CORPORATE GOVERNANCE INTRODUCTION TO BUSINESS
Description: CORPORATE GOVERNANCE INTRODUCTION TO BUSINESS ETHICS MEANING OF BUSINESS ETHICS Business ethics is nothing but the application of ethics in business. Business ethics is the application of general ethical ideas to business behaviour. It
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slide1. CORPORATE GOVERNANCE INTRODUCTION TO BUSINESS ETHICS<br>
slide2. MEANING OF BUSINESS ETHICS Business ethics is nothing but the application of ethics in business. Business ethics is the application of general ethical ideas to business behaviour. It refers to the set of moral values or standards or norms which govern the activities of a businessman, Ethical busimess behaviour facilitates and promotes good to society, improves profitability, fosters business relations and employee productivity. Unethical practices are creating problems to businessman and business units, The life and growth of a business unit depends upon the ethics practised by a businessman. Business ethics is developed by the passage of time and custom. A custom differs from one business to another. Ifacustom is adopted and accepted by businessman and public, that custom will become an ethic. Business ethics is applicable to every type of business.<br>
slide3. ELEMENTS OF BUSINESS ETHICS (1) Top Management Commitment:
Ton management has a very important role to gus dhe enire organisation towards ethical behaviour. The CEO and other top le managers must be openly and strongly committed towards ethical conducts and gui people working at middle and low level to follow ethical behaviour.
(2) Publication of a "Code" :
Generally ethical organisations define ac set of ethics for all the emplovees in the organisation. These principles are defined in written document called code. These ethics cover various areas such as health and safe in the work place, fair dealing in selling and marketing activities, etc.<br>
slide4. (3) Establishment of Compliance Mechanism:
To make sure that actual decisions mati with a firm’s ethical standards, suitable mechanism should be es tablished e.g. corport ethics in training, recruitment, selection, etc. The employees of the organisation ma be free to report about the matters of unethical behaviour in the organisation.
(4) Involving Employees at All Levels:
While making ethical programmes and polio employees must be involved because these have to be practised by them only. Forming small groups of employees the ethical policies can be discussed by them and can examine their attitude towards these policies.<br>
slide5. (5) Measuring Results:
Although it is very difficult to measure the ethical results but it m be verified and andited that how far work is being carried on according to ethi standards. From time to time the top level must meet the employees to set the futu plan of action.<br>
slide6. CORPORATE ETHICS (1) Value System:
Business ethics is concerned with morality in corporate world. Core value statement that describes mission of the business. Any business can value statement, but an ethical business lives by it. An ethical organisation alignsn statements with its performance. It does not create a value statement uk the actions of the company
(2) Integrity:
Integrity is very important characteristics of an ethical organisatioin organisations treat their employees fairly.communicating with them honestlyn They demonstrate fair dealings with customers and vendors. They focus primaril interests and fulfilling the needs of their stakeholders and interact with them con<br>
slide7. (3) Codeconomicduct:
An ethical organisation also has an ethical code of conduet clear, well communicated, thoroughly understood, and enforced. In addition, in systems are deliberately and clearly tied to behaving in concert with the code ofer and accomplishment of non-economic goals in addition to economic outcomes per
(4) Safe Working Environment:
One of the main characteristic of an ethical organis nd the willingness to create a safe working environment for employees. This meanse all workplace bullying situations, and taking actions to create a space where b he cannot com<br>
slide8. (5) Respect
: Respect and ethical organisations go hand in hand. An ethical demonstrates respect for its employees by valuing opinions and treating each em as an equal. The business shows respect for its customers by listening to feedba needs. An ethical business respects its vendors, paying on time and ul assess fair buying practices.
