Corporate Governance and Ethical Issues: A Case Study of GAMCO Investors, Inc.

This report provides a brief understanding of corporate governance and its ethical issues. It further explains these topics with regards to GAMCO Investors, Inc. The report covers the importance of corporate governance, ethical aspects of corporate governance, and the connection between ethics and corporate governance. The report also highlights the ethical issues faced by GAMCO Investors, Inc. in terms of financial reporting, asset misapplication, and lack of full disclosure.

Task Summative
Assessment 1 Report

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK...............................................................................................................................................3
Discussion about corporate governance and related ethical issues .......................................3
The corporate governance structure of GAMCO Investors, Inc............................................5
Ethical issues with regards to GAMCO Investors..................................................................6
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................8
Books and Journals.................................................................................................................8
Online.....................................................................................................................................8

INTRODUCTION
The corporate governance plays a key role in an organization’s success. Through
corporate governance, the company can directly control its financial condition. Corporate
governance describes the role the board of directors play and the value of the company. It is the
legal part of the listed companies. It has wider impact in non-listed companies because it
improves the accountability and transparency of existing system. It involves the interest of
various person such as stakeholder, top level management, debtors, suppliers and governments.
Ethical issues in commercial enterprise arise whilst a selection or situation conflicts with the
business enterprise's ethical standards. Both establishments and people can be worried about
moral issues on the grounds that others might also query their actions from ethical viewpoint.
Ethical conflicts may arise the risk for a company. Some ethical issues that are faced by the
company are wrong accounting, data security, technology misuse. These issues sometimes
become dangerous and harms the company situations (Beauchaine and et.al, 2018). This report
contains the details of Gamco Investors, Inc. that is located across the United states with its
headquarters in Rye, New York. The company provides investment advisory and brokerage
services to various institutions and selected investors. The code of ethics of Gamco company is
applicable to all investors and other entities member. It describes the highest ethical standard of
Gamco Investors, Inc. Further this report discusses the corporate governance of that company.
TASK
Discussion about corporate governance and related ethical issues
Corporate governance is a very important part of the way businesses are run. It is defined
as the way to direct or control businesses. It is concerned about the work of the board which has
to take the ultimate responsibility for business. How the board is constituted and the role defined
for the board is explained by the Governance. It is about dealing with the issues related to board
composition, its structure, the framework for the board's accountability to its stakeholders. It
concerns about the delegation of authorities by the board for management throughout the
organisation (Bouraoui, and et.al, 2018).
There are five ethical aspects of corporate governance: Board behaviours, its structures &
processes, the purpose, strategy & vision for the business, values & standards and structures &

procedures for oversight & control. The members of the board perform their duties in a process
which reflects ethical values like integrity, fairness, respect and honesty. The board structure
facilitates ethical behaviours and avoid unethical ones. It ensures proper accountability, for
example, the composition, committees, procedures for decision making. The purpose for the
business is set by the board. The core values of business is reflected by the strategic decisions.
The standards tell the way business has to be done and its role in society. The implementation of
standards of behaviour is ensured by the board. Procedures of delegation and management are
beneficial for ethical business practice (Brueckner and et.al, 2018. pp.217-226).
Avoiding abuse of the powers or improper actions undertaken which could result in
debatable behaviours and practices within organisations is important. This is ensured by the
awareness of ethical issues in the field of corporate governance. According to this view point, in
corporate governance, it becomes the important issue to share control among different persons
that a company structure and environment comprise of. Some examples for how is corporate
governance related to ethical issues are remuneration, accountability of stakeholders, diversity,
conflicts of interest and transparency.
In this manner, the connection among ethics and company governance humanizes the
exercising of strength and renders it extra obvious and credible now no longer best to the
shareholders, however additionally to stakeholders in general (clients, employees, suppliers,
exchange unions, NGOs, many more). An ever growing quantity of retail and institutional buyers
are trying to comprise social and environmental standards into their funding choices. Simply
earning money isn't sufficient for those social or moral buyers—they need to do properly even as
doing well. Ethical behaviour in governance is described in the manner wherein an organization's
stakeholders try to control collective movement from the attitude and in the majority interest, for
this reason keeping off adverse behaviour (which include fraud, non-public enrichment, insider
trading, corruption, doubtful behaviour) and through a higher control of the power and duties of
the organization's managers. In the place of governance, therefore, ethics targets at elevating
consciousness of the others rights and general needs, through enforcing a few ideas of minimal
requirement (Doni and et.al, 2019). From this viewpoint, ethical governance ought to be visible
as a system of shared and obvious governance which seeks to set up the overall frameworks and
tips for managers of huge companies, through implementing the values of transparency, duty and
professionalism.

