The Essential Component of Corporate Governance - 9749 Words

Center for International Private Enterprise ECONOMICREFORM Feature Service ® January 12, 2006 Business Ethics: The Essential Component of Corporate Governance John D. Sullivan, Ph.D. Executive Director, CIPE Aleksandr Shkolnikov, Program Officer, Global, CIPE Given ï ¬ nancial scandals and the resulting new mandates on business, ï ¬ rms ï ¬ nd themselves pressed to develop strong codes of ethics to guide the behavior of board members, managers, and employees. Although the concern with ethics has always been a part of doing business, business leaders today are beginning to think about ethics as a set of principles and guides of behavior rather than a set of rigid rules. In this sense, business ethics is not only an attempt to set a standard by†¦show more content†¦2. The Rights of Shareholders and Key Ownership Functions: The corporate governance framework should protect and facilitate the exercise of shareholders’ rights. 3. The Equitable Treatment of Shareholders: The corporate governance framework should ensure the equitable treatment of all shareholders, including minority and foreign shareholders. All shareholders should have the opportunity to obtain eï ¬â‚¬ective redress for violation of their rights. 4. The R ole of Stakeholders in Corporate Governance: The corporate governance framework should recognise the rights of stakeholders established by law or through mutual agreements and encourage active co-operation between corporations and stakeholders in creating wealth, jobs, and the sustainability of ï ¬ nancially sound enterprises. 5. Disclosure and Transparency: The corporate governance framework should ensure that timely and accurate disclosure is made on all material matters regarding the corporation, including the ï ¬ nancial situation, performance, ownership, and governance of the company. 6. The Responsibilities of the Board: The corporate governance framework should ensure the strategic guidance of the company, the eï ¬â‚¬ective monitoring of management by the board, and the board’s accountability to the company and the shareholders. For more information seeShow MoreRelatedIT/IS Strategy Governance and Legislation1032 Words   |  4 PagesIT/IS Strategy, Governance, a nd Legislation Introduction Information technology and the processes and systems that make up an organizations information technology are now essential parts of any business. The combination of business aims and the information and operations that are a part of any comprehensive information technology system make it an integral part of the functioning of any organization, and proper IT governance and strategy is thus a fundamentally important business process or areaRead MoreCorporate Governance : Good Business Management1658 Words   |  7 PagesThe general idea we have in mind when we hear the term Corporate Governance, is that it is an almost unattainable goal. The reason is the only companies that have corporate governance are big businesses with exorbitant capital, or, at least have shares on the stock-market. It is based on the idea that applying good organizational governance practices, is exclusive and expensive. But those who argue this idea are very far from reality. I must confess that I was one of these people. Currently allRead MoreWhy Talking About Corporate Governance1435 Words   |  6 PagesWhy talking about corporate governance? Good â€Å"corporate governance is synonymous with â€Å"good business management†, that reinforcing surveillance systems, management and administration of a company, making them efficient, effective, honest, transparent and democratic. A company with high quality management will have access to financing (public or private) in better conditions and terms. Make appropriate business decisions to reach a higher level of accounting transparency, more efficiently manageRead MoreLegal And Regulatory Environments And Ethics1712 Words   |  7 Pages1. Title: legal and Regulatory Environments and Ethics: Essential Components of a Fraud and Forensic Accounting Curriculum Forensic accounting is defined as the action of identifying, recording, settling, extracting, sorting, reporting, and verifying past financial data or other accounting activities for settling current or prospective legal disputes or using such past financial data for projecting future financial data to settle legal disputes. Forensic accountant are very important part of theRead MoreCorporate Governance - Role of Board of Directors1622 Words   |  7 PagesCORPORATE GOVERNANCE - ROLE OF BOARD OF DIRECTORS People often question whether corporate boards matter because their day-today impact is difficult to observe. But, when things go wrong, they can become the center of attention. Certainly this was true of the Enron, Worldcom, and Parmalat scandals. The directors of Enron and Worldcom, in particular, were held liable for the fraud that occurred: Enron directors had to pay $168 million to investor plaintiffs, of which $13 million was out of pocketRead MoreWhy Ethics Are Important to Auditors1355 Words   |  6 Pagesconsulting, planning taxes and deregulation preparation. There are generally two types of auditors: External Auditors: These auditors visit from outside the company to access and weigh up the financial statements of their clients or to carry out essential evaluation than necessary. They are usually appointed for a time span of 1 year. Internal Auditors: They are hired by the companies as employees to access and assess the internal direction necessary in the company. They testify directly to BODsRead MoreFunctions Of The Control Activities738 Words   |  3 Pagesreassessment, and the establishment of responsibility and accountability. Nevertheless, effective control activities in themselves do not ensure that the organization has implemented an effective system of internal controls; therefore all five COSO components must be existent to make certain that control activities function correctly and consistently overtime (Edelstein, 2004). Information and communication. Information is necessary to convey internal control responsibilities to support the entityRead MoreCorporate Social Responsibility and Single Strongest Argument1106 Words   |  5 Pagesand explain the Pyramid of Corporate Social Responsibility. Provide several examples of each ‘layer’ of the pyramid. Identify and discuss some of the tensions among the layers or components. PELE 2. In your review, what is the single strongest argument against the idea of corporate social responsibility? What is the single strongest argument for corporate social responsibility? Briefly explain 3. Differentiate between corporate social responsibility and corporate social responsiveness. GiveRead MoreOrganizations and Their Ethics and Social Responsiblity Essay733 Words   |  3 Pages Ethics and social responsibility are integral components in developing a strategic plan while considering stakeholder needs. As such, ethics and social responsibility should be deemed as an essential strategic concern within all organizations. Ethics and social responsibility has the capacity to make or break an organization; the success of an organization’s strategic plan is dependent upon it. This paper will explain the role of ethics and social responsibility in developing a strategic plan whileRead MoreDifference Between Stockholder And Stakeholders986 Words   |  4 Pagesto express their concerns openly. 4. How governance structure in a company can respond to corporate social responsibility Corporate Social responsibility is something where a company takes in to consideration interests of everyone involved i.e. employees, stakeholders, and customers. Governance is responsible to see if an organization is fulfilling its social responsibilities. Governance in some organizations has setup policies and guidelines for corporate social responsibilities, which each organization