopher Aristotle, mainly from his Politics. So, we begin with a bit of a challenge: applying political ideas generated in a small Greek city-state some 2300 years ago by a philosopher (not a manager in the modern sense) who observed an economic world that was a far cry from the scale, complexity, technological dynamics, and global market competition of 21st century corporations. Occupying the Rafael Escola Chair of Professional Ethics in the School of Engineering and as Academic Director of the Institute for Enterprise and Humanism, Professor Sison brings impressive credentials to his task. An earlier 2003 book, The Moral Capital of Leaders: Why Virtue Matters, plumbed the possibilities found in Aristotle’s Nichomachean Ethics for the required qualities of leadership in today’s large business enterprises.
Sison’s chosen task is to fit modern corporate facts into ancient Stagiritian categories, and he does a notable job of it. He identifies six types of corporate governance systems generally compatible with Aristotelian notions of political organization: tyranny, monarchy, oligarchy, aristocracy, democracy, and polity. You might wish to nominate your own candidates for these kinds of enterprises, but this is Sison’s list:
• Italy’s Fiat: a corporate tyranny ruled by Gianni Agnelli
• Hong Kong’s Cheung Kong Holdings and Whampoa Ltd.: a corporate
monarchy ruled by Li Ka Shing
• The Philippines’ Abelardo Investment & Manufacturing Corporation: a corporate oligarchy governed by the Simon family clan
• Spain’s Banco Popular Espanol: a corporate aristocracy led by Luis and Javier Valls
• USA’s United Airlines: an employee-owned (ESOP) corporate democracy
• Spain’s IDOM Engineering Consultancy: a corporate polity managed by its founder Rafael Escola
Interesting narratives describe each company’s origin, history, and—the author’s main interest—how each one illustrates Aristotelian principles of organization, motivation, and virtuous (or not) behavior of the firms’ owners/members, executives/managers, and other employees. Another (Spanish) firm is featured in an opening chapter: Tasubinsa is an employment center catering to and employing mentally handicapped workers that Sison uses to make his point that “the firm is not a moneymaking machine” as assumed by free-market economic theory.
I leave it to confirmed and qualified Aristotelian scholars—of whom I am not one—to judge how well these companies manifest the essence of the Ancient One’s wisdom. Lacking such knowledge and insight, I should rather like to comment briefly on the general problem of relating ideas originating in one historical and cultural era to the conditions and characteristics found in a (much) later period, with a focus on the meaning and function of economic enterprise as currently understood. The outcome will be a series of questions that challenge the validity and relevance of such an Aristotelian interpretation of the modern business corporation. But first, a look at the book’s main analytic categories.