WHAT IS CORPORATION? COMPONENTS OF A 9.

Promoter’s contract
CORPORATION: - a corporation is not bound by any
Section 1. Title of the Code. - This agreement made by a promoter on
Code shall be known as "The 1. Corporators its behalf, unless and until the
Corporation Code of the -those who compose a corporation, corporation approves the agreement.
Philippines". whether as stockholders or as
members. WHAT IS BOARD OF
Section 2. Corporation defined. - DIRECTORS?
A corporation is an artificial being 2. Incorporators - BODs consists of elected
created by operation of law, having - those stockholders or members individuals who serves as advisor to
theright of succession and the mentioned in the articles of a corporation and act as proxy for
powers, attributes and properties incorporation as originally forming shareholders. Both for-profit and
expressly authorized by law or and composing the corporation and nonprofit corporations as well as
incident to its existence who are signatories thereof some government agencies have
BODs.
Corporation as artificial being. 3. Stockholder or Shareholders
- The Corporation Code has - those corporators in a stock BOARD OF DIRECTORS
embodied the accepted concept of a corporation. COMPOSITION
corporation as an “artificial” being. - A BOD is composed of members
- A corporation is given by law with 4. Members who are appointed or elected by the
rights, powers and liabilities usually - those corporators in a non-stock general shareholder membership.
accorded a natural person. corporation. - In non-profit, non-stock
corporations, it may be named as
Other attributes of a corporation. 5. Incorporator and corporator board of governors, board of
- Aside from a corporation being distinguished regents, or board of trustees.
considered as an artificial being it * Incorporators - Theoretically, the control of a
has other attributes like it is created - refers to those natural person company is divided between the
by operation of law. whose names appear in the articles board of directors, and the
of incorporation as originally shareholders as a single body.
Right of Succession. forming and composing the
- A private corporation may corporation and who are signatories - The BOD members are elected by
continue regardless of the death, thereof. shareholders of record during the
insolvency, incapacity of any of its * Corporators Annual Meeting of the corporation.
directors, officers or employees, - refers to all persons who compose Term of office is one (1) year.
and regardless of transfer of shares the corporation at any given time - All elected directors must own at
from one stockholder to another. and need not to be signatories to the least one (1) share of stock of the
article of the corporation. corporation.
Power, attributes and properties. - The number of directors is
- A corporation beimg a mere 6. Capacity of Incorporators determined in the company’s
creation of law, has such powers - incorporators of a corporation is in Articles of Incorporation and By-
only has expressly, or impliedly legal effect a contract between the Laws, in accordance with the
conferred upon it by the Charter or organizers and the state. Philippine Corporation Code
act of incorporation. - The minimum number of BOD is
7. Promotion five (5) and the maximum is 15
Created by Operation of law. - is the act of procuring finances members.
- A corporation comes into being by and the making all preparations
authorities of the state. necessary to launch a corporation. ORGANIZATIONAL THEORY
- It enables the manager to see that
Corporate nationality 8. Activities of promoter his or her organization and its
- It is recognized doctrine of - the promoter in the fullest sense, problems are rarely wholly unique.
corporate law that a private performs various services in
corporation is a national, citizen, launching an enterprise and may 3 Criteria for Effective
resident, or inhabitant of the employ experts, lawyers, bankers, Organizations:
country or state, by or under the solicitors and other persons to aid 1. They must be organized for
laws of which it was created or him. business performance.
organized. 2. Their structure should contain the
least number of management levels.
3. Organizational structure should CHARACTERISTICS OF THE - Corporate governance directly
facilitate training & testing of future MACHINE BUREAUCRACY impacts the profits and reputation of
organizationa lleaders. 1. High Functional Specialization the company, and having poor
2. High Formalization policies can expose the company to
ORGANIZATIONAL 3. High Centralization lawsuits, fines, reputational damage,
STRUCTURE 4. Simple & Stable Environment and loss of capital investment. Here
- The pattern of relationships 5. Mechanistic Structure are five common pitfalls your
among positions the organization corporate governance policies
and among members of the should avoid
organization. The purpose is the
division of work among members CONFLICTS OF INTEREST
of the organization, and the - Avoiding conflicts of interest is
coordination of their activities. vital. A conflict of interest within
Structures defines tasks and the framework of corporate
responsibilities, work roles and governance occurs when an officer
relationships and channels of or other controlling member of a
communication. corporation has other financial
interests that directly conflict with
OBJECTIVES OF AN the objectives of the corporation.
