At the level of definitions, there is a close connection between ethics and management control. However, in theory and practice, this is not the case. The main question is: why is this so? This paper investigates the relationship between ethics and management control in corporations, focusing on the points of contact and the limitations that hinder a closer connection. The relationship is analyzed within the framework of agency theory and modern approaches to management control. The aim of the paper is to examine the possibilities for creating an effective trust-based management control system, which would align with the essence of proposed reforms of corporations and capitalism in general. The research results showed that the existing management control systems, both within themselves and in the context of the default values of capitalism, cannot be transformed into trust-based management control systems. Ethics is separated from management control by strong barriers, either due to the influence of agency theory and the concept of shareholder primacy, or due to the limitations of modern approaches in integrating all elements of reality. Designing a trust-based control system will be possible once controversial discussions on ethics and capitalism are reconciled at the level of the state and regulatory bodies. This is necessary for institutionalizing a new corporate purpose and revised understandings of ownership and responsibility.
Šljivić et al. (Wed,) studied this question.