(6) Interest of Society:
An ethical organisation has a social responsibility to proe interest of all the constituents of the society. It creates healthy and competitive environment. It specifies what should be done and what should be avoided lorof the society An ethical business respects its community by being environmentally responsible, showing concern and giving back as it sees fit.specifies<br>
slide9. (7) Leadership:
For an ethical organisation, its leaders must demonstrate ethical practices in any situation. Leaders, who can consciously choose the path that is ethically correct, as opposed to one that is purely financially driven, have successfully created an ethical culture in the business. Nanure and Scope of Busines Eahies as an excu erforming
(8) Communication:
Ethical organisations engage in constant communication about values on a regular basis with all employees. Training can come up short if it’s obvious that trainers and executives are only paying lip service to the values, or make snickering references to them. increaseS n involved that they
(9) Long-term perspective:
Ethical organisation views things in long-term perspective. Long-term perspective allows businesses to plan more effectively for future developments and help ensure longevity.<br>
slide10. (10) Not against Profit:
An ethical organisation does not mean being against fair profit making. However, it is against making profit by cheating and exploiting consumers, employees or investors. It supports expansion of business activities but by fair means and not through illegal activities or corrupt practices.
(11) Integrity:
Integrity is also an important feature of business ethics. Ethical organisations treat its employees fairly, communicating with them honestly and openly. They demonstrate fair dealings with customers and vendors including competitive pricing. Timely paymets and the highest quality standards in the manufacture of its products. Thus, business ethics promotes integrity among all stakeholders of the business. Y. There’s en the bus world. It h ess can cre2 aligns its v that does isation. Et company stly and ope hics and Corporate Governance<br>
slide11. ETHICAl PRINCIPLE IN BUSINESS (1) Sacredness of Means and Ends:
The means and techniques adopted to serve the business ends must be sacred and pure. It means that a good end cannot be attained with wrong means, even if it is beneficial to the society.
(2) Honesty and Trustworthiness:
Ethical executives are, above all, worthy of trust and honesty is the cornerstone of trust. When trust is at the core of a company, it’s easy to recognise. Ethical executives do not deliberately mislead or deceive others by misrepresentations, overstatements, partial truths, selective omissions, or any other means and when trust requires it they supply relevant information and correct misapprehensions of fact.<br>
slide12. (3) Integrity:
Integrity refers to wholeness, reliability and consistency. Ethical businesses back their promises, and they keep their commitments. Maintaining integrity often up requires moral courage, the inner strength to do the right thing even when it more than they want to pay. may cost
(4) Confidentiality:
Business executives should not use information for purposes other than those expected or approved by the discloser. Businesses have further responsibility to safeguard confidential information so that access is restricted to those who have a need to know. Employees should not use inside information to trade shares of the partner, and confidential information about the partner should not be disclosed to the publc<br>
slide13. (5) Protect Interests of All Stakeholders:
Businesses should give fair working conditions to their employees, give shareholders better rate of dividend, give consumers good quality goods and services at low prices, etc.
(6) Law Abiding:
Businesses and their executives should willingly comply with the law. They should avoid attempts to circumvent the intent of legal restrictions.
(7) Equality:
In modern business world, equality refers to the equal treatment of persons. This is a rejection of earlier “class” models of society. The basic idea of equality is that people matter because they are people, not because they serve a specific function.<br>
slide14. (8) Optimum Utilisation of Resources:
Management should ensure better and optimum utilisation ofboth natural as well as human resources. These resources should be used to remove poverty and to increase the standard of living of people.
(9) Rule of Publicity:
Management should maintain transparency in the publicity of business. The people should be adequately informed about the nature, purpose and consequences of business dealings. Usually misunderstandings, suspicion and false conjuncture arise out of secretiveness. Therefore, people must be properly acknowledged about what the business is going to do.<br>
slide15. (10) Auditing of Accounts:
Companies should take a hands-on approach to accounting and record keeping, not only as a means of gaining a better feel for the progress of companies, but as a resource for any questionable activities. They should maintain accurate business records, accounts and make them available to all authorised and authorities.
(11) Fairness:
Ethical businesses should strive to be fair and just in all dealings. They should manifest a commitment to justice and equal treatment of individuals.<br>
slide16. WHAT IS CODE ETHICS A code of ethics is a guide of principles designed to help professionals conduct business honestly and with integrity. A code of ethics document may outline the mission and values of the business or organization, how professionals are supposed to approach problems, the ethical principles based on the organization's core values, and the standards to which the professional is held.
