PPT for Business Ethics and Corporate Governance

2. Corporate Governance
Corporate governance is the system of rules, practices and processes
by which a firm is directed and controlled. Corporate governance
essentially involves balancing the interests of a company's many
stakeholders, such as shareholders, management, customers,
suppliers, financiers, government and the community. Since
corporate governance also provides the framework for attaining a
company's objectives, it encompasses practically every sphere of
management, from action plans and internal controls to performance
measurement and corporate disclosure.

3. Corporate Governance refers to the way a corporation is governed. It
is the technique by which companies are directed and managed. It
means carrying the business as per the stakeholders’ desires. It is
actually conducted by the board of Directors and the concerned
committees for the company’s stakeholder’s benefit. It is all about
balancing individual and societal goals, as well as, economic and
social goals.
Corporate Governance is the interaction between various participants
(shareholders, board of directors, and company’s management) in
shaping corporation’s performance and the way it is proceeding
towards. The relationship between the owners and the managers in an
organization must be healthy and there should be no conflict between
the two. The owners must see that individual’s actual performance is
according to the standard performance. These dimensions of corporate
governance should not be overlooked.

4. Definition of corporate governance
The definition of corporate governance most widely used is “the
system by which companies are directed and controlled”
(Cadbury Committee, 1992). More specifically it is the
framework by which the various stakeholder interests are
balanced.
IFC states, “the relationships among the management, Board of
Directors, controlling shareholders, minority shareholders and
other stakeholders”.

5. Benefits of Corporate Governance
Good corporate governance ensures corporate success and
economic growth.
Strong corporate governance maintains investors’ confidence, as a
result of which, company can raise capital efficiently and effectively.
It lowers the capital cost.
There is a positive impact on the share price.
It provides proper inducement to the owners as well as managers to
achieve objectives that are in interests of the shareholders and the
organization.
Good corporate governance also minimizes wastages, corruption,
risks and mismanagement.
It helps in brand formation and development.
It ensures organization in managed in a manner that fits the best
interests of all.

6. Ethical issues in human resource management

7. Mention the characteristics of corporate governance
Ethical by nature.
Systematic.
Represents business decisions.
Integral part of the contract.
Leads to smooth functioning of markets.

8. Objectives of Corporate Governance.
Strengthens confidence.
Transparency
Balanced Board.
Clarity of policies and procedures.
Vision of the Board.
Investment Tool.
Resolving Tool.

9. Constitution of Corporate Governance
BODs
Stakeholders.
Management.

10. Essentials of Corporate Governance
Transparency and Disclosure
Fairness.
Responsibility and answerability.
Trusteeship.
Empowerment.
Controls.
Ethical corporate citizenship.

11. Meaning hiring /recruitment
Recruitment is a positive process of searching for prospective
employees and stimulating them to apply for the jobs in the
organization. When more persons apply for jobs then there will be
a scope for recruiting better persons.
According to Edwin B. Flippo, “It is a process of searching for
prospective employees and stimulating and encouraging them to
apply for jobs in an organization.”
Kempner writes, “Recruitment forms the first stage in the process
which continues with selection and ceases with the placement of
the candidates.”

12. The principles of ethical hiring
Organizations comprise employees who need respect as people.
Streamlining has lead to downsizing or right-sizing of organizations.
Legislative requirements include: EEO legislation, Affirmative
Action legislation, Worker’s Compensation Acts and Regulations and so
on.
Discriminatory recruitment practices may inhibit the success of women
or people from minority backgrounds, but also older applicants
Establishing and maintaining their own recruiting guidelines in the
spirit of professionalism, fairness, and reasonableness;
Considering the best interests of their organization when determining
any guidelines for the timing of recruiting activity and offers of
employment and the length of time any offers for employment should be
held open;

13. Disseminating recruiting guidelines on the timing of offers and
responses to those offers;
Publishing their policies so that all parties involved in the recruiting
process are educated in advance;
Acting in a manner consistent with their published guidelines, in a way
that is transparent and reliable;
Communicating to resolve issues on a case-by-case basis.
Competent, Capability, Commitment, Character, qualifications and
skills candidates can be hired.
Advertise only genuine jobs
Not abusing the power position
Soliciting only information that is necessary
Not asking loaded questions or seeking to entrap candidate
Assessing suitability on the basis of ability

