Corporate Governance: Ethics, Stakeholders, and Conflicts

This paper provides a comprehensive overview of the ethics of corporate governance. It begins by defining corporate governance and emphasizing the importance of ethical conduct in information transfer among shareholders, directors, and managers. The discussion covers key features of corporate governance, including administrative structures, the role of the CEO, and the significance of ethical codes. The paper explores corporate citizenship, stakeholder relationships, and potential conflicts of interest. It highlights the importance of business ethics, including truthfulness and trust, and examines the roles of internal and external stakeholders. The paper concludes by emphasizing the need for transparency, disclosure, and adherence to ethical principles to maintain positive stakeholder relationships and ensure the long-term success of a corporation. The paper also addresses the importance of business ethics and how to maintain the relationship with stakeholders.

Running head: ETHICS OF CORPORATE GOVERNANCE
Ethics of Corporate Governance
Name of the student:
Name of the University:
Author Note:

1
ETHICS OF CORPORATE GOVERNANCE
Executive summary
The paper discusses about the different points of ethics that is consistent in corporate governance
and the points of differences and implication of them in the real life. It elaborates on the different
structure or the key contents of corporate governance. It further elaborates and explains that it is
true that ethics is a vital proportion of the corporate governance of a firm.

2
ETHICS OF CORPORATE GOVERNANCE
Contents
Executive summary.........................................................................................................................1
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
The key features of corporate governance...................................................................................4
Corporate Citizenship..................................................................................................................5
Importance of Business Ethics.....................................................................................................8
STAKEHOLDERS IN ORGANISATION......................................................................................9
How to maintain relationship with Stakeholders.......................................................................10
Reasons for Conflict of Interests among Stakeholders..............................................................11
Conclusion.....................................................................................................................................12
References......................................................................................................................................14

3
ETHICS OF CORPORATE GOVERNANCE
Introduction
. The term corporate governance can be defined as the processes or more specifically the
policies with the help of which the corporation is well governed. The flow of power as well
accountability passes from one to the other such as the share holders the board of directors And
the concerned managers of the corporation. On this transfer of information the running of the
corporation associated to the interested parties depend, this is the reason why a ethical code of
conduct should be maintained such that there remains on discrepancy in the transfer of
information. The corporate Governance undergoes certain rules and regulation with a proper
code of ethics that has been discussed in this paper. The paper discusses about the ethics of the
corporate governance.
Discussion
The essential administrative structure that generally incorporated in most of the
corporation, firstly, the favorable vote that the investors provide and as a consequence get
engaged . Secondly, the duty of the directorate which is to pay special attention on the investors’
interest is given importance based on the ethics. A CEO is appointed who is responsible for all
decision of the boar in the management, this CEO set up communication among the internal and
external users of accounting information with the organization itself. There are a several range of
standards that is inclusive of strategies which are different from each other and maintain the
standard of great administration. These help in the building up of the ways to actualize the power
and the responsibility (Coffee Jr, and Palia 2016). There will be interior standards, for instance
(somewhat dictated by significant corporate law), about how board races are to be completed.

4
ETHICS OF CORPORATE GOVERNANCE
There are furthermore management regulations that are relevant to possessions like the
deliberation of outside, "free” executives among the board of director in the management.
To an expert of finance, administrative work may seem to be a matter that should be
given the most importance as the matter is related to the financial aspects of the company. it is
unnecessary to implement resources into an organization which is ineffectively represented.
Administration has certain legal bindings which makes it a very law full issue. Enron was the
most important case of administration that is of poor quality works on terribly distressing clients
who wants to invest and the more extensively open. At the present time it could be likely look to
a couple of major budgetary organizations for protest lessons in the evil impacts of awful
administration.
The key features of corporate governance
Direction of the measures of corporate Governance
Regularity is provided to the business firm, the essential bit of the corporation is the
companies’ specialists and pioneers. Creating a settlement on the most important decisions and
discussing present and stress in the future of the association are innovative methods of this
portion. Association mission and vision that originate from the organization part of business.
These declarations give a sentiment reason and outline basic aims in the association's business
works out.
Supervision as a part of Corporate Governance

