Corporate Governance and Ethics

This document discusses the importance of corporate governance and ethics in achieving organizational success. It explores the concepts of legal compliance and ethical practices in corporate governance, highlighting their impact on corporate responsibilities. The document also provides insights into the Australian corporate governance system and its influence on organizational practices.

Title: Corporate Governance and Ethics

Table of Contents
Introduction................................................................................................................................2
Rebuttal......................................................................................................................................3
Conclusion..................................................................................................................................8
Reference List............................................................................................................................9
1

Introduction
Student 1: Corporate governance refers to the system of practices, process and rules by
which an organization is controlled and directed. In relation to such context, the unit aims to
provide an understanding of effective legal governance of corporate that is needed to achieve
organizational success.
Student 2: The significance of the ethical practices and its related concept will also be
discussed under corporate governance. Along with the concentrating on the essential
compliance of the legal governance of corporate, related application and arguments will also
be provided in context to ethical governance of the organization or corporation to achieve
potential and display corporate responsibilities ultimately.
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Rebuttal
Student 1: Corporate Governance consequently offers the system to attain the organizational
objective, form an effective action plan, measure performance through internal control,
corporate disclosure and encompass practically every management sphere. It past few years,
corporate governance has taken an increasingly major role in the Australian business
contexts. Mees & Smith (2019) discussed that in the realization of strong profile organization
collapses, and the backdrop against worldwide crisis has lead companies, shareholders and
government to actively advocate the establishment of the latest governance system. The
governance of the corporate has noted to be developed in Australia under iterative manner.
On the contrary, several parts of the organization are embracing an evaluated form of
corporate governance in the nation particularly that is principle-based or constituted under
legal compliance. Most of organization irrespective of the sector they operate in often
undertakes governance of their corporate activities and business practices through a specific
set of policies and resolution related to legal governance compliance. The board of directors
in a corporate are pivotal in authority and have a large implication for equity evaluation. Beck
& Paton (2018) argued that in respect to potentially operating under legal compliance,
corporate entities need to be based on the premise that managers, directors and staffs conduct
themselves in best attention of shareholders or owners. The shareholder’s interest that often
overlaps with the manager's interest needs adequate attention to ultimately maximize
shareholder’s wealth. Appuhami & Bhuyan (2015) added that the legal governance of
corporate produces high influences on corporate responsibilities. The process indulges
interaction between several participants like organizational management, the board of
directors and shareholders that helps to shape the company's performance and directing way
towards it. In order to achieve good governance of corporate in the respective marketplace,
the relationship between managers and owners in the company need to be healthy with
eliminated conflicts between them. As legal organization governance noted to impact
positively on share prices, it would be important for owners to track an individual’s
performance that is essential to be in accordance with standard performance. In a modified
corporation, the task and function of managers and owners if clearly outlined than
harmonised noted to influence efficient and sound company’s operations. Apart from
enforcing the healthier relationship between potential shareholders and corporate, on the
contrary compliance with legal governance allows the organization to function in a way that
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finance providers get fair investment returns. Desai (2016) argued that even though good
governance of organization under legal compliance protects it from being at a questionable
position, the corporate need to control bad governance. The corporate that often fails to
collaborate its business practices with regulatory compliances effectively may cast doubt on
the organization's integrity, obligation and reliabilities to their potential shareholders. The
ASIC or Australian, Securities and Investment Commission, is an important business
regulatory agency. Similarly, Corporation Act 2001 has been observed to be crucial
legislation in Australia that regulates the organization. The respective law outlines
operational guidelines for businesses in Australia (Wenig & Lanzer, 2019). In compliance
with respective law corporate needs to register itself and depict their related information to
the public in the nation. Such activities observed to impacts corporate governance in a
transparent manner by focusing on balanced and strong economic developments. Schooley
(2019) explained that the legal governance of corporate often deals determining direction and
guideline to undertake significant strategic decisions. It can be deduced that corporate
governance influences organization responsibility to contribute towards the development of
added values to the potential shareholders.