ORGANIZATIONAL STRUCTURE When conflicts of interest are
1. Accountability for areas of work present, they deteriorate the trust of
undertaken by groups and shareholders and the public while
individual members of the making the corporation vulnerable
organization. to litigation.
2. Coordination of different parts of ADHOCRACY
the organization and different areas - Loose, flexible, and organic OVERSIGHT ISSUES
of work. structure - Effective corporate governance
3. Effective & efficient - Characteristics requires the board of directors to
organizational performance - Don't believe in hierarchy, rule have substantial oversight of the
including resource utilization. books, dress codes, etc... company’s procedures and practices.
4. Monitoring the activities of the - Ambiguous authority structure Oversight is a broad term that
organization. - Unclear objectives encompasses the executive staff
5. Flexibility in order to respond to - Contradictory assignments reporting to the board and the
changing environmental factors. board’s awareness of the daily
6. Social satisfaction of members of TYPES OF operations of the company and the
the organization. ORGANIZATIONAL way in which its objectives are
STRUCTURE being achieved.
5 BASIC CATEGORIES OF 1. FUNCTIONAL - The board protects the interests of
ORGANIZATIONAL DESIGN 2. PRODUCT/SERVICE the shareholders, acting as check
& DIAGNOSIS 3. GEOGRAPHICAL and balance against the executive
1. Simple Structure – centralized 4. DIVISIONAL staff. Without this oversight,
2. Machine Bureaucracy – many 5. MATRIX-groupings of projects corporate staff might violate state or
layers of management and formal & functions federal law, facing substantial fines
procedures from regulatory agencies, and
3. Professional Bureaucracy – set COMMON ISSUES THAT suffering reputational damage with
by independent professional bodies ARISE IN CORPORATE the public.
4. Divisionalized Bureaucracy – GOVERNANCE
applies to multinational/ industrial - Corporate governance is the term ACCOUNTABILITY ISSUES
5. Adhocracy- often found in new used to describe the balance among - Accountability is necessary for
technology industries participants in the corporate effective corporate governance.
structure who have an interest in the From the top-level executives to
way in which the corporation is run, lower-tier employees, each level
such as executive staff, and division of the corporation
shareholders and members of the should report and be accountable to
community. another as a system of checks and
balances. Above all else, the actions
of each level of the corporation is Introduction to Ethics • INDIVIDUAL LEVEL
accountable to the shareholders and - Ethics is the rational reflection on – Relating to the behavior or conduct
the public. Without accountability, what is right, what is wrong, what is of an individual.
one division of the corporation just, what is unjust, what is good
might endanger the success of the and what is bad in terms of human FEATURES OF BUSINESS
entire company or cause behaviour. ETHICS
stockholders to lose the desire to - Ethics refers to the evaluation of • Code Of Conduct
continue their investment. moral values, principles and • Based On Moral And Social
standards of human conduct and its Values
TRANSPARENCY application in daily life to • Discipline
- To be transparent, a corporation determine acceptable human • Provides Basic Framework
must accurately report their profits behaviour . • Voluntary
and losses and make those figures - Some ethical principles are: • Relative Term
available to those who invest in o Truthfulness • New Concept
their company. Overinflating profits o Honesty • Personal Dignity
or minimizing losses can seriously o Loyalty • Related To Human Aspect
damage the company’s relationship o Respect • Study Of Goals And Means
with stockholders in that they are o Fairness • Requires Education And Guidance
enticed to invest under false o Integrity • Greater Than Law
pretenses. A lack of transparency • Gives Protection To Social
can also expose the company to ORIGIN OF ETHICS Groups
fines from regulatory agencies. - The word Ethics is derived from • Business Social Relationships
the Latin word ‘Ethicus’ & the • Different From Social
ETHICS VIOLATIONS Greek word ‘Ethikos’ Responsibility
- Members of the executive board - Ethics are an arrangement of • Not Against Profit Making
have an ethical duty to make decent principles and a branch of
decisions based on the best interests attitude which defines what is good TYPES OF BUSINESS ETHICS
of the stockholders. Further, a for individuals and society. > Meta-ethics
corporation has an ethical duty to - There are many known figures in - Study of origin and meaning of
protect the social welfare of others, the history of ethics, Greek ethical concepts.
including the greater community in philosophers Plato and Aristotle, > Normative ethics
which they operate. Minimizing modern influencers include such - Study of principles, rules or
pollution and eschewing people, as Immanuel Kant, Jeremy theories that guide our actions and
manufacturing in countries that Bentham, John Stuart Mill, D.W. judgements
don’t adhere to similar labor Ross, C.L. Stevenson, Alasdair > Applied ethics
standards as the U.S. are both MacIntyre & John Rawis. - Analysis of specific, controversi al,
examples of a way in which moral issues like abortion, animal
corporate governance, ethics, and WHAT IS BUSINESS ETHICS? rights.
social welfare intertwine. - Business ethics (also Corporate > Descriptive ethics
ethics) is a form of applied ethics or - Morals of society describing how
professional ethics that examines people behave.
ethical principles and moral or
ethical problems that arise in a SOURCES OF BUSINESS ETHICS
business environment. It applies to
all aspects of business conduct and
is relevant to the conduct of
individuals and entire organization.

