Instilling Ethics in Corporate Control

The purpose of this article is to develop a conceptual model for integrating ethics into corporate entity control. This is because modern corporate entities which separate its owners and management has raised a challenge to its stewardships. The management parties have been entrusted with resources and responsibilities to operate the organisation in the interest of the principal as the proprietor. This article reevaluates the current corporate control concept in light of the macro environment which neglect the moral sentiment theory. The omission of moral sentiment theory has eventually led to the tendency of disregarding moral in human economic behaviours. The agency theor, on the other hand, assumes human (management group) as opportunist agents that need to be controlled through specific control mechanism which involve costs known as the agency cost. However, the control mechanism that rest on the domain of agency theory is still incapable of entirely protecting the proprietor s investment as had been proven by the domestic and international corporate scandals. However, the core problem that arises from the omission of moral sentiment theory transcends the rule-compliance scope. As a result, the noncompliance mechanism based on human internal capacity is believed to better complement the corporate control system concept.