Professional Ethics and Corporate Governance in Contemporary Organizations

This essay proposes to find different aspects related to professional ethics and corporate governance to compare and contrast the opinions regarding aforementioned topic and its relevancy to contemporary organisations. The essay explores the significance of spiritual commitments, ethical behaviour, and virtues in contemporary workplaces and how they are inter-related. It also discusses the importance of corporate governance in establishing responsible behaviour among organisations leaders. The essay concludes on agreeing upon practical and professional approach for maintaining ethics in businesses.

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Professional Ethics
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Essay
Business ethics is an is a kind of pragmatic ethics which examines moral principles or
ethical issues that takes place within business environment. It is applicable in every aspect of
business conduct where the range of ethical issues reflects the amount to which business is
professed to be in odds with social and non-economic values (Amakobe, 2016). Issues in
business ethics and conflicts along with successes revolves around relationship building
where effective relationship edifice has become primary concern for most of the
contemporary organisations (Ferrell, Fraedrich, & Ferrell, 2014). This essay proposes to find
different aspects related to professional ethics and corporate governance to compare and
contrast the opinions regarding aforementioned topic and its relevancy to contemporary
organisations.
Spiritual leadership intrinsically motivates and inspire employees through faith and
vision of service provided to key stakeholders along with setting a corporate culture
according to the values of altruistic love for producing highly motivated, productive and
committed workforce. The spiritual commitments tap to the core needs of both employees as
well as leader’s well-being to create a value congruence and vision across the empowered
teams and organisational level. These further fosters higher performance level, organisational
commitment, social responsibility and financial outcomes- triple bottom line (Jr, Gabreil, &
Vanquez, 2018). However, Ferrell, et al. (2014) puts in front more practical approach to
ethics in business. Moral, according to the authors are personal philosophy regarding what is
wrong and what is right. The authors pinpoints that although moral views can be used while
taking business ethical decisions, principles act as a pervasive boundary under which
behaviour must not be violated thereby defining ethics as a behaviour within groups value.

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The significance of spiritual commitments is acquiring a considerable position in
contemporary workplaces and as an emerging concept in business management. Present
literature believes that “spiritual” do not always means “religious”. Agbim, Ayatse &
Oriarewo (2013) accepts that unethical business practices within business circle is gaining
much attention in government and academia. Most of the ethical codes of conduct, code of
practice and punitive measures are being applied to control the menace. Nevertheless, the
authors argue that despite the fact that spiritual commitments influence people choices and
assumptions with others in a positive way, spirituality while making ethical decisions is not
been explored by present business sufficiently. Therefore, the current practices indicate that
spiritual values, ethical behaviour, and virtues are inter-related to some extent. On contrary,
today’s firms believe in formal systems of control and accountability of ethical as well as
responsible behaviour, also known as corporate governance (Pless & Maak, 2011). Adda,
Azigwe & Awuni (2016) further ascertains that while business ethics includes moral
obligations and behavioural guidance, corporate governance proves to be an integrative
management concept that establishes responsible behaviour among organisations leaders.
Under the theory of corporate governance, board of directors or the leaders of
organisation provides over sightedness for taking critical decisions like ethical decision
related to relationship with stakeholders, risk management, internal control and executive
compensation. Thereby making ethical leadership associated with corporate governance.
Indeed, this statement can be proven by cases seen in present organisations which leads the
marketplace due to ethical stances seen in their ethical business decisions along with
corporate responsibility (Ferrell, Fraedrich, & Ferrell, 2014). Even Adda, et al. (2016)
supports the above viewpoint and adds further that ethical behaviour in business along with
corporate social responsibility can bring critical benefits to the businesses. The notion behind
businesses having social responsibility than making profits only for its stakeholders has been

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evolving around since past few decades. This can be due to the reason behind firms taking
accountability as a significant part in corporate governance. Accountability states how closely
workplace decisions are aligned to firm’s strategic direction and compliance with legal and
ethical considerations (Ferrell, Fraedrich, & Ferrell, 2014).
Similar viewpoint is shared by Singh & Singh (2013) where the authors state that,
moral statement may assert particular action of certain manner that may be professional or
unprofessional, making distinctions between bad and good characters or ethical assumptions.
However, in the context of professional ethics and professionalism, business enterprises do
hold ethical and corporate responsibilities towards society, including economic mission
gaining and creating value for stakeholders. Thus, Fry & Egel (2015) calls for spiritual
leadership after recognising change in professional and personal lives of business leaders.
The authors agree that integration of spiritual commitments with organisational decisions
may lead to positive changes along with workplace effectiveness. There are few evidences
that shows spiritual programs not only leads to beneficial outcomes like commitment and job
satisfaction, but also shows workplace productivity and reduced absenteeism. Employee who
are spiritually committed and remains influenced due to moral commitments show fearless
attitude and more ethical stances while following directions for future growth. Most
significantly, the organisational efficiency is the emerging concept within research and
spiritual decisions made for complying business ethics may result in bringing competitive
advantage for the firms (Agbim, Ayatse, & Oriarewo, 2013).
Ethical decision and misconduct that damages stakeholders, impact organisations
reputation in terms of consumer confidence and investors. As their decision and perception
begins taking the toll, overall value of the firm drops thereby exposing firms to consumer
criticism and increased damages (Ferrell, Fraedrich, & Ferrell, 2014). Therefore, Fryer (2015)
underpins ethics theory for contemporary workplaces to capture any arising complex

