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Unit-5 - Class

The document discusses ethical and governance issues, including their meaning and importance. It defines ethics as concerned with morality and right/wrong, and governance as the system that provides a framework for managing organizations. Ethical governance refers to decision-making and behavior that is ethical and responsible. The document also outlines fundamental principles of ethics and governance as well as ethical issues in financial management.

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32 views2 pages

Unit-5 - Class

The document discusses ethical and governance issues, including their meaning and importance. It defines ethics as concerned with morality and right/wrong, and governance as the system that provides a framework for managing organizations. Ethical governance refers to decision-making and behavior that is ethical and responsible. The document also outlines fundamental principles of ethics and governance as well as ethical issues in financial management.

Uploaded by

arviii63
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Module No. 5: Ethical and Governance Issues SAGARA VANA.

Introduction to Ethical and Governance Issues: Fundamental Principles, Lecturer in commerce


Ethical Issues in Financial Management, Agency Relationship, Transaction Cost
Theory, Governance Structures and Policies, Social and Environmental Issues, Mob:99866-36693
Purpose and Content of an Integrated Report.

NTRODUCTION

Ethics and governance issues are fundamental pillars of a well-functioning society, organization, or
institution. These issues encompass a range of principles, practices, and considerations aimed at
ensuring responsible and sustainable decision-making. Understanding these issues is crucial for ensuring
that organizations operate responsibly, transparently, and in the best interests of their stakeholders.

Ethical and governance issues are not just about compliance; they are fundamental to the integrity,
reputation, and long-term success of any organization. In today's interconnected and transparent world,
the importance of ethics and good governance cannot be overstated. By prioritizing ethical behaviour
and sound governance practices, organizations can positively impact not only their stakeholders but also
society at large.

Meaning

Ethics

Ethical governance is a combination of the words ‘ethics’ and ‘governance’. The word “Ethics” comes
from Greek word ‘ethos’, referring to character and individual behaviour. ‘Ethics’ is concerned with the
study of morality and the application of reason to clarify specific rules and principles that determine
right and wrong for a given situation.These rules and principles are called ‘ethical theories’. In the
context of governing an organization or business firm, application of this is referred as ‘ethical
governance’.

Governance

Governance is a system that provides a framework for managing organisations. It identifies who can
make decisions, who has the authority to act on behalf of the organisation and who is accountable for
how an organisation and its people behave and perform. Ethics, risk management, compliance and
administration are all elements of governance

Governance enables the management team and the board to run organisations legally, ethically,
sustainably, and successfully, for the benefit of stakeholders, including shareholders, staff, clients and
customers, and for the good of wider society

Ethical governance

Ethical governance refers to the framework, principles, and practices that guide an organization's
decision-making processes and behaviour in an ethical and responsible manner. It involves aligning
business activities with societal values, legal requirements, and moral standards.
Ethical Issues
Ethical issues in business refer to moral principles and standards that govern the behaviour of
individuals and organizations. These include honesty, integrity, fairness, respect, and responsibility.
Ethical behaviour in business is not just about complying with legal requirements but also about doing
what is right, even beyond what the law mandates.

Governance Issues
Governance refers to the system of rules, practices, and processes by which a company is directed and
controlled. Good corporate governance ensures that companies operate in a manner that is accountable
and transparent to their stakeholders.
Fundamental Principles
1. Honesty and Integrity:
2. Fairness:
3. Respect:
4. Responsibility:
5. Transparency:
6. Loyalty :
7. Accountability:
8. Environmental Consciousness:
9. Compassion:
10.Law-Abiding:
11. Compliance and Reporting:

Ethical Issues in Financial Management,

Ethical issues in financial management are of paramount importance, as financial decisions can
significantly impact not only the economic success of a business but also the well-being of its employees,
customers, and the broader society. The complex nature of financial transactions and the immense power
vested in financial managers to control and allocate financial resources crucial. make ethical
considerations

1. Transparency and Honesty:


2. Conflict of Interest:
3. Insider Trading:
4. Fair Treatment:
5. Regulatory Compliance:
6. Responsible Investment:
7. Accountability:
8. Risk Management:
9. Integrity in Financial Reporting:
10. Respect for Confidentiality:
11. Professional Competence:
12. Fighting Corruption and Bribery:
13. Whistle blowing:
14. Consumer Protection:

Agency Relationship,

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