Corporate Governance and Ethics PDF

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Corporate Governance
and Ethics

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In today’s competitive business world, the intensity of competition has increased
substantially between organisations. Many times, the management of companies rely on
unethical and immoral way to generate a competitive advantage in the industry. These
incidents highlight the importance of corporate governance and business ethics in
companies. Corporate governance policies are a set of rules, policies and procedures which
guide and control the operations of a company (Harlalka, 2012). These policies assist
companies in making a balance between the interests of their stakeholders. The senior
executive officers in a company play a crucial role in ensuring that they comply with ethical
and corporate governance policies while taking business decisions (Solomon, 2016). They
have to implement a Code of Ethics in the business to continuously monitor its operations in
order to avoid unethical practices. The purpose of this essay is to outline the Code of Ethics
(Value statement) of a start-up software company based in Germany called Cosmos Pvt Ltd.
This essay will evaluate various factors which are included in the Code of Ethics of the
company to ensure that the management conducts their operations in ethical manner.
Lastly, as the CEO of the company, various actions will be evaluation to ensure the
implementation and monitoring of the code of ethics.
A Code of Ethics is referred to a guide in the organisation which contains principles that are
designed to assist professionals in conducting the business honestly and with integrity. This
document outlines the mission and values of the company to understand how professionals
are supposed to approach business issues and challenges (Davidson and Stevens, 2012). This
document is an overview of the ethical principles and core values of the organisation based
on which its management makes business decisions. It is an ‘ethical code’ which
encompasses principles from different areas such as business ethics, employee code of
conduct and a code of professional practice. The senior-level executives of a company are
responsible for preparing the code of ethics of the company. With the popularity of
corporate governance policies, the importance of outlining a code of ethics has become a
significant part of businesses (Solomon, 2016). It is also the case with start-ups which have
just started their operations. Start-ups face competition from large enterprises along with
small businesses, it requires the managerial personnel to ensure that they choose ethical
ways to manage the operations of the company. In Germany, the government encourage

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companies to adopt a code of ethics and comply with the same in order to ethically manage
their operations.
The code of ethics or value statement of Cosmos Pvt Ltd focuses on embracing diversity in
the workplace and encouraging its members to maintain highest standards while
discharging their duties. Integrity is a key element which is central to protecting the
reputation of corporations (Soltani and Maupetit, 2015). The value statement of Cosmos
focuses on giving back to the community in which the company serves. All the members of
the start-up dedicate one day in a month to give back to the community by working with
local charities and volunteering. The start-up is honest and transparent towards its
stakeholders. The company focuses on protecting the data of its clients who use its software
and maintain transparency to ensure that relevant factual information is received by them
within appropriate timeframe. Another key element is that the company focuses on
protecting the sensitive information of its customers and employees. All the sensitive data
of clients and employees are stored with high security, and utmost care is taken by the
executives to ensure that this data is not accessible to third parties. The value statement
highlights the effective communication between the start-up and its members to ensure
that they are able to disclose their issues to the management. In Germany, authorities
impose fines around €100 million and in many cases more on companies if they engage in
corruption-related activities (Lexology, 2018). Corruption investigations have become
frequent in Germany due to which the company has implemented these policies to avoid
corruption in its operations and promote integrity.
Continuous and timely disclosures are a key part of the value statement of corporations in
which the start-up reveals information regarding the actions taken by the management
towards maintaining balance between its stakeholders (Chapple and Truong, 2015). The
start-up discloses information regarding conflicts of interest which affects its stakeholders.
The company has also committed to treating others with respect. It is important that the
company must have mutual respect towards its stakeholders in order to understand their
issues and implement appropriate policies to address them. Treading others with respect
include encouraging diversity in the workplace. German legal system recognises gender
equality as a fundamental right based on which discrimination in the workplace for reasons
such as religion, age, disability, sexual orientation, gender or race is considered a crime.