Ethical Issues in Corp. Governance

Corporate Governance is the relationship between Corporate managers, directors and provider of equity people and institutions who
save and invest their capital to earn a return. It ensures the board of directors is accountable for the pursuit of corporate objectives and that the corporation itself conforms to the law and regulations.
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 individuals own personal attitude and a believe concerning what is right or wrong, good or bad. It is imp. To note that ethics reside within individuals and that organization doesn't have ethics. People have ethics.
Strengthened Economy Tool for socio-economic Development Tool for sustainable Development.
There are several key strategic and ethical issues in corporate governance, including
how to align the interests of top managers and shareholders, the proper level and function of executive compensation, who monitors the top management team and how that monitoring occurs, and inclusion of shareholders and nonshareholder stakeholders.
One of the primary issues in corporate governance is how to align the interests of shareholders and managers.
While most people dont object to high levels of pay for top managers (such as CEOs and CFOs), they expect pay to be connected to performance and stock price.
Ethics is concerned with the code of valued and principles that enables 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.
Brand image for the Company
Greater Loyalty
Greater Commitment to the Employees
The employees will become more Creative
Accurate and timely information about the corporations performance and business prospects, so shareholders can make informed decisions about their investments.
Best efforts to enhance shareholder wealth

Avoidance of self-serving behavior.
Corporations the world over have been publicly criticized for improving their firms bottom line at any moral or social cost. Ethics essentially refers to the issues of right, wrong, fairness and justice. Clearly, examples such as Enron, WorldCom, and even Conrad Black tested societys views on sound ethical business and the link to what society sees as good governance practices. Although the controversies involve issues matched in variety only by the types of companies, they all virtually involve some form of abuse of stakeholders trust. These cases are not representative of the entire spectrum of todays business environment; in fact, there are a number of companies whose competitive advantages are based on good corporate governance practices namely stakeholder involvement. As a result, I have chosen to present and explore in this essay the practices of one such company: the Toyota Motor Corporation while highlighting its good corporate governance principles.
Corporate social responsibility (CSR) means businesses making choices, not only based on profit margins but also the best options for society. This can encompass an area as small as the community surrounding the business, the country associated with the business or even global social responsibility. When thinking in terms of social responsibility, ethical problems inevitably arise.
1. The shrinking role of government- In the past, governments have relied on legislation and regulation to deliver social and environmental objectives in the business sector. Shrinking government resources, coupled with a distrust of regulations, has led to the exploration of voluntary and non-regulatory initiatives instead. 2. Demands for greater disclosure- There is a growing demand for corporate disclosure from stakeholders, including customers, suppliers, employees, communities, investors, and activist organizations. 3. Increased customer interest- There is evidence that the ethical conduct of companies exerts a growing influence on the purchasing decisions of customers. 4. Growing investor pressure- Investors are changing the way they assess companies' performance, and are making decisions based on criteria that include ethical concerns. 5. Competitive labour markets- Employees are increasingly looking beyond pay checks and benefits, and seeking out employers whose philosophies and operating practices match their own principles. In order to hire and retain skilled employees, companies are being forced to improve working conditions. 6. Supplier relations- As stakeholders are becoming increasingly interested in business affairs, many companies are taking steps to ensure that their partners conduct themselves in a socially responsible manner. Some are introducing codes of conduct for their suppliers, to ensure that other companies' policies or practices do not tarnish their reputation.
Ethics and corporate social responsibility are differently interpreted, complex and controversial subjects in the context of organizations which are operating internationally in diverse social, economic, political, cultural and legal environments. Ethical issues and considerations arise in particular when the business practices in the host country differ markedly from those in the home country. Three types of ethical responses have been identified: Ethical relativism (the ethical standards in the host country should be followed), Ethical absolutism (the ethical standards of the home country should be followed), and Ethical universalism (this presumes that there is a universal ethical standard of right and wrong which transcend cultural boundaries and that these must be followed by the organization(distinction between morally wrong and culturally different.
Growing sense that responsibility for righting social wrongs belongs to all organizations Growing business need for integrative mechanisms such as ethics Ethical conduct is needed in an increasingly interdependent worldeveryone in the same game Companies wish to avoid problems and/or be good public citizens
Ethics reduce operating uncertainties Voluntary guidelines avoid government impositions
The cultural context influences organizational ethics Top managers also influence ethics The combined influence of culture and top management influence organizational ethics and ethical behaviors
Top management commitment in word and deed Company codes of ethics Supply chain codes Develop, monitor, enforce ethical behavior Seek external assistance
Ethical issues and corporate social responsibility are closely related to the human resource function in organizations which are operating internationally and in diverse contexts: Minimize the exposure of employees to corrupt conduct by assisting in the development, publication, and implementation of appropriate codes of conduct. Ensure training programmes cover areas which are of ethical concern (e.g. bribery, human rights, justice, and the common good). Align performance appraisal and compensation systems so that they support the ethical stance taken. Be conversant with the type of requests that may be made of staff operating internationally, and provide them the necessary training so that they have the requisite negotiating skills to handle possible problem situations. Ensure that employees understand the difference between corrupt payments, gifts and permissible facilitation payments

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Corporate Governance is the relationship between Corporate managers, directors and provider of equity people and institutions who

Brand image for the Company

Greater Commitment to the Employees

The employees will become more Creative

Best efforts to enhance shareholder wealth

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