5
ETHICS OF CORPORATE GOVERNANCE
In the organization that is openly claimed for instances screening of the organization and
the choices of the CEO’s are assessed along with those of the other officials of the company. The
pioneers of the company guarantee the advantages of the clients investing and also the concern
of all other partners. The organizations that are small in size control the organization such that all
work is not tumbled on one individual. If the company works on the same way without a
overseeing board then the above situation is held as the violation of the ethics of the company
(McCahery, Sautner and Starks 2016).
Relation with the stake holders of a corporation
Administration in a corporation envelopes’ responsibility to the companies partners and
owners ( share holders). On the basis of the customers it is seen that that the relation with the
customers are very important as they are the one who runs the business. On ethical grounds it is
seen that if there is a honest and truthful relation between the customer and the user of
accounting information then there is a smoothness in the management of the organization as this
maintained ethics in the corporate level attracts more number of clients which is good for the
business as well the stake holders related to the business. Clients move to those corporate
governance that follow the ethical code of conduct.
Theory of Corporate Citizenship
One more important expansion in the time 21st century is long-drawn-out in the spotlight
on corporate citizenship. Business organizations that are generally incorporate a corporate
citizenship declaration on corporate management or economic professional relative website
pages, such type of articulations communicate the company aim to proceed with communal and
environmental duty (Kraakman and Hansmann 2017). Openhandedness of spirit and other

6
ETHICS OF CORPORATE GOVERNANCE
beneficent promises are among basic things noted inside corporate citizenship proclamations. .
When all the formalities are completed, mindfulness is noticed in the organizations, then an
should adjustment of benefit creating exercises with dependable strategies and practices should
be incorporated. Corporate administration is the arrangement of tenets, practices and procedures
by which an institution is synchronized and restricted. Corporate Governance generally includes
adjusting the benefits of the frequent associates in an association, and these integrate their client
that invests on the company, management, patrons, people who provide, agents, group and the
government where the association is operational (Rodriguez-Dominguez, Gallego-Alvarez and
Garcia-Sanchez 2016).
In limit sense, Corporate Governance manages expanding the investors riches, and in more
extensive forthcoming, it thinks about the welfare of the all partners and the general public.
Corporate Governance additionally gives the structure to accomplishing an organization's
goals, and it incorporates essentially every circle of administration from activity designs and
inward controls to execution estimation and corporate exposure.
1. Following are the angles which ought to be secured by Management of
any association in its Corporate Governance Policy:
2. Treatment of equity and shareholders right: Each Organization
should regard the privileges of investors and should enable them to
practice their rights appropriately, straightforwardly and successfully. .
There ought to be an appropriate correspondence by association
expecting to support investors' rights.
3. Stakeholders: Associations should settle their responsibilities. lawful,
legally binding, social, and market driven obligations, for investors

7
ETHICS OF CORPORATE GOVERNANCE
including different partners, for example, financial specialists, workers,
leasers, clients, providers, neighborhood groups and arrangement
creators.
4. Directors role and responsibility: The leading body of any
association ought to be comprehensive of appropriate and adequate
administration abilities, instructive capabilities and comprehension to
survey of arrangements and difficulties of administration execution.
Moreover, there ought to be a legitimate and proper duty (Armstrong et
al.,2015).
5. Behavioral ethics and integrity: Uprightness is the critical factor of
progress for any of the associations. Honesty is the crucial prerequisite
of association, corporate officers and board individuals who are
required to take after the guideline of trustworthiness. Each
Organization ought to build up its set of accepted rules for its workers,
officials executives and promoters, individually (Stout and Blair 2017).
6. To be transparent and disclose the matter: Organizations should
follow the principles of transparency and disclosure for the best
interest of organizational stake holders. Transparency and disclosure
are the responsibilities of board and management of organization. This
function provides accountability to stakeholders.
ETHICS
Good and bad conduct helps in elucidating the ethics of an organization, characterizing
for us when our activities are moral and when are unethical along these lines, in this manner,
morals which is at the core of the administration of the corporation and there must be a reflection
of the activities on a worldwide scale of the administration of the corporate.
Management assumes a key part in forming the eventual fate of any association as the
ideal use of all assets pivots upon the viability of the administration (García-Sánchez, Rodríguez-
Domínguez and Frías-Aceituno 2015.). The center of an effective administration lies in its