The companies in the Australian nation through maintaining transparency can make sure that
the stakeholder’s interests are safeguarded. In other words, such activities would guide
corporate wishing to progressively operate their business in the marketplace to ensure that
every shareholder exercises their rights at full potential along with organization recognizing
their rights completely. García-Sánchez, Cuadrado-Ballesteros & Frias-Aceituno (2016)
opined that corporate governance under legal compliance influences the broader functional
scope, where company require collaborating their institutional aspects with social factors to
implement trustworthy, ethical and moral environment ultimately. The legal governance of
the corporate in Australia influences corporate to undertake principle-based approach
responsibly and consider certain laws that might impose personal liability on remuneration
reporting needs and directors responsibility under the Corporation Act. The corporate require
to responsibility act under corporate governance legislation, or else organization may find
itself in questionable position under taxation law, occupational safety and health along with
environmental and trade practices laws (Kashyap et al. 2019). The AICD or Australian
Institutes of Company Director as principle stakeholder body, actively lobbied state and the
federal government to reduce obligation imposing personal liabilities on directors on the basis
that over-obligation may thrust director’s concentration far from business opportunities,
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strategies and on compliance problems (Williams, 2019). In case directors or other
responsible authority fails to govern business under legal obligation, proceeding might also
be brought by multiple parties like creditor, shareholders, trustee and insolvency
administration in bankruptcy. Langford (2016) supported that under corporate regulatory
governance, organization owner, director or related authority engaged in operational and
functional activities of business have the responsibility to pay attention to criminal conduct in
the respective workplace. The act of undertaking corporate operation responsibility through
adequate decision-making that is taken in favour of society and environment would
contribute to something that staffs are passionate about with ultimately improving success
and engagements. Griffith (2015) added that ethics and corporate governance under legal
compliance are collaborated part of business operation. Ethic has been a branch of philosophy
and mentioned as normative science due to its concern with human conduct norms. In order
words, ethics have been the conception of wrong or right behaviours that define the choice of
action are morally right. In contrast to corporate governance under regulatory aspects, where
rules and policies are focused on achieving the prime objective of organization success and
profitability, ethical principles influence the responsibility of corporate to resolve
multifaceted moral dilemmas. Ethical compliance enforces corporate to be accountable to
their actions in reaching a trade-off between pursuing social obligations and economic
objectives.
Student 2: In ethical governance, the corporate would have the responsibility to develop their
trust with shareholders by upholding it fruitfully to achieve a good reputation and higher
profitability. It can be deduced that corporate in the Australian market practising businesses
under ethical consideration would allow it to acknowledge safety, environment and health
standards. In the context of the ethical principle, the corporate would have a responsibility to
protect the fundamental rights of workers or staffs at the workplace. Davies (2016) discussed
that ethical practices consider under corporate governance widely influence corporate
responsibilities. Corporate needs to be indulge in reliable and trustful advertising along with
strictly adhering to product safety standards to have an ethical code of conduct in the
organization. Ethics in corporate governance would imply a responsibility to operate the
business in a way that fulfils organizational and societal interest. García-Sánchez, Rodríguez-
Domínguez & Frías-Aceituno (2015) supported that trust that is a variable indicator of ethics
leads to efficiency and predictability of the business. In reference to such aspects, to ethically
govern corporate trust in consumer relationships, suppliers and staffs relationships would be
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significant. It can be noted that ethical decision under corporate governance benefits
organization to keep workforce satisfied, achieve high sales, less breach of corporate
legislation that may hamper brand image, gain high goodwill and attract more consumers. In
order to achieve such objective that leads towards successful and reputed business in the
marketplace, corporate responsibilities are influenced. It would be important for corporate to
meet every obligation, commitment timely; encourage open, free rivalry along with
eliminating fraudulent practices. The acceptance of a new idea and encouraging feedback
from both customer as well as staffs would help the organization to encounter loopholes that
are an obstruction in the organizational success. Şahin (2018) argued that accepting a bribe,
forcing a person to go against the personal will and misusing official position is certain
unethical corporate governance. The existence of such illegal practices may lead to a conflict
of interest between organization and individual acting unethically. As a result, the
organization may encounter hampered business growth, development and brand image in the
marketplace. The elimination of unfair treatment or discriminating individuals on the basis of
gender, age, nationality, religion and race should be the responsibility of corporate in context
to ethical compliance. The corporate code of conduct needs to be in aligning with practices
that encourage diversity and equality at the workplace. Carroll (2017) added that maintaining
proprietary record and confidentiality of private data collected by the company entitles to the
ethical principle of corporate governance. The company have responsibilities to discourage
corruption, hoarding and black marketing. The business or corporate ethics does not only
talk about healthier and productive workplaces practice but focus on accountability from
corporate associates and clients. All the strategic decision in a corporate are influenced in
reference to moral consequences. The objective of ethical compliance in corporate
governance is to protect stakeholder interest and act under social accountability. In order to
accomplish such, the procedures and policies of the organization need to be updated on a
daily basis. It would lead the organization to meet the changing customer needs actively and
socially.
