Corporate governance is the system by which businesses are controlled and directed. It involves the relationships between a company’s management, its board of directors, its shareholders and other stakeholders. Corporate governance is concerned with the ways in which these groups interact with each other and make decisions about the running of the company.
Business ethics is the study of ethical principles and standards that guide business behavior. It covers a wide range of topics, including corporate social responsibility, employee rights and responsibilities, environmental protection, fair trade, sustainability and much more. Business ethics is a relatively new field of study, only really coming to prominence in the last few decades. However, it has quickly become an important area of concern for businesses all over the world.
There is no one-size-fits-all answer to the question of how businesses should behave ethically. Every company is different, and will have its own unique ethical challenges to grapple with. However, there are some general principles that all businesses can and should follow. These include acting in a fair and honest way, respecting the rights of others, and behaving in a socially responsible manner.
Businesses have a responsibility to uphold high ethical standards, not only for their own sake, but also for the sake of society as a whole. When companies act unethical, it can damage public trust in business, and lead to negative consequences for both individuals and society as a whole. Ethical business practices are not only the right thing to do, they are also essential for the long-term success of any business.
The confidence of leadership in the American business appears to be declining as a result of corporate scandals, notably the Enron scandal. The Sarbanes-Oxley Act, which was passed in the first wave of scandals, “requires businesses to establish secret systems so that employees and others can alert them to suspected illegal or unethical accounting practices.”
Corporate governance and business ethics are important to the long term success of businesses. Businesses should have a system of corporate governance in place that will help to ensure that ethical values are adhered to. Part of having good corporate governance is making sure that the members of the board of directors are independent and not beholden to any one person or special interest group.
There are different ways to view business ethics. One view is that businesses should be run purely for profit. This view was espoused by Milton Friedman who said, “The social responsibility of business is to increase its profits.” He believed that companies should not get involved in charitable work or anything else that would decrease their profits. Another view is that businesses have a responsibility to the communities in which they operate. This view was put forward by Peter Drucker who said, “The only valid purpose of a firm is to create a customer.” He believed that businesses should focus on creating value for their customers and not just on making profits.
There are many different ethical issues that businesses have to deal with. Some of these include insider trading, embezzlement, bribery, fraud, and discrimination. Insider trading is when someone uses information that is not available to the public to make investment decisions. Embezzlement is when someone steals money from their employer. Bribery is when someone offers a bribe to another person in order to get them to do something illegal or unethical. Fraud is when someone lies in order to get someone else to do something. Discrimination is when someone treats another person unfairly because of their race, gender, or religion.
Businesses have to be careful that they do not engage in unethical practices. If they do, they can face many different penalties. These include being fined, losing their license to operate, and even going out of business. Additionally, their reputation will be damaged and it will be hard for them to regain the trust of their employees, customers, and shareholders.
When making decisions about whether or not to engage in certain activities, businesses should always consider the potential consequences. They should ask themselves if the activity is legal, if it is ethical, and if it is in the best interests of their employees, customers, shareholders, and the community. Only by considering all of these factors will they be able to make the best decision for their business.
It’s critical that businesses recognize this and regain public trust through their own efforts. In today’s world, technology is able to track emails from high-ranking executives demonstrating corporate avarice has overcome good behavior (Vogl).
Businesses should remember that their actions not only affect them, but trickle down and have an effect on employees, shareholders, the environment, and most importantly society as a whole. Corporate greed has been rampant in America and it is time for businesses to be more ethical in their practices.
There are many programs and policies Corporate America can put into place to increase its ethical standards. Corporate America has long been synonymous with greed and corruption. In order for Corporate America to increase its ethical standards, it needs to improve its corporate governance. Corporate governance is “the system by which companies are directed and controlled” (The Economist). Corporate governance reforms will help to ensure that businesses act ethically and responsibly. Some of these reforms include increasing transparency, board independence, and shareholder rights. Corporate America also needs to adopt codes of conduct and set up compliance programs to ensure that employees are acting ethically.
Adopting these reforms will help Corporate America regain the trust of the American people. Corporate America must realize that the public is watching and judging its actions. Businesses need to be more responsible and ethical in their practices in order to win back the trust of the American people.
Technology has made it easier for businesses to be transparent and accountable for their actions. In today’s world, businesses cannot afford to be unethical. The public is watching and companies will be held accountable for their actions. Businesses need to adopt sound ethical practices in order to succeed in today’s business world.