8
ETHICS OF CORPORATE GOVERNANCE
Clarity of Vision, Plan of Action and all the more imperatively Execution of the Plan of Action –
the genuine extent of tasks in a manner of speaking, and it is here that the significance of
Corporate Governance and Ethics appears.
Business Ethics
Business is the craftsmanship and continuous application of moral standards to give the
impression of being at and give details multifaceted high-quality quandaries. A business is
thought to be moral just in the event that it tries to achieve an exchange off between seeking after
monetary target and its social commitments.
Ethical thoughts are joined with creation of trust enhancing its productivity as a result the
organization twists profitably and keep up great unsavory reputation. Put reserve in prompted
steadiness and efficiency of the business organiosation.
Importance of Business Ethics
The variable that is the most important to understand ethics is
truthfulness. There are mainly three dimensions of ethics, namely, trust in
provider relationship, confide in client relationship and representative
relationship.
• If any association is keeping up relationship of trust with their partners,
at that point we say that the organization is a moral organization.

9
ETHICS OF CORPORATE GOVERNANCE
• Tata Steel, Boeing, Ford and J&J are the associations which take after
the rule of business morals in this way the associations are top in their
fragment.
There must be solid corporate administration strategies to control over
dishonest issues and exercises. Following things are have to stop to
increment moral estimation of any association:
 Pay off
 The companies Coercion
 Trading that is insider in nature
 Conflicts based on the interests of the users of accounts.
 Discrimination including unfair means.
 Gifts and political donations that are paid.
 Presentation of insufficient returns of payments and also articulations
of those returns.
 Benefit acquired by unfair practices.
Stakeholders in Organization
Influence is noticed on partners when they become close to (adversely
or decidedly) by outcomes ant consequences of activities, undertaking or
program. These partners of a company can be categorized under 2 heads
(Bondy, Matten and Moon 2014):
Internal Stakeholders: The internal stake holders are those who are
benefitted from the business at an internal level and internal business (For
instance, Directors, Shareholders, Employees and Managers and so forth.)
External Stakeholders: The activities of any financial institution can be
influenced by the external stake holders (for instance, the Customers,
Financial Groups, Special Interest Groups, Suppliers, Pressure Group,

10
ETHICS OF CORPORATE GOVERNANCE
Competitors, Business Support Group, Government, extremist gatherings
and business bolster gatherings and media)
How to maintain relationship with Stakeholders:
Trust and Communication are the establishing stone to make perfect relationship among
partners. Through viable correspondence and trust any association can keep up culminate
relationship among different inner and outer partners.
Each association ought to guarantee that every one of the partners are including in its
basic leadership process. Along these lines, we can state that building and keeping up a long haul
association with partners depends on two basic rule i.e. correspondence and trust.
Administration of any association ought to do following things for
Stakeholders Relationship:
• To empower partners investment in the basic leadership process
• To give convenient data to Stakeholders
• To speak with genuineness
• To listen partner concerns

11
ETHICS OF CORPORATE GOVERNANCE
• To regard differing supposition
• To find commonly helpful arrangement
• To gain from each other
Conflicts may arise as follows:
Struggle between partners gatherings
• Conflict between partners gatherings, though one is a customer
• Companies interests may clashes with its partners
Reasons for Conflict of Interests among Stakeholders:
Diverse partners accompany distinctive requests, and if, any of those
requests isn't fulfilled, at that point this will emerge clashes:
• Board needs more benefit so board may cut staff advantage benefits
now clashes emerges amongst association and its representatives (Canary and
Jennings 2018).
• Supplier needs full item cost on time.

