What best describes the relationship between organizational ethics and corporate governance in improving ethical outcomes?

• A. Corporate governance sets values; organizational ethics enforces those rules.
• B. Organizational ethics refers to values, norms, and expected behavior within the company; corporate governance encompasses the systems, processes, and controls that guide direction and accountability.
• C. Organizational ethics is about profits; corporate governance focuses on reporting.
• D. Organizational ethics and corporate governance are the same concept.

Answer: (B)

Organizational ethics provides the values, norms, and expected behavior within the company—it's the moral compass that guides what people should do in daily decisions. Corporate governance, on the other hand, provides the framework of systems, processes, and controls—board oversight, policies, internal controls, risk management, and accountability mechanisms—that ensure those ethical expectations are translated into action and that there is proper guidance and consequences when they aren’t followed.

Together, they improve ethical outcomes because ethics sets the standard for what is right, while governance puts concrete mechanisms in place to monitor, enforce, and sustain that standard. Without governance, good values can drift or be ignored; without ethics, governance becomes empty rules lacking purpose. This description reflects organizational ethics as values and behavior within the company, and corporate governance as the guiding structures and controls that steer toward ethical conduct.