Assignment on Business Ethics & Corporate Governance

Added on - 28 May 2020

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Corporate Governance & EthicsContentsExecutive Summary.........................................................................................................................3Introduction.....................................................................................................................................4Ethical Theories................................................................................................................................5Application of Ethical Theories........................................................................................................9Conclusion......................................................................................................................................12References.....................................................................................................................................14Page2
Corporate Governance & EthicsExecutive SummaryRunning a business is not an easy task and in order to do so there is a need to follow theethical policies and principles. This is because ethics guide in making the right decision from thewrong decision. The executives of the company are given the role of moral agents where theyhave to undertake the decisions and run the affairs of the company based on policies drawn forthe stakeholders, which include the society at large, the employees and the investors of thecompany. WorldCom is famous for its accounting blunder, where the financial position of thecompany was wrongly presented and the investors were misled into believing that the financialposition of the company was sound. The reality was stark different and due to this, thecompany became a known blunder. In channelling this blunder was a key role of BernardEbbers and that of Bernard Madoff. The following parts analyse their role and the immorality oftheir actions, resulting in the moral agents of WorldCom being unethical.Page3
Corporate Governance & EthicsIntroductionThe moral principle through which the individuals conduct any activity and throughwhich their behaviour is governed is what ethics are all about. It is basically the branch ofknowledge dealing with the moral principles. The term ethics has been derived from AncientGreek and means custom/ habit. As inferred from the literal translation, it is the habits and thecustoms of a person which leads to their ethics, as the same gets shaped according to theenvironment in which they live and based on their notions about any and all things. Inbusinesses also, the ethics play a crucial role as the businesses follow their own set of ethics.These ethics are derived from the role played by the moral agents in running the operations ofthe business, where their personal ethics translate into the ethics followed by the firm(Jennings, 2008).The moral agents are such people who play the role of being the company executivesand they undertake the decisions based on the needs of the different stakeholders, essentiallyfor whom the business operates. The decisions taken by the moral agent, naturally thus, havean impact over the stakeholders, which could be both positive and negative (Ferrell, Fraedrich& Ferrell, 2016). In undertaking such decisions, particularly where the decision is difficult, theleading ethical theories can be applied, as they guide the moral agents on their duties incontext of the ethics propagated by such theories. This discussion is focused on highlightingthis very aspect, where the ethical theories can be made use of by the moral agents. In doingPage4
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