Tamilnadu Samacheer Kalvi 11th Commerce Notes Chapter 18 Business Ethics and Corporate Governance Notes
→ ‘Businesses need to go beyond the interests of their companies to the communities they serve.’ – Ratan Tata, Former Chairman of the Tata group. ,
→ ‘A business that is in the making of only money is a poor kind of business.’ – Henry Ford, Founder of Ford Motor Corporation.
→ Ethics is derived from the Greek word ‘ethos.’which means a person’s fundamental orientation towards life.
→ Business ethics may be defined as a set of moral standards to be followed by owners, managers and business people.
→ All business units have realised that ethics is vitally important for the existence and progress of the business as well as the society.
→ Top management has a very important role to guide the entire organization towards ethical behaviour.
→ Code of ethics documents the generally accepted principles of ethical conduct.
→ ‘The proper governance of companies will become as crucial to the world economy as the proper governing of countries.’ Jeames Wolfenson, President of World Bank, 1999
→ “Corporate governance is about promoting fairness, transparency and accountability.” -World Bank
→ “Corporate governance is defined as the system by which companies are directed and controlled.” – Cadbury committee
→ MNC is defined to be an enterprise operating in several countries but managed from one country.
→ India ranks 10th in the world in factory output.
→ India has become big employment generator especially amongst young graduates.
→ The 2012 Singapore corporate governance code recommends a majority of Independent Directors when the chairman of me Board is not independent.
→ The Council of Institutional Investors (CI1), Corporate Governance Policies state that at least 2/3rd of the directors should be independent.
→ European commission urges member states to have sufficient number of independent non-executive or supervisory directors on Board.
→ The European Commission has proposed legislation that would require non-executive directors to be 40% women by 2020, up from 16.6% in 2013.
→ UK businesses had voluntary targets first set in 2011 i.e. to have 25% women on FTSE100 (The Financial Times Stock Exchange) Boards by 2015.
→ A bill pending in the Brazilian Senate would impose a 40% female quota on the Boards of state owned enterprises by 2022.
→ In the global and highly interconnected world of business and finance where money and corporate operations constantly cross borders, creating trust is something that we need to do together.