In Australia, there is a certain corporate governance system that intends to offer a reference
guide to organizations about their governance practices and structures. The ASX or
Australian Securities Exchange, which was formed in the year 2002, has been a market
operator, clearing overseas and house compliances with their operating regulation (Mees &
Smith, 2019). It functions to promote governance standards by corporate across Australia’s
listed organizations along with serving to instruct retail investors. On the contrary, legal
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compliance of corporate governance mainly focused on the structure of working with a clear
guideline of business practices without breach of any legislative rules. The ethical aspects of
compliance under corporate governance influence the responsibility for sustainable growth.
The corporate governance principle in Australia outlines actions towards responsible and
ethical decision-making. The organizational responsibilities are influenced, where it is
mandatory for corporate to implement a policy regarding diversity and disclose policy. The
policy needs to involve a requirement for the management or the board to implement
measurable objective to accomplish gender diversity (Mees & Smith, 2019). Under ethical
compliance, it would be the responsibility of the corporate to disclose all its annual reports
the measurable objectives for accomplishing diversity at the workplace under diversity
policy.
Student 1: It can be understood that legal compliance under corporate governance often
influences corporate responsibility. It especially refers to the way accountability and power
flow between the board of director, shareholders, senior manager and CEOs. These all
individuals in establishing good organizational governance play an important role, where they
undertake ethical practices to minimise risk, corruption, mismanagement and wastage. Such
activities ultimately help towards brand development, its efficient formation and
organizational management in a way that best fit the interest of all.
Student 2: On the other hand, ethical compliance in context to corporate governance refers to
conducting trade as per self-acknowledged ethical and moral standards. Ethical corporate
require to be formed over the principle of fairness, treat everyone equal at the workplace and
ultimately meeting stakeholder needs. It can be deduced that even though legal compliance in
corporate governance is mandatory to operate without obstruction in the marketplace. Ethical
consideration encourages corporate responsibility to take business decisions or produce
related products in favour of the well-being of society as well as the company. The
organization responsive towards the betterment of the environment and social quality of life
would have better developed and well-flourishing community to gain high profitability and
sustainability of the business.
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Conclusion
Student 1: In relation to the study provided in the unit, it is concluded that legal business
governance compliance is important for efficient business practices in which interest of every
stakeholder are met to maintain the productivity of the company. It is noted to be insufficient
to guarantee corporate responsibilities.
Student 2: On the other hand, consideration of ethical organization governance compliance
observed to maximize reputation of corporate that take responsible business decision. As
many corporate aims to develop their brand image in the eye of potential customers and
ultimately achieve higher sustainability of the business in the competitive market, it
contributes to greater influence on corporate responsibility.
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Reference List
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Carroll, A.B., 2017. The moral leader: Essential for successful corporate citizenship.
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Mees, B. and Smith, S.A., 2019. Corporate governance reform in Australia: a new
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