For this reason, a more potent link among ethics and governance has to make contributions to
assist the organization's stakeholders to behave, of their choices and actions, in a manner that is
acceptable, affordable and in conformity with given values of reference. Defining those values
need to decide what is ideal in phrases of respecting and improving the situations of the
distinctive stakeholders who work with the organization, or the institution (Panigrahi and et.al,
2018). It is then important to translate those values into ethical policies, laws, regulations,
policies of behaviour or organization charters. This considerably entails understanding the way
to exercising one's duties, understanding what the crucial values are, understanding which of
them need to be included and defended and understanding which rights and duties need to be
shared; it additionally entails understanding, whilst needed, what the first-class practices are and
understanding which sanctions to have in place in the occasion of noncompliance. Such
questions need to open the manner to strength sharing, that is, to a manner of operating
collectively wherein stakeholders experience accountable now no longer best for his or her work,
however additionally for the sound functioning of the company. In this manner, they could
estimate and reveal whether or not the goals and the vital stakes of the company are pursued
(Saona and et.al, 2020. pp.98-133).
The corporate governance structure of GAMCO Investors, Inc.
These Corporate Governance Guidelines were followed through the Board of Directors of
GAMCO Investors, Inc. in reference to its oversight of company's control and commercial
enterprise affairs. These Corporate Governance Guidelines are not meant to interpret any law,
regulation, rule, or the constitution files of GAMCO. The Board's number one intention is to
work out its commercial enterprise judgment in a way it fairly believes to be in the best interest
of the company and its stockholders. In its efforts to attain this intention, the Board controls
company's performance. The Board additionally strives to make sure that controls are in place to
guarantee that company's control and personnel perform in a lawful and ethically accountable
way. GAMCO's control is accountable to conduct GAMCO's business enterprise and affairs
below the Board's oversight.
The directors are accountable for exercise care, loyalty and proper faith, performing in a
way they fairly agree is within the best pursuits of company and its stockholders and in a way
regular with their fiduciary duties. In pleasing their responsibilities, directors might also
additionally ask such questions and behaviour such investigations as they deem appropriate, and

might fairly depend on the statistics furnished to them through company's senior executives and
its outdoor advisors and auditors. The directors will be entitled to get hold of the advantages of
indemnification and exculpation to the fullest volume authorized through law, company's
constitution and through-legal guidelines and any indemnification agreements, as relevant.
The non-management administrators (i.e., directors who are not company officers) will meet
one at a time without control in normal government sessions. The "independent" administrators
as described within the "Independence Rules" will meet as a minimum as soon as a year in
government session (Schaltegger and et.al, 2018. pp.241-259).
The form and amount of director repayment could be decided through the Compensation
Committee according with the rules and ideas set forth in its constitution, and the Compensation
Committee will conduct an annual assessment of director repayment.
The Board, with the help of the Corporate Governance Committee, shall conduct an annual self-
assessment to decide whether or not the Board and its committees are functioning efficiently.
The complete Board will speak the assessment to decide what action, if any, may want to
enhance Board and committee performance. The Board, with the help of the Committee of
corporate governance, shall timely assess those Corporate Governance Guidelines to decide
whether or not any adjustments are appropriate (Stern, P.J., 2019).
These Corporate Governance Guidelines are meant as an aspect of the bendy framework
inside which the Board, assisted through its committees, directs the affairs of GAMCO. While
they must be interpreted within the context of relevant legal guidelines, policies and list
requirements, and within the context of the company's Certificate of Incorporation and By-Laws,
they are not meant to set up through their very own people any legally binding obligations.
Ethical issues with regards to GAMCO Investors
Ethical issue is a situation in which battle originate and must be conveyed. It is related to
or dealing with morals. In other words, it tells about what is right or wrong in conduct. In context
to the annual report of Gamco Investor attached to this report, there are many ethical issues as
they are the providers of services like investment advisory and brokerage work to mutual fund
and high worthy investors. There are major ethical issues that are developed in Gamco investor
are listed below:
Financial reporting is deceiving as since the last few decades there is financial scandals which
became area of attractiveness. Gamco investor's management is intentionally embezzlement

