Business, ethics, and profit: Are they compatible under corporate governance in our global economy? ☆ Dipasri Ghosh a, ⁎, Dilip K. Ghosh b , Angie Abdel Zaher c a California State University, Fullerton, United States b The Institute of Policy Analysis, United States c The American University in Cairo, Egypt article info abstract Article history: Received 21 November 2010 Received in revised form 22 November 2010 Accepted 27 April 2011 Available online 24 May 2011 It has been the traditional belief that profits and ethics are at odds with each other in the world of business. Corporate governance appears to be a hindrance or a drag on profit maximization. This work shows that moral codes, public interest and social values pose no threat to profit maximization of any firm. It is demonstrated with the illustration of transfer pricing and public goods-based economy that profits and ethics are quite compatible within the strait jacket of societal norms and corporate goals. © 2011 Elsevier Inc. All rights reserved. JEL classification: A14 C61 D04 D21 D61 D71 Keywords: Ethics Corporate governance Profit Maximization Transfer pricing Utility maximization Social optimum Global Finance Journal 22 (2011) 72–79 ☆ The authors wish to express their thanks to late Paul Samuelson, late John Hicks, Francis Burke, David Suk, Arun Prakash, Augustine Arize, Atreya Chakraborty, Robin Mullock, and many participants in the conference floor in Reading, England for various suggestions and constructive comments. ⁎ Corresponding author. E-mail address: dghosh@fullerton.edu (D. Ghosh). 1. Introduction Business is an interaction between producers and consumers. A firm, for instance — IBM, is a producing- cum-selling agent of goods and services, and consumers are the buyers of those products. In this interplay 1044-0283/$ – see front matter © 2011 Elsevier Inc. All rights reserved. doi:10.1016/j.gfj.2011.05.006 Contents lists available at ScienceDirect Global Finance Journal journal homepage: www.elsevier.com/locate/gfj