BY HARDEEP SHARMA
Corporate governance is the set of policies, people, laws, regulations and reporting of corporate business entities. It is a primary focus of regulators in today’s world. Sound corporate governance brings prosperity to the masses in the economy by raising investor confidence and proper management of the investments. Good corporate governance is vital for organizations to survive.
Corporate Governance is defined as the general set of customs, regulations, policies and laws that determine to achieve certain targets for which a firm should be run. It is clear that corporate governance exists at a complex intersection of law, morality and economic efficiency, considering that issues of executive compensation, financial scandals and shareholder activism are all tied up with it. All parties to corporate governance have an interest, whether direct or indirect, in the effective performance of the organization. Directors, workers and management receive salaries, benefits and reputation, while shareholders receive capital return, customers receive goods and services and suppliers receive compensation for their goods or services.
Ethics refers to a system of moral principles a sense of right and wrong, and goodness and badness of actions and the motives and consequences of these actions. Ethics is seen as an individual’s own personal attitude and a believe concerning what is right or wrong, good or bad. It is important to note that ethics reside within individuals and that organization doesn’t have ethics. People have ethics
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No discrimination should be done on the basis of caste ,color , and religion, The polices should be fair and transparent Proper provision of safety should be provided by the company to the employees. There should be proper honesty, loyalty, and integrity in the employees. The company’s resources should not be utilized by the employees for their personal usage. Company should provide better environment condition Information about employee’s personal lives, health, and work evaluations should be kept confidential. Regular measurement of employee satisfaction should by company. To neither give nor take any illegal payment, remuneration, gift, donation, or comparable, benefits to obtain business or favors. To comply with all regulations regarding preservation of the environment. Employee should report to management any actual or possible violation of code or an event that could affect the business or reputation of the employee’s company.
Corporate governance exists at a complex intersection of law, morality and economic efficiency, considering that issues of executive compensation, financial scandals and shareholder activism are all tied up with it. Corporate governance also includes the relationships among the many stakeholders involved and the goals for which the corporation is governed.
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The Board of Directors The Upper Management The Stock holders The Regulators and other Stakeholder institutions Reporting Company Policy Company Activity The CEO, Company Secretary, and CFO Meetings
It focus on what our relationships are and ought to be with our employees, our customers, our stock holders, our creditors, our suppliers, our distributors, our neighbors and other members of the community / society in which we operate. Questions, like moral responsibilities, obligations and virtues in business decision making also form part of ethics e.g. choices and character of persons, the policies and cultures of organization.
Ethics is concerned with the code of values and principles that enables a person to choose between right and wrong, and therefore, select from alternative courses of action. Further, ethical dilemmas arise from conflicting interests of the parties involved.
a) The liberalization and de-regulation world over gave greater freedom in management. This would imply greater responsibilities. b) The players in the field are many. Competition brings in its wake weakness in standards of reporting and accountability. c) Market conditions are increasingly becoming complex in the light of global developments like WTO, removal of barriers/reduction in duties. d) The failure of corporate due to lack of transparency and disclosures and instances of falsification of accounts/embezzlement and the effect of such undesirable practices in other companies.
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Rights and equitable treatment of shareholders Interests of other stakeholders Role and responsibilities of the board Integrity and ethical behavior Disclosure and transparency
“There are those who will tell you that business and ethics cannot stand together. In the short run it might appear that companies pay a price for adhering to values while their competitors get ahead in a shorter time frame, but in the long run people would learn to distinguish, stakeholders learn to ask the right questions, and distinguish between the grain and chaff. Those that don't subscribe to values will fall by the way side; those that subscribe to values will last the course and will set benchmarks.” M. Damodaran Chairman, Securities and Exchange Board of India
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Several corporate governance structures Extends beyond corporate law The committee has primarily focused on investors and shareholders. Committee believes that its recommendations will go a long way in raising the standards of corporate governance
Committee primarily related to audit committees, audit reports, independent directors, related parties, risk management, directorships and director compensation, codes of conduct and financial disclosures.
Brand image for the company Greater loyalty Greater commitment to the employees The employees will become more creative
Every individual has to start culturing the human values in the inner world of himself because they say, “Those who can see the deepest into the past can also see farthest into the future”
