Business Ethics &

Corporate Govern
ance
BY-

SUNNY SHARMA

Business Ethics: Overview

With the growing strength of consumer movements and rising levels of

awareness among stakeholders, corporations are realizing
thatstakeholdersand consumers are no longer indifferent to unethical practices
like financial irregularities, tax-evasion, poor quality products and services, kickbacks, non-compliance with environmental issues, and hazardous working
conditions.

Companies have now begun to integrate ethics into their corporate cultures and
concentrate on putting appropriatecorporate governancemechanisms in place.

Business Ethics andCorporate Governancediscusses the theories of ethics

andcorporate governance, and explains how they can be applied in various
business situations. The book also provides somecontemporary case studiesto
enable the students and managers to gain a deeper appreciation of the role of
ethics andcorporate governancein building successful businesses.

IMPORTANCE OF ETHICS IN
BUSINESS

Stop business malpractices

Improves customers confidence

Survival of Business

Safe guarding customer rights

Protects interests of stakeholders

Good Public Image

Consumer satisfaction

Healthy Competition

Corporate Responsibility
-Stakeholders

Provide professional management, fair returns on their

investment, disclose relevant information, protect shareholders
assets etc. The organizations responsibility towards employees
are improving working conditions, maintaining open and honest
communications, welcoming suggestions/complaints, providing
equal opportunity etc. Management plays a key role in balancing
the multiple claims ofstakeholders.

Therefore the responsibility of management involves maintaining

healthy relationships among thestakeholders. The organizations
responsibilities towards consumers include offering quality goods,
providing prompt services, treating customers fairly etc. Good
relations with suppliers will determine the profitability of the
company.

Corporate governance: Overview

Corporate governance is all about "promoting corporate fairness,

transparency and accountability.

The system of rules, practices and processes by which a

company is directed and controlled. Corporate governance
essentially involves balancing the interests of the many
stakeholders in a company - these include its shareholders,
management, customers, suppliers, financiers, government and
the community. Since corporate governance also provides the
framework for attaining a company's objectives, it encompasses
practically every sphere of management, from action plans and
internal controls to performance measurement and corporate
disclosure.

Corporate Governance - Board

Structures and Styles

The composition and the size of the board play a crucial role in
the effective functioning of the board. Directors can be classified
into different types depending on their relationship with the
company on whose board they serve.

Depending on the mix of executive and non-executive directors

present on a board they can be classified into four types: All
executive board, majority executive board, majority outside
board and two-tier supervisory board.

Corporate Governance - Roles

and Responsibility of Board of
Directors
A corporation's growth to a great extent depends on the sense of

direction and purpose of the board.

Corporate Governance - Codes

and Laws

A code is a set of rules, which are accepted as general principles,

or a set of written rules, which state how people in a particular
organization or country should behave. But, a regulation is an
official rule that lays down how things should be done. Both
codes and regulations are "sets of rules" or "principles" or
"standards" that are intended to control, guide, or manage the
behavior or conduct of individuals working in organizations.

THANK YOU