money of their investor and showing company share price to be counterfeit. The main ethical
issues of fraudulent activities are fictitious sales, modification of income by misstatement entries
and premature revenue recognition. Asset misapplication is one of the significant ethical issues
in which company's staff affects by their morale and reputation. Gamco company made assets
fraud by misleading in maintaining accounts and issuing bogus invoices and documents. On the
other hand, financial reporting information is also not ethical as they are unverified or sometime
they show huge debts in the balance sheet which implies that they are lack in providing full
disclosure to show investor amount deficiency (Stone Sweet and et.al, 2018). One of the ethical
issue is that companies maintains accounts on the basis of historical data which signifies that
financial statements does not reflecting the true position of the assets. Gamco company has
restricted value that to be predicted which means accounts are prepared on previous performance
and indicates that investors less predict the company situation.
CONCLUSION
This report provides a brief understanding of corporate governance and its ethical issues.
It further explains these topics with regards to GAMCO Investors. To the future of any
corporation, any failure in corporate governance can be a real threat. Companies can have
competitive edge in captivating and retaining talent and generating positive reactions in the
market. If a company has a reputation in today's market for ethical behaviour, it brings about not
only customer loyalty but also employees loyalty. By adopting a set of applicable principles and
best practices, an effective corporate governance can be achieved. In order to survive and grow,
company must make a profit but within its ethical bounds. Mechanisms of ethical compliance
creates stability and growth since it engenders confidence, leadership and administration. These
are essentially ethical tasks.

REFERENCES
Books and Journals
Beauchaine and et.al, 2018. Neurobiological mechanisms of psychopathology and treatment
action.
Bouraoui, and et.al, 2018. Corporate social responsibility and employees’ affective commitment:
A multiple mediation model. Management Decision.
Brueckner and et.al, 2018. Pinning down the social license to operate (SLO): The problem of
normative complexity. Resources Policy, 59. pp.217-226.
Doni and et.al, 2019. Voluntary versus mandatory non-financial disclosure: EU Directive
95/2014 and sustainability reporting practices based on empirical evidence from
Italy. Meditari Accountancy Research.
Panigrahi and et.al, 2018. Sustainable supply chain management: A review of literature and
implications for future research. Management of Environmental Quality: An International
Journal.
Saona and et.al, 2020. How do the ownership structure and board of directors' features impact
earnings management? The Spanish case. Journal of International Financial Management
& Accounting, 31(1). pp.98-133.
Schaltegger and et.al, 2018. Business cases and corporate engagement with sustainability:
Differentiating ethical motivations. Journal of Business Ethics, 147(2). pp.241-259.
Stern, P.J., 2019. English East India Company-State and The Modern Corporation: the google of
its time?
Stone Sweet and et.al, 2018. A cosmopolitan legal order: Kant, constitutional Justice, and the
European Convention on Human Rights.
Online
https://gab-corporate-filings.s3.us-east-2.amazonaws.com/GBLAnnualReport2021.pdf