Intro About Ie

Introduction to Business Ethics, Corporate
Governance & Corporate Social

Responsibility
Subject : IE & BE
Business Ethics
• The word “Ethics" derived from the Greek word ethicos meaning customs or
character.
• Ethics is a system of moral principles and attitude that guides our actions to
be morally correct, fair and just.
• Ethics is about enforceable morality, justice and fairness of conduct, actions

and governance by individuals, institutions, companies, organizations,
societies and governments.
• However, ethics are not the law unto itself nor are they instruments parallel
to the laws of the land.
Nature of Business Ethics
• The concept of ethics deals with human beings only.
• The study of ethics has become a set of systematic knowledge

about moral behaviour and conduct.
• The science of ethics is a normative science.
• Ethics deals with human conduct which is voluntary and not forced
or coerced by person or circumstances.
• Business ethics is nothing but the application of ethics in business.

Objectives of Business Ethics
• Study of human behaviour
• Establishes moral standard/norms of behaviour
• Makes judgment upon human behaviour based on this standard and

norms
• Prescribes moral behaviour,makes recommendations how to or how

not to behave
• Expresses an opinion or attitude about human conduct in general.

Need for Business Ethics
• Business operates within the society
• Every business irrespective of size exist more on ethical

means or in total regard to its concern to survive long.
• Business needs to function as responsible corporate

citizens in the country.
Importance of Business Ethics
• Personal gain
• Individual values vis-à-vis organizational goals
• Managers values and attitudes
• Competitive pressure
• Cross-cultural contradictions
What is not Business Ethics
• Ethics is different from religion
• Ethics is not synonymous with law
• Ethical standards are different from cultural traits
• Ethics is different from feelings
• Ethics is not a science in the strictest sense of the term
• Ethics is not just collection of values

Corporate Governance
❑ Corporate means legally united into a body so as to act as an individual.
Governance is control or direction. the two put together it gives a meaning
that it brings together many different groups for the purpose of conducting
business.
❑ Corporate governance is a set of processes, policies, regulations, rules,

customs and laws governing the way a corporation should be directed,
administered and controlled to maximise the efforts of its employees and the
resulting gains for all stakeholders.
❑ Stakeholders include shareholders or promoters, board of directors,

management, financiers, employees, customers, vendors, society,
community, government, etc.
Corporate Governance
❑ Important issues relating to ethics that corporate governance must focus on,
are: setting ethical standards and rules in the company, accountability of
actions, managing the trusts with respect to fiduciary duty, and managing
economic efficiency without compromising ethical principles and values.
❑ Now-a-days many management experts feel that corporate governance

should also be equally concerned with employee morale, technological
improvement, product quality, product reliability, customer satisfaction, and
the environment protection.
ETHICS AND CORPORATE GOVERNANCE
To achieve good corporate governance, the following ethical aspects must be

ensured:
❑ Rights and equitable treatment of shareholders
❑ Protection of interests of other stakeholders
❑ Role and responsibilities of the board
❑ Integrity and ethical behaviour
❑ Disclosure and transparency
CORPORATE SOCIAL RESPONSIBILITY
❑ Corporate Social Responsibility 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.
❑ CSR, was being a voluntary measure, has no rules, regulation or procedure

to comply with initially
❑ Some companies appoint an Ethics Officer – a senior member of the

management team – who would not only establish ethical standards but
also oversee the company’s compliance to its CSR policy.
• The companies having Net worth of INR 500 crore or
more or Turnover of INR 1000 crore or more or Net Profit
of INR 5 crore or more during any financial year shall be
required to constitute a Corporate Social Responsibility
Committee of the Board "hereinafter CSR Committee"
• Corporate Social Responsibility Rules under Section

135 of the Companies Act, 2013,
Thank You

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Introduction to Business Ethics, Corporate

Governance & Corporate Social

• Ethics is about enforceable morality, justice and fairness of conduct, actions

• The study of ethics has become a set of systematic knowledge

• The science of ethics is a normative science.

• Business ethics is nothing but the application of ethics in business.

• Establishes moral standard/norms of behaviour

• Makes judgment upon human behaviour based on this standard and

• Prescribes moral behaviour,makes recommendations how to or how

• Expresses an opinion or attitude about human conduct in general.

• Business operates within the society

• Every business irrespective of size exist more on ethical

• Business needs to function as responsible corporate

• Individual values vis-à-vis organizational goals

• Managers values and attitudes

• Ethics is not synonymous with law

• Ethical standards are different from cultural traits

• Ethics is different from feelings

• Ethics is not a science in the strictest sense of the term

• Ethics is not just collection of values

❑ Corporate governance is a set of processes, policies, regulations, rules,

❑ Stakeholders include shareholders or promoters, board of directors,

❑ Now-a-days many management experts feel that corporate governance

To achieve good corporate governance, the following ethical aspects must be

❑ Corporate Social Responsibility is the continuing commitment by

❑ CSR, was being a voluntary measure, has no rules, regulation or procedure

❑ Some companies appoint an Ethics Officer – a senior member of the

• Corporate Social Responsibility Rules under Section

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