A code of ethics, also referred to as an "ethical code," may encompass areas such as business ethics, a code of professional practice, and an employee code of conduct<br>
slide17. EXAMPLE OF CODE OF ETHICS • Act with integrity, competence, diligence, respect, and in an ethical manner with the public, clients, prospective clients, employers, employees, colleagues in the investment profession, and other participants in the global capital markets.
• Place the integrity of the investment profession and the interests of clients above their own personal interests.
• Use reasonable care and exercise independent professional judgment when conducting investment analysis, making investment recommendations, taking investment actions, and engaging in other professional activities.
• Practice and encourage others to practice professionally and ethically that will reflect credit on themselves and the profession.<br>
slide18. • Promote the integrity and viability of the global capital markets for the ultimate benefit of society.
• Maintain and improve their professional competence and strive to maintain and improve the competence of other investment professionals.
A code of ethics in business is a set of guiding principles intended to ensure a business and its employees act with honesty and integrity in all facets of its day- to-day operations and to only engage in acts that promote a benefit to society.<br>
slide19. TYPES OF CODE ETHICS A code of ethics can take a variety of forms, but the general goal is to ensure that a business and its employees are following state and federal laws, conducting themselves with an ideal that can be exemplary, and ensuring that the business being conducted is beneficial for all stakeholders. The following are three types of codes of ethics found in business.
Compliance-Based Code of Ethics
For all businesses, laws regulate issues such as hiring and safety standards. Compliance-based codes of ethics not only set guidelines for conduct but also determine penalties for violations. In some industries, including banking, specific laws govern business conduct. These industries formulate compliance- based codes of ethics to enforce laws and regulations.<br>
slide20. Employees usually undergo formal training to learn the rules of conduct. Because noncompliance can create legal issues for the company as a whole, individual workers within a firm may face penalties for failing to follow guidelines.
To ensure that the aims and principles of the code of ethics are followed, some companies appoint a compliance officer. This individual is tasked with keeping up to date on changes in regulation codes and monitoring employee conduct to encourage conformity. This type of code of ethics is based on clear-cut rules and well-defined consequences rather than individual monitoring of personal behavior. Despite strict adherence to the law, some compliance-based codes of conduct do not thus promote a climate of moral responsibility within the company.<br>
slide21. Value-Based Code of Ethics
A value-based code of ethics addresses a company’s core value system. It may outline standards of responsible conduct as they relate to the larger public good and the environment. Value-based ethical codes may require a greater degree of self- regulation than compliance-based codes. Some codes of conduct contain language that addresses both compliance and values. For example, a grocery store chain might create a code of conduct that espouses the company’s commitment to health and safety regulations above financial gain. That grocery chain might also include a statement about refusing to contract with suppliers that feed hormones to livestock or raise animals in inhumane living conditions.<br>
slide22. COMPONETHICSOF CORPORATE CODE ETHIC Including Ils SialtlmcIL Uf pur corporate code of ethics can be summarised as follows:
(1) Statement of Purpose:
Most corporate code of ethics generally includes an introdu with a statement of the purpose of the code. For some companies, the purpose ofa is to provide a general overview of the main values important to a company. O comp ethical codes provide specific guidance to employees about how to act on the behalf.
(2) Values:
Values are the set of established principles governing virtuous behaviour. Corporate houses develop and promote a set of suitable ethical values for staff withi company to keep in mind when doing business with the customers.<br>
slide23. . (3) Principles:
Principles are used to further support the business values by inclu operational credos employees should follow. Ethical principles are universal stand of right and wrong prescribing the kind of behaviour an ethical company or pe should and should not engage in. Customer satisfaction, business profitability continuous improvement are key factors in documenting business principles. •<br>
slide24. PURPOSE OF CODE OF ETHICS • Requires the highest standards for honest and ethical conduct, including proper procedures for dealing with conflicts of interest between personal and professional relationships.
• Requires full, fair, accurate, timely and understandable disclosure in reports and documents filed with regulators, including financial reports, and provided to shareholders. Requires compliance with applicable governmental laws, rules and regulations.
