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CORPORATE GOVERNANCE AND
ETHICS
DEFINITION
CG is defined as holding the balance
between economic and social goals & also between
individual and communal g...
EFFECT OF CG
1.

2.
3.
4.
5.

Right of shareholder
Equitable treatment of shareholder
Role of stakeholder in CG
Disclosure...
PRINCIPLES OF CORPORATE GOVERNANCE
1.

2.

3.
4.

5.
6.

Ensuring the Basis for an effective Corporate
Governance Framewor...
BENEFITS OF GOOD CG
1.
2.
3.
4.
5.

6.
7.

Congruence of interest of boards, management
Stability and growth to company
Co...
It deals with problems that results from the
separation of ownership & control
Shareholders

Boards
Management

Employees
INDIAN MODEL OF GOVERNANCE
External environment
 Internal environment

ROLE OF BOARD OF DIRECTORS
Definition of Director
A Director may be defined as a person
having control over the direction,...
STRUCTURE OF BOARD OF DIRECTOR IN
INDIA
BOD
Executive Director

Non-Executive Director

Independent Director

Nominee Dire...
ROLE
1.
2.
3.
4.
5.
6.

Commitment
Clear their stand
Efficient CEO
Anticipate business events
Meet demand of market place
...
CONTD…….
7.
8.
9.

Steer discussions
Long term focus and shareholder interests
Promoting overall interests of the company
ROLE OF SHAREHOLDERS
1.
2.
3.
4.
5.

Financing
Operations
Governance
Control
Considerations
RIGHTS OF SHAREHOLDERS
1.
2.
3.
4.
5.

6.

Voting power
Right to increased share values
Right to transfer ownership
Divide...
RESPONSIBILITIES OF SHAREHOLDERS
1.
2.
3.
4.

To remain informed
To be vigilant
To participate and vote in general meeting...
ROLE OF STAKEHOLDERS
ISSUES/PROBLEMS IN CG
1.

2.
3.
4.
5.

6.
7.
8.

9.

Distinguishing the roles of Board and
Management
Composition of the b...
SECURITY EXCHANGE BOARD OF INDIA (SEBI)
History of SEBI
Members
1.

Chairman

2.

2 members for finance and administration...
OBJECTIVES OF SEBI
1.

Protection

2.

Promotion

3.

Regulation

4.

Incidental

Functions

Powers
SEBI’s Role in promoti...
ETHICS
Business ethics is the art & discipline of applying
ethical principles to examine & solve complex moral
dilemmas.

...
CORPORATE SOCIAL RESPONSIBILITY
To create positive impact with business.

Practical Steps to CSR
Scope of Social Responsib...
CHAMBER OF COMMERCE REFERS 9 STEPS
TO CSR
1.

Confirm CEO

2.

State company purpose

3.

Identify key stakeholders

4.

D...
ETHICS
Ethics are some standardized form of conduct or
behavior of individuals understand & accept in a particular
field o...
BUSINESS ETHICS
Moral principles that define right or wrong
behavior in the world of business.

7 Principles
1.
2.
3.
4.
5...
ETHICAL DILEMMAS
1.

Truth Vs Loyalty

2.

Individual Vs Community

3.

Short term Vs Long term

4.

Justice Vs Mercy

Val...
OBJECTIVES OF ETHICS
1.

Study human behavior

2.

Establishes moral standards of behavior

3.

Judgments

4.

Moral behav...
MODEL OF ETHICS IN MANAGEMENT

Consumers shareholders

Marketplace

Unions

Work place
Quality of
management

Environment
...
DIFFERENT TYPES OF ETHICS
1.

Transactional Ethics



Principle of honesty



Principle of reciprocity

2.

Participator...
INDIAN ETHOS
Principles
1.

Potential and talent

2.

Work as worship

3.

TQM

4.

Achieve highest human welfare

5.

Cha...
WORK ETHICS
4 P’s
1. Pay
2. Prospects
3. Promotion
4. Performance

Improving Work Ethics
1.
2.




3.
4.
5.
6.
7.

Man...
GOOD WORK CULTURE
Values which get manifested in behavior of
employees at work place as hard work, loyalty to
organization...
FACTORS HINDERING WORK CULTURE

1.

Lack of sense of discipline & min work ethos

2.

Lack of hard work & commitment

3.

...
FEATURES OF INDIAN ETHOS AND INSIGHTS


Balance, harmony



You are good, world is good



Rights and privileges of ind...
VALUES
Relevance of values in management
Values shape

Beliefs

Perceptions

Attitude
Behavior

Features
1.

Force affecti...
TYPES OF VALUES
1.

Instrumental

2.

Terminal

3.