LEVELS OF BUSINESS ETHICS

• MACRO LEVEL
– Relating to conduct of business in
economic, political, legal and social
systems.
• CORPORATE LEVEL
– Relating to ethical standards
embedded in the policies and
procedures of the organization.
 IMPORTANCE OF BUSINESS Why ethics are important in HRM? • Rights and duties of employees
ETHICS • Ethics - Suggests that employees are seen
• Goodwill - General term commonly used to to have rights and duties that not
• Profitability refer to both moral beliefs and only encompass basic human rights
• Survival of business ethical theory. and duties but also take into account
• Healthy competition • The study of ethics in the HRM the particular demands of the work
• Customer satisfaction context is important because of setting.
• Safeguarding customer rights dynamic and interrelated shifts in
• Protecting employees and the organisation of work. Rights and duties of employees
shareholders - Changes in international > Rights
• Smooth function of business economies - Right to freedom from
• Consumer movement - Changes at the national level in discrimination
• Importance of labor policy and institutional structures - Right to privacy
- Changes at the enterprise level in - Right to due process
SCOPE OF BUSINESS ETHICS the policies, systems and practices - Right to collective
> Ethics in Compliance of employment bargaining and association and the
- Compliance is about obeying and > Ethics in Human Resources right to strike
adhering to rules and authority. The - HRM plays a decisive role in - Right to healthy and safe
motivation for being compliant introducing and implementing working conditions
could be to do the right thing out of ethics. Ethics should be a pivotal - Right to freedom of
fear of being caught rather than a issue for Human Resource specialist. conscience and speech
desire to be abiding by the law. The ethics of human resource - Right to work
> Ethics in Finance management covers those ethical > Duties
- The ethical isues in finance that issues arising around the employer- - Duty to comply with
companies and emloyees are employee relationship, such as the labour contract
confronted with include: right and duties owed between - Duty to comply with the
• In accounting – window dressing, employer and employee. law
misleading financial analysis. - Duty to respect the
• Related party transactions not at WHO IS AN EMPLOYER? employer's property
arm’s length - The employer is the organization
• Insider trading, securities fraud or company which puts to work, Beyond basic rights and duties
leading to manipulation of the employs or hires the services of the > Rights
financial markets. employee. The employer has the - Right to meaningful work
• Executive compensation. mandate of compensating the - Right to employability
• Bribery, kickbacks, over billing of services rendered by the employee > Duties
expenses, facilitation payments. in a way which is agreed upon by • Whistleblowing
• Fake reimbursements. both parties in the employment - Reporting outside an organisation
> Ethics and human resource contract or as per the organization’s on activities, within an organisation,
management (HRM) policy. that have the potential to cause
• Objectives - An employee is a person who serious harm to the public.
- Identify factors in the emergence works for an organization or a
of the debate on ethical issues in company on a part-time or full-time Issues of justice and fairness in
HRM. basis and receives compensation for the employment relationship
- Describe and discuss basic ethical the services rendered in form of a > Organisational justice
theories and principles. salary. An employee is hired for a - Reflects individual or group
- Understand issues involved in the specific job or just to provide labor perceptions of fairness within an
consideration of rights and and does his/her work in the service organisation and behavioural
responsibilities in the employment of another entity, mostly the reactions to such perceptions.
relationship. employer. > Distributive justice (also
- Understand issues involved in the distributive fairness)
consideration of fairness and justice The rights and responsibilities of - The perception that rewards are
in the employment relationship. employers and employees distributed in relation to
- Identify challenges to the • Human rights contribution.
ethicality of HRM. -The right of people, particularly
vulnerable people, to moral
protection.
> Procedural justice (also - Considering the role of generally considered consumer
procedural fairness) HRM in society. rights.
- A concept of justice focusing on
the methods used to determine the > Ethics in Marketing > The Right to be Heard
outcomes received. - Pricing: price fixing, price - Every consumer has the right to be
> Interactional justice (also discrimination, price skimming heard after being exploited. An
interpersonal fairness). - Anti-competitive practices like upset consumer should be aware
- Refers to the quality of manipulation of supply, exclusive that he/she possesses the right to
interpersonal treatment in processes. dealing arrangements, tying take the matter to the authorities if
arrangements etc. the company does not hear them out.