• Establishes accountability for adherence to the code.
• Provides for methods to communicate violations of the code.<br>
slide25. THANK YOU
Name – Ishika
Class- B.Com 3rd year
Rollno. - 3519<br>
slide2. MEANING OF BUSINESS ETHICS Business ethics is nothing but the application of ethics in business. Business ethics is the application of general ethical ideas to business behaviour. It refers to the set of moral values or standards or norms which govern the activities of a businessman, Ethical busimess behaviour facilitates and promotes good to society, improves profitability, fosters business relations and employee productivity. Unethical practices are creating problems to businessman and business units, The life and growth of a business unit depends upon the ethics practised by a businessman. Business ethics is developed by the passage of time and custom. A custom differs from one business to another. Ifacustom is adopted and accepted by businessman and public, that custom will become an ethic. Business ethics is applicable to every type of business.<br>
slide3. ELEMENTS OF BUSINESS ETHICS (1) Top Management Commitment:
Ton management has a very important role to gus dhe enire organisation towards ethical behaviour. The CEO and other top le managers must be openly and strongly committed towards ethical conducts and gui people working at middle and low level to follow ethical behaviour.
(2) Publication of a "Code" :
Generally ethical organisations define ac set of ethics for all the emplovees in the organisation. These principles are defined in written document called code. These ethics cover various areas such as health and safe in the work place, fair dealing in selling and marketing activities, etc.<br>
slide4. (3) Establishment of Compliance Mechanism:
To make sure that actual decisions mati with a firm’s ethical standards, suitable mechanism should be es tablished e.g. corport ethics in training, recruitment, selection, etc. The employees of the organisation ma be free to report about the matters of unethical behaviour in the organisation.
(4) Involving Employees at All Levels:
While making ethical programmes and polio employees must be involved because these have to be practised by them only. Forming small groups of employees the ethical policies can be discussed by them and can examine their attitude towards these policies.<br>
slide5. (5) Measuring Results:
Although it is very difficult to measure the ethical results but it m be verified and andited that how far work is being carried on according to ethi standards. From time to time the top level must meet the employees to set the futu plan of action.<br>
slide6. CORPORATE ETHICS (1) Value System:
Business ethics is concerned with morality in corporate world. Core value statement that describes mission of the business. Any business can value statement, but an ethical business lives by it. An ethical organisation alignsn statements with its performance. It does not create a value statement uk the actions of the company
(2) Integrity:
Integrity is very important characteristics of an ethical organisatioin organisations treat their employees fairly.communicating with them honestlyn They demonstrate fair dealings with customers and vendors. They focus primaril interests and fulfilling the needs of their stakeholders and interact with them con<br>
slide7. (3) Codeconomicduct:
An ethical organisation also has an ethical code of conduet clear, well communicated, thoroughly understood, and enforced. In addition, in systems are deliberately and clearly tied to behaving in concert with the code ofer and accomplishment of non-economic goals in addition to economic outcomes per
(4) Safe Working Environment:
One of the main characteristic of an ethical organis nd the willingness to create a safe working environment for employees. This meanse all workplace bullying situations, and taking actions to create a space where b he cannot com<br>
slide8. (5) Respect
: Respect and ethical organisations go hand in hand. An ethical demonstrates respect for its employees by valuing opinions and treating each em as an equal. The business shows respect for its customers by listening to feedba needs. An ethical business respects its vendors, paying on time and ul assess fair buying practices.
(6) Interest of Society:
An ethical organisation has a social responsibility to proe interest of all the constituents of the society. It creates healthy and competitive environment. It specifies what should be done and what should be avoided lorof the society An ethical business respects its community by being environmentally responsible, showing concern and giving back as it sees fit.specifies<br>
slide9. (7) Leadership:
For an ethical organisation, its leaders must demonstrate ethical practices in any situation. Leaders, who can consciously choose the path that is ethically correct, as opposed to one that is purely financially driven, have successfully created an ethical culture in the business. Nanure and Scope of Busines Eahies as an excu erforming
(8) Communication:
Ethical organisations engage in constant communication about values on a regular basis with all employees. Training can come up short if it’s obvious that trainers and executives are only paying lip service to the values, or make snickering references to them. increaseS n involved that they
(9) Long-term perspective:
Ethical organisation views things in long-term perspective. Long-term perspective allows businesses to plan more effectively for future developments and help ensure longevity.<br>
slide10. (10) Not against Profit:
An ethical organisation does not mean being against fair profit making. However, it is against making profit by cheating and exploiting consumers, employees or investors. It supports expansion of business activities but by fair means and not through illegal activities or corrupt practices.