Personal

Formulating values
Family influence
Peer influences

Situati...
ETHICS IN GLOBAL BUSINESS

Differences
Between
each human
on earth

Foundation
in variance
in their personal

if people
be...
HOLISTIC APPROACH FOR DECISION
MAKING
Steps in decision making
1.

Identify the problem

2.

Generate alternative solution...
ETHICAL DECISION MAKING CRITERIA
1.

Utilitarian Criteria

2.

Focus on rights

3.

Focus on justice
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Corporate Governance & Ethics; CSR, values

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Overall concepts of CGE, CSR, Values, holistic approach

Corporate Governance & Ethics; CSR, values

  1. 1. CORPORATE GOVERNANCE AND ETHICS
  2. 2. DEFINITION CG is defined as holding the balance between economic and social goals & also between individual and communal goals By Sir Adrian Cadbury Corporate Governance is stated as course of conduct that is managed by various ethical approach.
  3. 3. EFFECT OF CG 1. 2. 3. 4. 5. Right of shareholder Equitable treatment of shareholder Role of stakeholder in CG Disclosure and transparency Responsibilities of the board
  4. 4. PRINCIPLES OF CORPORATE GOVERNANCE 1. 2. 3. 4. 5. 6. Ensuring the Basis for an effective Corporate Governance Framework The Rights of Shareholders and Key Ownership Functions The Equitable Treatment of Shareholders The Role of Stakeholders in Corporate Governance Disclosure and Transparency The Responsibilities of the Board
  5. 5. BENEFITS OF GOOD CG 1. 2. 3. 4. 5. 6. 7. Congruence of interest of boards, management Stability and growth to company Confidence in investors Reduce risk and cost of capital Motivate employees to acquire and develop skills Competitive advantage in financial market Relationship with enterprise
  6. 6. It deals with problems that results from the separation of ownership & control Shareholders Boards Management Employees
  7. 7. INDIAN MODEL OF GOVERNANCE External environment  Internal environment 
  8. 8. ROLE OF BOARD OF DIRECTORS Definition of Director A Director may be defined as a person having control over the direction, conduct, management or superintendence of the affairs of a company Definition of BOD The Board of Directors of a company includes all directors elected by shareholders to represent that their interest is vested with the power of management
  9. 9. STRUCTURE OF BOARD OF DIRECTOR IN INDIA BOD Executive Director Non-Executive Director Independent Director Nominee Director
  10. 10. ROLE 1. 2. 3. 4. 5. 6. Commitment Clear their stand Efficient CEO Anticipate business events Meet demand of market place Earn profit for shareholder, ethical and social obligation to society through Transparency ii. Pay for performance iii. Process for determination iv. Severance payments v. Pension for non-executive Directors i.
  11. 11. CONTD……. 7. 8. 9. Steer discussions Long term focus and shareholder interests Promoting overall interests of the company
  12. 12. ROLE OF SHAREHOLDERS 1. 2. 3. 4. 5. Financing Operations Governance Control Considerations
  13. 13. RIGHTS OF SHAREHOLDERS 1. 2. 3. 4. 5. 6. Voting power Right to increased share values Right to transfer ownership Dividend Entitlement Right to inspect corporate books & records Suing for wrongful Acts
  14. 14. RESPONSIBILITIES OF SHAREHOLDERS 1. 2. 3. 4. To remain informed To be vigilant To participate and vote in general meetings To exercise one’s right on one’s own or as a group
  15. 15. ROLE OF STAKEHOLDERS
  16. 16. ISSUES/PROBLEMS IN CG 1. 2. 3. 4. 5. 6. 7. 8. 9. Distinguishing the roles of Board and Management Composition of the board Separation of the roles of CEO and chairperson Board have committees Appointments to the board and director’s reelection Director’s and executives remuneration Disclosure and audit Protection of shareholder’s rights and expectations Dialogue with institutional shareholders
  17. 17. SECURITY EXCHANGE BOARD OF INDIA (SEBI) History of SEBI Members 1. Chairman 2. 2 members for finance and administration 3. 1 member from Reserve Bank 4. 5 members appointed by Central Govt. Collective Investment Scheme Finance, Accounts & Audit of SEBI
  18. 18. OBJECTIVES OF SEBI 1. Protection 2. Promotion 3. Regulation 4. Incidental Functions Powers SEBI’s Role in promoting CG 1. Disclosure Standards 2. Efficient and Effective market system 3. Reliable & Effective Enforcement 4. Highest Standard of Governance
  19. 19. ETHICS Business ethics is the art & discipline of applying ethical principles to examine & solve complex moral dilemmas. Why should business act ethically? Unethical Issues Benefits due to ethics