14. Maintaining confidentiality on the use and storage of candidate
information
Informing candidates appropriately of the selection decision
A void Misleading job advertisements.
Avoid Misrepresenting the job requirements
Do not discriminate based on race, color, gender, religion, disability
status, etc.
Respect the applicant’s right to privacy: marital situation,economic
background, personal life.
Don’t imply things you can’t deliver: job security, benefits.
Observe all laws relating to minimum wage, hiring young or immigrant
workers.

15. Firing
The employee may not be performing up to the standard expected, may
be having behavioral problems or is simply unable to perform certain
tasks.
To remove an employee from their job, typically for reasons such as poor
work quality or disagreeable behavior. "The manager had to fire his
secretary after she failed to show up for work for an entire week."
When someone is removed from their job for reasons unrelated to the
employee (the company must cut positions in order to save money, for
example), it is typically called a layoff.

16. Principles of firing
Do not fire an employee in anger.
Provide feedback, so the employee knows that he is failing
Get all of your stuff beforehand
 The right time and the right place really matters.
 Never rush into a meeting.
Don’t make it too long
Be polite
See the facts
Keep a track of protecting your own business
Never go for it alone
Never make it sound like a huge surprise
Follow policy
Document the reasons for discharge
Be truthful
Include an observer.
Use a termination letter.
Be respectful.

17. Workers Safety
For many organizations, health and safety is a corporate governance issue. The board
should integrate health and safety into the main governance structures, including board
sub-committees, such as risk, remuneration and audit.
Principles of workers safety
Acquire and keep up-to-date knowledge of work, health and safety matters
Gain an understanding of the nature of the operations of the business and generally of
the hazards and risks associated with those operations
Ensure that there are available for use, and used, appropriate resources and processes
to eliminate or minimize risk to health and safety
Ensure there are processes for receiving and considering information regarding
incidents, hazards and risk and responding in a timely way to that information
Ensure that there is, and its implemented, processes for complying with any duty or
obligation under this Act
Take Regular Breaks
Use Tools And Machines Properly
Reduce Workplace Stress
Wear The Correct Safety Equipment

18. Need and Importance of Worker Safety
Loss of human lives.
Financial cost of Disability and Death of employees.
CSR.
Accident avoidance.
Improve employee satisfaction and commitment.
Better industrial relations.
Increased Productivity.
Raises Employee Morale.

19. What is the definition of whistle blowing?
Whistle blowing means calling attention to wrongdoing that is
occurring within an organization.
When a former or the existing employee of the organization raise his
voice against the unethical activities being carried out within the
organization is called as whistle blowing and the person who raise his
voice is called as a whistle blower.

20. Principles of Whistle Blowing
Reporting wrongdoing or a violation of the law to the proper
authorities.
Such as a supervisor, a hotline or an Inspector General
Refusing to participate in workplace wrongdoing
Testifying in a legal proceeding
leaking evidence of wrongdoing to the media

21. Types of Whistle Blowing
Internal Whistle Blowing: An employee informs about the
misconduct to his officers or seniors holding positions in
the same organization.
External Whistle Blowing: Here, the employee informs
about the misconduct to any third person who is not a
member of an organization, such as a lawyer or any other
legal body.

22. Procedure for whistle Blowing
1. Reporting.
2. Investigation.
3. Safeguards.
4. Disciplinary action.

23. Reasons for avoiding Whistle Blowing
Most often, the employees fear to raise a voice against the
illegal activity being carried out in the organization because
of following reasons:
Threat to life
Lost jobs and careers
Lost friendships
Resentment among workers
Breach of trust and loyalty

24. Following are the acts for which the voice can be raised and are
law protected:
Fraud
Health and safety in danger
Damage to the environment
Violation of company laws
Embezzlement of funds
Breach of law and justice

25. Guidelines for Whistle Blowing.
Guidelines for Whistle Blower.
Magnitude of consequences
Harm
Benefit
Probability of effect.
Temporal immediacy
Proximity
Concentration of effect.
Guidelines for Whistle Organization.
Process should be transparent.
Protect the confidentiality of the whistle blower.
Companies should not fear crank calls
Make known the procedure.

