Corporate Governance and Business Ethics

Abstract

Corporate Governance is highly related with ethical conduct o f business. There is a strong need for corporate m anagem ents to adopt transparent process and good governance practices. Corporate governance is a system o f making directors accountable to the stakeholders fo r effective management of the companies, in the best interest of the company along with concern fo r ethics and values. It hinges on complete transparency, integrity and accountability o f management that includes executive and non-executive directors. Corporate Governance is an important concept to achieve corporate excellence. M anagements should pursue the path o f dynam ic success to achieve corporate excellence. Ethics are important fo r dynam ic success. Ethics o f success is entwined in corporate governance. If ethics of success is ignored, failu re inevitably results. A nd failu re increases costs considerably and erodes profitability. As success depends on corporate governance, managements must believe in and practice good governance principles. To experience the goodness o f corporate governance and to realize its imm ense benefits, corporate should have strong belief in the concept and its practice. A meaningful policy on Corporate G overnance must provide em pow erm ent to the executive managem ent o f the Company, and sim ultaneously create a m echanism o f checks and balances which ensures that the decision making powers vested in the executive management is not only not misused, but is used with care and responsibility to meet stakeholders' aspirations and societal expectations. The practice of Corporate Governance leads to the creation o f the right corporate culture. Business ethics (also known as corporate ethics) is a form o f applied ethics or professional ethics that examines ethical principles and moral or ethical problems that arise in a business environment. It applies to all aspects o f business conduct and is relevant to the conduct o f individuals and business organizations as a whole. Applied ethics is afield of ethics that deals with ethical questions in many fields such as medical, technical, legal and business ethics. Ethics in Corporate governance means the param eters which a company sets for itself fo r its functioning. Transparency and disclosures about accounts as well as other important issues have to be com m unicated to the stakeholders in a truthful and prom pt manner. These build up confidence and trust in the marketplace. When issues like Enron, WorldCom, UTI, Ketan Parekh, Harshad Mehta, Satyam etc.hit the headlines, it is difficult to ignore business ethics. As consumers are getting increasingly aware of ethical issues, corporations have to respond to their concerns whether it is related to issues of environment, heath or any other concern. In this paper, we will look into the concept of Corporate Governance, its framework, structure and philosophy. We will also take a look at the need for ethics in business, its benefits and suggestions