(11) Integrity:
Integrity is also an important feature of business ethics. Ethical organisations treat its employees fairly, communicating with them honestly and openly. They demonstrate fair dealings with customers and vendors including competitive pricing. Timely paymets and the highest quality standards in the manufacture of its products. Thus, business ethics promotes integrity among all stakeholders of the business. Y. There’s en the bus world. It h ess can cre2 aligns its v that does isation. Et company stly and ope hics and Corporate Governance<br>
slide11. ETHICAl PRINCIPLE IN BUSINESS (1) Sacredness of Means and Ends:
The means and techniques adopted to serve the business ends must be sacred and pure. It means that a good end cannot be attained with wrong means, even if it is beneficial to the society.
(2) Honesty and Trustworthiness:
Ethical executives are, above all, worthy of trust and honesty is the cornerstone of trust. When trust is at the core of a company, it’s easy to recognise. Ethical executives do not deliberately mislead or deceive others by misrepresentations, overstatements, partial truths, selective omissions, or any other means and when trust requires it they supply relevant information and correct misapprehensions of fact.<br>
slide12. (3) Integrity:
Integrity refers to wholeness, reliability and consistency. Ethical businesses back their promises, and they keep their commitments. Maintaining integrity often up requires moral courage, the inner strength to do the right thing even when it more than they want to pay. may cost
(4) Confidentiality:
Business executives should not use information for purposes other than those expected or approved by the discloser. Businesses have further responsibility to safeguard confidential information so that access is restricted to those who have a need to know. Employees should not use inside information to trade shares of the partner, and confidential information about the partner should not be disclosed to the publc<br>
slide13. (5) Protect Interests of All Stakeholders:
Businesses should give fair working conditions to their employees, give shareholders better rate of dividend, give consumers good quality goods and services at low prices, etc.
(6) Law Abiding:
Businesses and their executives should willingly comply with the law. They should avoid attempts to circumvent the intent of legal restrictions.
(7) Equality:
In modern business world, equality refers to the equal treatment of persons. This is a rejection of earlier “class” models of society. The basic idea of equality is that people matter because they are people, not because they serve a specific function.<br>
slide14. (8) Optimum Utilisation of Resources:
Management should ensure better and optimum utilisation ofboth natural as well as human resources. These resources should be used to remove poverty and to increase the standard of living of people.
(9) Rule of Publicity:
Management should maintain transparency in the publicity of business. The people should be adequately informed about the nature, purpose and consequences of business dealings. Usually misunderstandings, suspicion and false conjuncture arise out of secretiveness. Therefore, people must be properly acknowledged about what the business is going to do.<br>
slide15. (10) Auditing of Accounts:
Companies should take a hands-on approach to accounting and record keeping, not only as a means of gaining a better feel for the progress of companies, but as a resource for any questionable activities. They should maintain accurate business records, accounts and make them available to all authorised and authorities.
(11) Fairness:
Ethical businesses should strive to be fair and just in all dealings. They should manifest a commitment to justice and equal treatment of individuals.<br>
slide16. WHAT IS CODE ETHICS A code of ethics is a guide of principles designed to help professionals conduct business honestly and with integrity. A code of ethics document may outline the mission and values of the business or organization, how professionals are supposed to approach problems, the ethical principles based on the organization's core values, and the standards to which the professional is held.
A code of ethics, also referred to as an "ethical code," may encompass areas such as business ethics, a code of professional practice, and an employee code of conduct<br>
slide17. EXAMPLE OF CODE OF ETHICS • Act with integrity, competence, diligence, respect, and in an ethical manner with the public, clients, prospective clients, employers, employees, colleagues in the investment profession, and other participants in the global capital markets.