  20. 20. CORPORATE SOCIAL RESPONSIBILITY To create positive impact with business. Practical Steps to CSR Scope of Social Responsibility 1. 2. 3. 4. 5. 6. 7. 8. Protecting & promoting shareholder’s interest Social concern & promotion of common welfare programmes Art of philanthropy Good CG itself is SR Corporate in the vanguard of rendering social service Sponsoring social & charitable causes Corporations should supplement state efforts Ensuring ecological balance
  21. 21. CHAMBER OF COMMERCE REFERS 9 STEPS TO CSR 1. Confirm CEO 2. State company purpose 3. Identify key stakeholders 4. Define business principles and policies 5. Establish implementation, procedures and management system 6. Benchmark 7. Setup internal monitoring 8. Language that everyone can understand 9. Set objectives Social through process
  22. 22. ETHICS Ethics are some standardized form of conduct or behavior of individuals understand & accept in a particular field of activity. Performance levels of ethics 1. Societal level 2. Stakeholder level 3. Internal policy level 4. Personal policy level
  23. 23. BUSINESS ETHICS Moral principles that define right or wrong behavior in the world of business. 7 Principles 1. 2. 3. 4. 5. 6. 7. Be trustful Keep an open mind Meet obligations Have clear documents Become community involved Maintain accounting control Be respectful 3C 1. 2. 3. Compliance Contribution Consequence
  24. 24. ETHICAL DILEMMAS 1. Truth Vs Loyalty 2. Individual Vs Community 3. Short term Vs Long term 4. Justice Vs Mercy Values for Managers 1. Establish boundaries 2. Establish presence of fairness 3. Establish trust 4. Establish honesty 5. Establish the expectation & commitment
  25. 25. OBJECTIVES OF ETHICS 1. Study human behavior 2. Establishes moral standards of behavior 3. Judgments 4. Moral behavior 5. Human conduct in general Deals with Concept of Human conduct Ethics Nature of Ethics Science of Ethics Study of Ethics
  26. 26. MODEL OF ETHICS IN MANAGEMENT Consumers shareholders Marketplace Unions Work place Quality of management Environment NGO/Govt Community Local community Impact on society
  27. 27. DIFFERENT TYPES OF ETHICS 1. Transactional Ethics  Principle of honesty  Principle of reciprocity 2. Participatory Ethics 3. Recognition Ethics Need for Business Ethics Society Business
  28. 28. INDIAN ETHOS Principles 1. Potential and talent 2. Work as worship 3. TQM 4. Achieve highest human welfare 5. Character is power and wealth 6. Business is sacred 7. Self-introspection 8. Brain-stilling 9. Sound & prompt decisions
  29. 29. WORK ETHICS 4 P’s 1. Pay 2. Prospects 3. Promotion 4. Performance Improving Work Ethics 1. 2.     3. 4. 5. 6. 7. Man-making education Sympathy for employees Attitude of sport towards work Taking to giving modes Master and not slave Renunciation & Service Rewards and penalties Discipline Result of pride Employee involvement Developing attitude in work
  30. 30. GOOD WORK CULTURE Values which get manifested in behavior of employees at work place as hard work, loyalty to organization, quality of work life, job satisfaction, etc 1. Productivity and Quality 2. Utilizing resources effectively 3. Worker development 4. Develops work culture
  31. 31. FACTORS HINDERING WORK CULTURE 1. Lack of sense of discipline & min work ethos 2. Lack of hard work & commitment 3. Too many holidays 4. Wasting resources, energy 5. Absence of spirit of nationalism 6. Poor quality of service & working condition 7. Absenteeism 8. Accidents/injuries
  32. 32. FEATURES OF INDIAN ETHOS AND INSIGHTS  Balance, harmony  You are good, world is good  Rights and privileges of individuals  Knowledge of creation and creator. Insights into Indian Ethos 1. Management attitude 2. Humanizing organization 3. Interiorizing management 4. Self-introspection 5. Brain-stilling 6. Stepping Back 7. Self-dynamic Meditation 8. Role of Intuition in management
  33. 33. VALUES Relevance of values in management Values shape Beliefs Perceptions Attitude Behavior Features 1. Force affecting behavior 2. Content 3. Intensity 4. Change over time 5. Stable and enduring 6. Values differ Importance of values
  34. 34. TYPES OF VALUES 1. Instrumental 2. Terminal 3. Personal Formulating values Family influence Peer influences Situational factors Individual Ethics Experiences Values and morals
  35. 35. ETHICS IN GLOBAL BUSINESS Differences Between each human on earth Foundation in variance in their personal if people become more familiar with this value structure people accept these differences as valuable than threatening
  36. 36. HOLISTIC APPROACH FOR DECISION MAKING Steps in decision making 1. Identify the problem 2. Generate alternative solution 3. Evaluate alternatives 4. Selection of solutions 5. Implement the chosen solution
  37. 37. ETHICAL DECISION MAKING CRITERIA 1. Utilitarian Criteria 2. Focus on rights 3. Focus on justice

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