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phenomenon. The three-generation topology given by the author gives the starting point for
exploring few rights that needs to be considered by today’s organisations. On the contrary,
Ferrell, et al. (2014) believes that many organisations decisions are influenced by
stakeholders and any consequent damages stemming out of ethical misconduct and economic
disruptions are more difficult to overcome than overcoming any financial performance.
Moreover, stakeholders are negatively affected by corresponding shifts in perceptions of
organisation’s reputation. The authors do not neglect negative publicity influences and
reveals that to maintain confidence and trust of stakeholders, top level management are
expected to behave ethically and in transparent manner, providing any deceptive information
to stakeholders.
In literature, personal spiritual leadership models are been discussed extensively by
researchers as it forms a theoretical basis that shows leaders with the path towards spiritual
and moral deepening and practical implementation in both personal as well as in
organisational context. However, personal spiritual leadership focuses majorly on inner life
rather than combining creation of hope and trust to gain others commitment (Fry & Egel,
2015). Hence, more practical approach to business ethics needs to be applied especially in
organisational context. Since contemporary organisations have to face various forms of
ethical dilemmas each day, they need to focus more upon corporate governance and strategic
performance measurements to maximise triple bottom line. Modern workplaces give more
stress to enhanced business models like planning compensation for goal achievement,
accountability and transparency, enhancing shareholders relations, risk management and
ethical programs that validates their consideration for employee well-being and corporate
responsibility (Ferrell, Fraedrich, & Ferrell, 2014).
The above essay indicates that modern businesses requires more practical approach
for managing ethical dilemmas and misconduct pertaining to everyday business activities.

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Though, current literature emphasises on spiritual commitments and moral consideration to
influence decision, directions and implicit assumptions, it can also be noted that practical
understanding of professional ethics is also significant. Business ethics are nothing but
implementation of ethics in professional practice that proves businesses can be ethical and
still become profit earning. Thus, more and more organisations show interest in application of
ethical practices while carrying business dealing and motivating workforce. This paper
concludes on agreeing upon practical and professional approach for maintaining ethics in
businesses. Spiritual and religious approach can be considered somehow, but ethical codes
and code of conduct seems to be more practical solution that can help organisations in
aligning their business activities equally within each organisational level thereby giving
moral support to employees for performing ethically.

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References
Singh, K. T., & Singh, M. S. (2013). Ethics in Corporate Social Responsibility. Journal of
Business and Management, 09(02), 16-21.
Adda, G., Azigwe, J. B., & Awuni, A. R. (2016). Business Ethics and Corporate Social
Responsibility For Business Success And Growth. European Journal of Business and
Innovation Research, 04(06), 26-42.
Agbim, K. C., Ayatse, F. A., & Oriarewo, G. O. (2013). Spirituality, Ethical Behaviour and
Ethical Business: The Impact of Relatedness. Journal of Business Management &
Social Sciences Research, 76-86.
Amakobe, D. F. (2016). Business Ethics. Retrieved from
https://www.researchgate.net/publication/308926602_Business_Ethics
Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2014). Business Ethics (10th ed.). US: Stamford,
CT : Cengage Learning.
Fry, L. W., & Egel, E. (2015). What Is Spiritual Leadership? Retrieved from
https://iispiritualleadership.com/spiritual-leadership/
Fryer, M. (2015). Ethics Theory and Business Practice. Great Britain: SAGE Publications
Ltd.
Jr, F. H., Gabreil, M. L., & Vanquez, D. A. (2018). Triple bottom line and sustainable
performance measurement in industrial companies. Revista de Gestão, 25(04), 413-
425.
Pless, N. M., & Maak, T. (2011). Responsible Leadership: Pathways to the Future. Journal of
Business Ethics, 98(01), 3-13.

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