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legal 
responsibilities
and their view of stakeholders as partners. 
The 
stakeholder view
is that many groups have a stake in what the organisation does. This is 
particularly important in the business context, where shareholders own the business but employees, 
customers and government also have particularly strong claims to having their interests considered. This 
is fundamentally an argument derived from 
natural law theory
and is based on the notion of individual 
and collective 
rights
. 
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PART B: BUSINESS ORGANISATION STRUCTURE, FUNCTIONS AND GOVERNANCE 
 
192
 
 
6
Ethics, law, governance and social responsibility 
6.1 A brief recap 
This chapter has developed the concept of corporate governance and business social responsibility. 
Since the management and owners of companies are not necessarily the same people, it is important for 
management to be encouraged to act in the best interests of the owners and other stakeholders. 
6.2 Interaction of ethics, law, governance and social responsibility 
By pulling together all we have already studied, we find: 

Ethics are values and principles that society 
expects 
companies and individuals to follow. 

Laws are rules that a company and individuals 
must
follow. 
Corporate governance requirements and social responsibility may be viewed as additional rules and 
guidance for companies and individuals. They bridge the gap between what the law requires and what 
society expects. This is because the law does not always encourage them to behave in an ethical or 
socially responsible manner. 
6.2.1 Levels of regulation 
One way of examining how the subjects are related is to look at how regulated they are.