● Corporate

This paper hopes to make more plausible the claim that ethical norms offer a powerful basis to solve corporate governance and corporate responsibility problems. This is necessary because ethical norms have not tended to be given a significant role by conventional approaches to these problems, whether at the theoretical or the public policy level. The emphasis, instead, has been on government intervention and market mechanisms of various kinds. The paper provides a brief account of the new theoretical work on ethical norms, which shows how they can give rise to moral sanctions that provide powerful incentives for agents to exercise self-restraint. Drawing on this work, the paper presents a preliminary account of how ethical norms may be able to play a powerful role in addressing corporate governance and corporate responsibility problems. The paper calls for the development of a more complete ‘norms theory ’ of corporate governance and corporate responsibility as the basis for more effective remedies to governance problems in the future. Dr Craig Mackenzie is Head of Investor Responsibility at Insight Investment, the asset management arm of HBOS plc. At Insight he is responsible for shareholder activism on corporate governance and corporate responsibility issues, on behalf of Insight’s £70 billion of assets under management. He is also deputy chair of the FTSE4Good policy committee, a member of advisory committees for Business in the Community and Just Pensions and a membe