27. Equality of opportunity
Every employee is entitled to an equal chance to succeed
regardless of the employee‘s race, color, national origin,
ancestry, sex, mental and physical disability, age, religion,
sexual orientation, gender identity, marital status or other legally
protected status. This means that we comply fully with
applicable human rights and employment equity laws, and
companies should not discriminate unlawfully in any aspect of
employment, including recruiting, hiring, compensation,
promotion or termination.

28. Equal employment opportunity
It is equal opportunity in employment. Examples of legislation to
foster it or to protect it from eroding include the U.S. Equal
Employment Opportunity Commission, which was established
by Title VII of the Civil Rights Act of 1964 to assist in the protection
of United States employees from discrimination. The law was the
first federal law designed to protect most US employees from
employment discrimination based upon that employee's (or
applicant's) race, color, religion, sex, or national origin. Employment
discrimination entails areas such as firing, hiring, promotions,
transfer or wage practices and it is also illegal to discriminate in
advertising, referral of job applicants, or classification. The Title is
pertinent in companies affecting commerce that have fifteen or more
employees. The Equal Employment Opportunity Commission
(EEOC) is section 705 of the title.
Equal employment opportunity was further enhanced
when President Lyndon B. Johnson

29. Laws of Equality
The Age Discrimination in Employment Act of 1967
The Americans with Disabilities Act of 1990
The Genetic Information Nondiscrimination Act
The Employment Non-Discrimination Act

30. Discrimination
Discrimination based on a person's ethnicity, race or culture may
manifest itself in a number of ways in the workplace. For example,
when the policies for a business discriminate against persons of
certain ethnicities or races, or when an individual receives unequal
treatment due to his ethnicity, this is known as disparate impact and
disparate treatment, respectively. This may include grouping
employees based on race and having differing standards on
promotions, punishment, and hiring and placement of employees
based on ethnicity, race or cultural orientation.

31. Acts.
Equal Pay Act of 1963: Requires that men and women receive equal
pay for doing the same or similar jobs.
Title VII of the Civil Rights Act of 1964: Protects people from being
discriminated against based upon their race, color, religion, sex, and their
nationality.
Age Discrimination in Employment Act of 1967: Protects people
who are age 40 or older from being discriminated against based on age.
Civil Service Reform Act of 1978: Protects people from being
discriminated against based on their marital status.
The Pregnancy Discrimination Act of 1978: Protects women who are
pregnant from being discriminated against.

32. The Immigration Reform and Control Act of 1986: Protects
people from being discriminated against based on their citizenship
or national origin.
Americans with Disabilities Act of 1990: Protects people with
disabilities from being discriminated against based upon their
disability (or their perceived disability).
The Genetic Information Nondiscrimination Act of 2008:
Protects people from being discriminated against based upon the
differences in their DNA that make it more likely that they will get
a certain disease.

35. Ethics and remuneration
There are ethical issues pertaining to the salaries, executive
perquisites and the annual incentive plans etc. The HR manager is
often under pressure to raise the band of base salaries. There is
increased pressure upon the HR function to pay out more incentives
to the top management and the justification for the same is put as
the need to retain the latter. Further ethical issues crop in HR when
long term compensation and incentive plans are designed in
consultation with the CEO or an external consultant. While
deciding upon the pathet there is pressure on favouring the interests
of the top management in comparison to that of other employees
and stakeholders.

36. How to manage remuneration ethically?
Remuneration committee.
Remuneration policy.
To set guidelines for principles.
To set guidelines for rewards.