• Place the integrity of the investment profession and the interests of clients above their own personal interests.
• Use reasonable care and exercise independent professional judgment when conducting investment analysis, making investment recommendations, taking investment actions, and engaging in other professional activities.
• Practice and encourage others to practice professionally and ethically that will reflect credit on themselves and the profession.<br>
slide18. • Promote the integrity and viability of the global capital markets for the ultimate benefit of society.
• Maintain and improve their professional competence and strive to maintain and improve the competence of other investment professionals.
A code of ethics in business is a set of guiding principles intended to ensure a business and its employees act with honesty and integrity in all facets of its day- to-day operations and to only engage in acts that promote a benefit to society.<br>
slide19. TYPES OF CODE ETHICS A code of ethics can take a variety of forms, but the general goal is to ensure that a business and its employees are following state and federal laws, conducting themselves with an ideal that can be exemplary, and ensuring that the business being conducted is beneficial for all stakeholders. The following are three types of codes of ethics found in business.
Compliance-Based Code of Ethics
For all businesses, laws regulate issues such as hiring and safety standards. Compliance-based codes of ethics not only set guidelines for conduct but also determine penalties for violations. In some industries, including banking, specific laws govern business conduct. These industries formulate compliance- based codes of ethics to enforce laws and regulations.<br>
slide20. Employees usually undergo formal training to learn the rules of conduct. Because noncompliance can create legal issues for the company as a whole, individual workers within a firm may face penalties for failing to follow guidelines.
To ensure that the aims and principles of the code of ethics are followed, some companies appoint a compliance officer. This individual is tasked with keeping up to date on changes in regulation codes and monitoring employee conduct to encourage conformity. This type of code of ethics is based on clear-cut rules and well-defined consequences rather than individual monitoring of personal behavior. Despite strict adherence to the law, some compliance-based codes of conduct do not thus promote a climate of moral responsibility within the company.<br>
slide21. Value-Based Code of Ethics
A value-based code of ethics addresses a company’s core value system. It may outline standards of responsible conduct as they relate to the larger public good and the environment. Value-based ethical codes may require a greater degree of self- regulation than compliance-based codes. Some codes of conduct contain language that addresses both compliance and values. For example, a grocery store chain might create a code of conduct that espouses the company’s commitment to health and safety regulations above financial gain. That grocery chain might also include a statement about refusing to contract with suppliers that feed hormones to livestock or raise animals in inhumane living conditions.<br>
slide22. COMPONETHICSOF CORPORATE CODE ETHIC Including Ils SialtlmcIL Uf pur corporate code of ethics can be summarised as follows:
(1) Statement of Purpose:
Most corporate code of ethics generally includes an introdu with a statement of the purpose of the code. For some companies, the purpose ofa is to provide a general overview of the main values important to a company. O comp ethical codes provide specific guidance to employees about how to act on the behalf.
(2) Values:
Values are the set of established principles governing virtuous behaviour. Corporate houses develop and promote a set of suitable ethical values for staff withi company to keep in mind when doing business with the customers.<br>
slide23. . (3) Principles:
Principles are used to further support the business values by inclu operational credos employees should follow. Ethical principles are universal stand of right and wrong prescribing the kind of behaviour an ethical company or pe should and should not engage in. Customer satisfaction, business profitability continuous improvement are key factors in documenting business principles. •<br>
slide24. PURPOSE OF CODE OF ETHICS • Requires the highest standards for honest and ethical conduct, including proper procedures for dealing with conflicts of interest between personal and professional relationships.
• Requires full, fair, accurate, timely and understandable disclosure in reports and documents filed with regulators, including financial reports, and provided to shareholders. Requires compliance with applicable governmental laws, rules and regulations.
• Establishes accountability for adherence to the code.
• Provides for methods to communicate violations of the code.<br>
slide25. THANK YOU
Name – Ishika
Class- B.Com 3rd year
Rollno. - 3519<br>