The ethicality of HRM - Misleading arrangements. The right to be heard is a powerful
- Refers to the ethical endowment - Content of adertisements. right at the disposal of the consumer.
or quality of HRM- that is, the - Children and marketing. > The Right to Seek Redressal
extent to which HRM possesses - Black markets, grey markets. - Every consumer has the right to
such qualities. > Ethics in Production seek out for justice. Upset
- The HR manager or HR function: - Defective, addictive and consumers who have been a victim
- The moral development of inherently dangerous products of corporate exploitations can take
managers - Ethical relations between the the matter to the redressal agencies
- 'Rules' for a moral company and the environment and file a suit against the insensitive
manager include pollution, environmental company. This right is often put to
- Duality of roles or conflict ethics, and carbon emissions trading. ill use by many consumers and is
of interest - Ethical problems arising out of hence a very delicate right.
- HRM in the enterprise new technologies for example > The Right to Information
- Ethical leadership and Genetically modified food - Every consumer has the right to
culture - Product testing ethics information. Consumers should be
- Strategic HRM or HRM provided with truthful and genuine
as a strategic tool? Principles of Business Ethics information. Information should not
- High-commitment HRM 1. Honesty have an ill purpose and should not
* A management approach 2. Integrity be incorrect. In other words,
that emphasises employee 3. Accountability consumers have the right to truthful
engagement, participation in 4. Loyalty information.
decision making and systemic 5. Fairness > The Right to Protection
relationships between technical, 6. Concern for Others - Every consumer has the right to
social and other organisational 7. Respect for Others protection. Central Consumer
elements. 8. Law Abiding Protection Council, State Consumer
- HRM in society 9. Commitment to Excellence Protection Council, District Forum
- The commodification of 10. Leadership and Consumer Protection Redressal
labour 11. Reputation & Morale Agencies are at the disposal of the
- The suppression of 12. Promise-Keeping & consumers. These institutions aim
pluralism and collectivism Trustworthiness at protecting Indian consumers from
exploitative companies.
Summary CUSTOMERS RIGHTS > The Right to Assurance
- Ethical theories provide - It is generally a reference to a - Every consumer has the right to
frameworks for assessing whether body of law that pertains to things assurance. Assurance of qualitative
something is right or wrong the producers of goods must do to goods and qualitative services.
- Important ethical issues for HR protect customers from harm. These They also have the right to the
managers include: laws have come into existence assurance of the variety of
- Understanding the rights through series of legal disputes, and commodities and services at their
and responsibilities of employers have been shaped by results of disposal.
and employees those cases. In few instances, some > The Right to Consumer
- Understanding justice and states have actually codified Education
fairness in the employment regulations that they refer to as - Every consumer also has the right
relationship consumer rights laws, but this is not to receive consumer education. This
- Considering the ethicality yet the majority practice, and even education is often a part of every
of HRM these codifications may not cover consumer protection act and
all of the principles that are amendment. The government
should make immense effort to - Respect the confidentiality of info
share and spread the consumer acquired in course of business
rights to every remote area. except authorized
Consumers should also receive the - Adhere to and promote this code
right to be educated. This is a very of Ethics.
informative and knowledgeable
right at the disposal of the ETHICAL ISSUES IN FINANCE
consumers. - Insider Trading
- Financial Markets
ETHICS & LAW - Hostile Takeovers
> Ethics - Financial Statements
- Described by unwritten principles
- Interpreted by each individual
- Presented by philosophers,
religions, professional groups
- Personal choice
- Priority determined by an
individual if two principles conflict
- No external arbiter
- Limited enforcement
> Law
- Decribed by formal, written
documents
- Interpreted by courts
- Established by legislatures
representing all people
- Applicale to everyone
- Priority determined by courts if
two laws conflict
- Court is final arbiter of “right”
- Enforceable by police and courts

ETHICS IN FINANCE
- Ethics I in finance is one of the
main things which everyone has to
follow from small, medium and big
level company.
- It is considered important as
without financial component, no
business can run for a long time.
- Ethics in finance may vary from
industry to industry but everyone is
liable to do their work at utmost
good faith.

CODE OF ETHICS IN
FINANCE
- Act with honesty and integrity
avoiding conflicts of interest in
personal an professional
relationship
- To provide information which is
full, accurate, fair, objective, timely
and understandable.
- To promote ethical behavior
among other associates