38. Ethics in retrenchment
Retrenchment in layman’s term is known as ‘reduction of workforce’
while in legal terms it is regarded as “termination of contract’. The
industrial court confined the usage of the term ‘retrenchment’ to
mean a discharge of surplus labour. In HR term, ‘retrenchment’ is
defined as an activity to legally terminate any employment contract
with the employee by offering a compensation package. Such offer to
retrench may come into as mutual acceptance or forced upon by one
party which of course would be the employer.
Show appreciation
Offer an explanation
Expectations of staff moving forward
Focus on workloads
Exit strategy

40. An ethical dilemma is a decision making
problem between two possible moral imperatives,
neither of which is unambiguously acceptable or
preferable. It is sometimes called an ethical
paradox in moral philosophy.
An ethical dilemma (ethical paradox or moral
dilemma) is a problem in the decision-making
process between two possible options, neither of
which is absolutely acceptable from an ethical
perspective. Although we face many ethical and
moral problems in our life, most of them come
with relatively straightforward solutions.
An ethical dilemma is a conflict between
alternatives where, no matter what a person does,
some ethical principle will be compromised.
Analyzing the options and their consequences
provides the basic elements for decision-making.

41. Examples of ethical dilemmas
Some examples of ethical dilemmas examples include:
Taking credit for others’ work
Offering a client a worse product for your own profit
Utilizing inside knowledge for your own profit
How to solve an ethical dilemma? (Approaches)
Refute the paradox (dilemma): The situation must be carefully
analyzed. In some cases, the existence of the dilemma can be logically
refuted.
Value theory approach: Choose the alternative that offers the greater
good and the lesser evil.
Find alternative solutions: In some cases, the problem can be
reconsidered, and the new alternative solutions may arise.
Utility approach: Cost and Benefit.
Human rights approach: Individual should valued.
Justice approach: Equality and fair decisions.

42. Reasons for ethical dilemma
Pressure from Management
Ambition and Discrimination
Money
Unclear Policies
Unethical Culture

44. Multi national companies expand globally and enter foreign
markets, ethical conduct of the officers and employees assume
added importance since the very cultural diversity associated
with such expansion may undermine the much shared cultural
and ethical values observable in the more homogenous
organizations.

45. Reasons for ethical differences in global business.
1. Language.
2. Communication.
3. Body language.
4. Perceptual problem
5. Religion
6. Values and attitudes.
7. Customs and manners.
8. Norms.

46. Ethical issues in global business
Employment
Corruption
Human Rights
Pollution
Harmful products.
Intellectual Property Protection.
Price discrimination.
Harassment.

47. Corporate social responsibility (CSR)
Corporate social responsibility (CSR) is defined as “the corporate
conscience, citizenship, social performance, or sustainable
responsible business, and is a form of corporate self-regulation
integrated into a business model. CSR policy functions as a built-
in, self-regulating mechanism whereby business monitors and
ensures its active compliance with the spirit of the law, ethical
standards, and international norms.”
According to Lord Holme and Richard Watts, “CSR is the
continuing commitment by business to behave ethically and
contribute to economic development while improving the quality
of life of the workforce and their families as well as of the local
community and society at large.”

48. Types of CSR
1. Environmental CSR.
2. Human rights related CSR.
3. Financial CSR.
4. Political CSR.

49. Corporate Responsibilities of Employers
 Towards Share holders/owners.
Reasonable dividend.
Soundness.
Information.
Protection of assets.
Towards customers.
Need satisfaction.
Regular flow of goods.
Courteous Service.
Precise information.
Fair trade practices.

50. Towards workers/Employees
Pay fair wages.
Provide good working condition.
Provide adequate service benefits.
Extend and gain cooperation.
Recognize Employee’s rights
Provide opportunities for growth.
Towards suppliers.
Fair contract with suppliers.
Regular payment.
Informing about changes in specification in advance.
Keeping the suppliers information for the future plans.

51. Towards Government
To obey the laws.
Honest payment of taxes.
Avoiding Corruption.
Conducting fair trade practices.
Towards society / community
Socio economic benefit.
Improvement of local environment.
Employment opportunities.
Efficient use of resources.
Ethical behavior.
Towards Creditors.
Making proper payment.
Having good relationship.

52. Theories of CSR
 Shareholder value theory/ Traditional view of CSR
Creation of wealth for the shareholders and CSR is secondary.
 Stakeholder theory.
Shareholders interest is secondary, and protect the interest of all
stakeholders is primary.
 Corporate social performance theory.
Contribution towards society.
 Corporate citizenship theory.
Corporate should be treated as citizen.