Corporate Governance & Business Ethics

By Punam Gupta Roll No.-11MCO-054 P.G. 6TH Year Commerce

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Corporate Governance - Introduction

Corporate Governance is a process or set of

systems and processes to ensure that the company is managed to suit the interest of all concerned.

It is about promoting corporate fairness,

transparency and accountability. In other words, 'good corporate governance' is simply 'good business.

Some more definitions

Corporate

Governance is about promoting corporate fairness, transparency and accountability.

- John Wolfensen Fmr. President World Bank "Corporate social responsibility is a hard-edged business decision. Not because it is a nice thing to do or because people are forcing us to do it... because it is good for our business" - Niall Fitzgerald ,Former CEO, Unilever

Corporate Governance - Objectives

The core objectives of Corporate Governance philosophy are:

Equitable Treatment Disclosure and Transparency Accountability Stakeholder benefit

Corporate Governance Clause 49

Clause 49 is the 49th Clause in the Listing Agreement,

recommended by SEBI & which every listed company has to enter with the Stock Exchanges. Clause 49 mandates 4 major compliance areas. Board and Audit committee

Code of conduct & Disclosures

Certifications

Risk Management

What Is Business Ethics?

Ethics are moral guidelines which govern good behavior. So behaving ethically is doing what is morally right. Behaving ethically in business is widely regarded as good business practice.

Objectives of business ethics

Attention to business ethics has substantially improved society Ethics programmes cultivate strong team work and productivity Ethics programmes support employees growth and meaning Ethics programmes help avoid criminal acts of omission and can lower fines Formal attention to ethics is the right thing to do.
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Ethical Practices
Some ethical practices are as follows: Fair Dealing Compliance with laws, rules and regulations Protection and proper use of company resources Accounting and Reporting

Examples of Ethical Companies

Nike Standard Chartered Bank Adobe Systems General Electrics PepsiCo Google

Unethical Practices
Unethical practices defined as the practices which are against the public policy, welfare, or immoral or unlawful or illegal. Some of the unethical practices are as follows: Bribery Coercion Undue influence Insider trading Tax evasion Conflict of Interests Pollution Unfair dealing and discrimination Improper Accounting Practices

SATYAM SCAM

4th Largest IT Outsourcing company of India

The satyam computers ltd. that had its birth on 1987, had its biggest scam on 7th january,2009.
The real convict behind it was non other than B RAMALINGAM RAJU, Founder and former chairman of one of the biggest IT giant of our nation SATYAM COMPUTERS

SATYAM SCAM INCLUDEDAccounting fraud of over 7800 crores rupees

RECENT NEWS
13th April : TECH MAHINDRA acquired majority stake in Satyam 21st June : New brand MAHINDRA SATYAM launched

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CONCLUSION
Corporate Governance has become the latest buzzword today. Almost every country has institutionalized a set of Corporate Governance codes & spelt out best practices. There are several corporate governance structures available in the developed world but there is no One Size Fits All structure for Corporate Law. So in this dynamic environment the system of Corporate Governance also needs to evolve. Good corporate governance is vital because of its role in attracting investors toinvest both in the domestic and in the international capital markets.Investors primarily consider two variables before making investment decisions in the companies the rate of returnon invested capital and the risk associated with the investment. Good corporate governance practices reduce this risk by ensuring transparency, accountability, and enforceability in the capital marketplace.
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T H A N K Y O U

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