Corporate Governance & Ethics; CSR, values

  • View

  • Download

Embed Size (px)


Overall concepts of CGE, CSR, Values, holistic approach

Text of Corporate Governance & Ethics; CSR, values

  • 2. DEFINITION CG is defined as holding the balance between economic and social goals & also between individual and communal goals By Sir Adrian Cadbury Corporate Governance is stated as course of conduct that is managed by various ethical approach.
  • 3. EFFECT OF CG 1. 2. 3. 4. 5. Right of shareholder Equitable treatment of shareholder Role of stakeholder in CG Disclosure and transparency Responsibilities of the board
  • 4. PRINCIPLES OF CORPORATE GOVERNANCE 1. 2. 3. 4. 5. 6. Ensuring the Basis for an effective Corporate Governance Framework The Rights of Shareholders and Key Ownership Functions The Equitable Treatment of Shareholders The Role of Stakeholders in Corporate Governance Disclosure and Transparency The Responsibilities of the Board
  • 5. BENEFITS OF GOOD CG 1. 2. 3. 4. 5. 6. 7. Congruence of interest of boards, management Stability and growth to company Confidence in investors Reduce risk and cost of capital Motivate employees to acquire and develop skills Competitive advantage in financial market Relationship with enterprise
  • 6. It deals with problems that results from the separation of ownership & control Shareholders Boards Management Employees
  • 7. INDIAN MODEL OF GOVERNANCE External environment Internal environment
  • 8. ROLE OF BOARD OF DIRECTORS Definition of Director A Director may be defined as a person having control over the direction, conduct, management or superintendence of the affairs of a company Definition of BOD The Board of Directors of a company includes all directors elected by shareholders to represent that their interest is vested with the power of management
  • 9. STRUCTURE OF BOARD OF DIRECTOR IN INDIA BOD Executive Director Non-Executive Director Independent Director Nominee Director
  • 10. ROLE 1. 2. 3. 4. 5. 6. Commitment Clear their stand Efficient CEO Anticipate business events Meet demand of market place Earn profit for shareholder, ethical and social obligation to society through Transparency ii. Pay for performance iii. Process for determination iv. Severance payments v. Pension for non-executive Directors i.
  • 11. CONTD. 7. 8. 9. Steer discussions Long term focus and shareholder interests Promoting overall interests of the company
  • 12. ROLE OF SHAREHOLDERS 1. 2. 3. 4. 5. Financing Operations Governance Control Considerations
  • 13. RIGHTS OF SHAREHOLDERS 1. 2. 3. 4. 5. 6. Voting power Right to increased share values Right to transfer ownership Dividend Entitlement Right to inspect corporate books & records Suing for wrongful Acts
  • 14. RESPONSIBILITIES OF SHAREHOLDERS 1. 2. 3. 4. To remain informed To be vigilant To participate and vote in general meetings To exercise ones right on ones own or as a group
  • 16. ISSUES/PROBLEMS IN CG 1. 2. 3. 4. 5. 6. 7. 8. 9. Distinguishing the roles of Board and Management Composition of the board Separation of the roles of CEO and chairperson Board have committees Appointments to the board and directors reelection Directors and executives remuneration Disclosure and audit Protection of shareholders rights and expectations Dialogue with institutional shareholders
  • 17. SECURITY EXCHANGE BOARD OF INDIA (SEBI) History of SEBI Members 1. Chairman 2. 2 members for finance and administration 3. 1 member from Reserve Bank 4. 5 members appointed by Central Govt. Collective Investment Scheme Finance, Accounts & Audit of SEBI
  • 18. OBJECTIVES OF SEBI 1. Protection 2. Promotion 3. Regulation 4. Incidental Functions Powers SEBIs Role in promoting CG 1. Disclosure Standards 2. Efficient and Effective market system 3. Reliable & Effective Enforcement 4. Highest Standard of Governance
  • 19. ETHICS Business ethics is the art & discipline of applying ethical principles to examine & solve complex moral dilemmas. Why should business act ethically? Unethical Issues Benefits due to ethics
  • 20. CORPORATE SOCIAL RESPONSIBILITY To create positive impact with business. Practical Steps to CSR Scope of Social Responsibility 1. 2. 3. 4. 5. 6. 7. 8. Protecting & promoting shareholders interest Social concern & promotion of common welfare programmes Art of philanthropy Good CG itself is SR Corporate in the vanguard of rendering social service Sponsoring social & charitable causes Corporations should supplement state efforts Ensuring ecological balance
  • 21. CHAMBER OF COMMERCE REFERS 9 STEPS TO CSR 1. Confirm CEO 2. State company purpose 3. Identify key stakeholders 4. Define business principles and policies 5. Establish implementation, procedures and management system 6. Benchmark 7. Setup internal monitoring 8. Language that everyone can understand 9. Set objectives Social through process
  • 22. ETHICS Ethics are some standardized form of conduct or behavior of individuals understand & accept in a particular field of activity. Performance levels of ethics 1. Societal level 2. Stakeholder level 3. Internal policy level 4. Personal policy level
  • 23. BUSINESS ETHICS Moral principles that define right or wrong behavior in the world of business. 7 Principles 1. 2. 3. 4. 5. 6. 7. Be trustful Keep an open mind Meet obligations Have clear documents Become community involved Maintain accounting control Be respectful 3C 1. 2. 3. Compliance Contribution Consequence
  • 24. ETHICAL DILEMMAS 1. Truth Vs Loyalty 2. Individual Vs Community 3. Short term Vs Long term 4. Justice Vs Mercy Values for Managers 1. Establish boundaries 2. Establish presence of fairness 3. Establish trust 4. Establish honesty 5. Establish the expectation & commitment
  • 25. OBJECTIVES OF ETHICS 1. Study human behavior 2. Establishes moral standards of behavior 3. Judgments 4. Moral behavior 5. Human conduct in general Deals with Concept of Human conduct Ethics Nature of Ethics Science of Ethics Study of Ethics
  • 26. MODEL OF ETHICS IN MANAGEMENT Consumers shareholders Marketplace Unions Work place Quality of management Environment NGO/Govt Community Local community Impact on society
  • 27. DIFFERENT TYPES OF ETHICS 1. Transactional Ethics Principle of honesty Principle of reciprocity 2. Participatory Ethics 3. Recognition Ethics Need for Business Ethics Society Business
  • 28. INDIAN ETHOS Principles 1. Potential and talent 2. Work as worship 3. TQM 4. Achieve highest human welfare 5. Character is power and wealth 6. Business is sacred 7. Self-introspection 8. Brain-stilling 9. Sound & prompt decisions
  • 29. WORK ETHICS 4 Ps 1. Pay 2. Prospects 3. Promotion 4. Performance Improving Work Ethics 1. 2. 3. 4. 5. 6. 7. Man-making education Sympathy for employees Attitude of sport towards work Taking to giving modes Master and not slave Renunciation & Service Rewards and penalties Discipline Result of pride Employee involvement Developing attitude in work
  • 30. GOOD WORK CULTURE Values which get manifested in behavior of employees at work place as hard work, loyalty to organization, quality of work life, job satisfaction, etc 1. Productivity and Quality 2. Utilizing resources effectively 3. Worker development 4. Develops work culture
  • 31.