12
ETHICS OF CORPORATE GOVERNANCE
• Shareholders may get baffled of overpaid compensation payable to top
administration. Besides, investors may contend for rate of appropriation of
profits or benefit, and furthermore workers may need better advantages or
wages (Van Tulder and Kolk 2011).
• Government needs more income through Direct/Indirect expense.
• Local Community needs reservation in openings for work gave by an
association.
• Investors need immense benefit or best capital profit for contributed
cash.
• Customer needs fantastic items at moderate costs.
So these are the purposes behind clashes among different partners, and if any of the partners isn't
fulfilled because of administrations got that may prompt clashes.
Conclusion
It can be concluded after analyzing the different ethical concern of the corporate
governance that it is essentially is concerned about the fulfillment of rights of the share holders
and the other stake holders of the business firm. This is inclusive of the ethical amount of being
transparent on applying the standard of discloser. Motivation has been put forward by the resent
happening financial crisis and failure in the corporate world to accelerate the publishing of

13
ETHICS OF CORPORATE GOVERNANCE
corporate world to accelerate the publishing of corporate governance code of conduct. The day to
day decision making also depends upon the codes of conduct which is related to ethical behavior.
There are a number of benefits, when adhered to the ethical values, few of such benefits that are
obtained includes the development of managerial behavior, motivating employees in a positive
manner, the reputation of the organization is also protected, it also aims at improving the
different relationships in business with due respect to the laws and regulations. All the above
attributes are generally seen in the corporation’s culture all together that is rules standards values
and beliefs.

14
ETHICS OF CORPORATE GOVERNANCE
References
Armstrong, C.S., Blouin, J.L., Jagolinzer, A.D. and Larcker, D.F., 2015. Corporate governance,
incentives, and tax avoidance. Journal of Accounting and Economics, 60(1), pp.1-17.
Bondy, K., Matten, D. and Moon, J., 2014. The adoption of voluntary codes of conduct in
MNCs: A three‐country comparative study. Business and Society Review, 109(4), pp.449-477.
Canary, H.E. and Jennings, M.M., 2018. Principles and influence in codes of ethics: A centering
resonance analysis comparing pre-and post-Sarbanes-Oxley codes of ethics. Journal of Business
Ethics, 80(2), pp.263-278.
Coffee Jr, J.C. and Palia, D., 2016. The wolf at the door: The impact of hedge fund activism on
corporate governance. Annals of Corporate Governance, 1(1), pp.1-94.
García-Sánchez, I.M., Rodríguez-Domínguez, L. and Frías-Aceituno, J.V., 2015. Board of
directors and ethics codes in different corporate governance systems. Journal of business
ethics, 131(3), pp.681-698.
Kraakman, R. and Hansmann, H., 2017. The end of history for corporate law. In Corporate
Governance (pp. 49-78). Gower.
McCahery, J.A., Sautner, Z. and Starks, L.T., 2016. Behind the scenes: The corporate
governance preferences of institutional investors. The Journal of Finance, 71(6), pp.2905-2932.
Rodriguez-Dominguez, L., Gallego-Alvarez, I. and Garcia-Sanchez, I.M., 2016. Corporate
governance and codes of ethics. Journal of Business Ethics, 90(2), p.187.

15
ETHICS OF CORPORATE GOVERNANCE
Samra, E., 2016. Corporate governance in Islamic financial institutions.
Stout, L.A. and Blair, M.M., 2017. A team production theory of corporate law. In Corporate
Governance (pp. 169-250). Gower.
Van Tulder, R. and Kolk, A., 2011. Multinationality and corporate ethics: Codes of conduct in
the sporting goods industry. Journal of International Business Studies, 32(2), pp.267-283.