Corporate Governance: An Analysis of Theories, Ethics and Practices

This essay delves into the multifaceted realm of corporate governance, exploring its fundamental principles, theoretical underpinnings, and practical applications. It begins by defining corporate governance and elucidating its significance in regulating company conduct and behavior, emphasizing the roles of directors and shareholders. The essay then discusses various theories, including agency, stakeholder, transaction cost, political, stewardship, and resource dependency theories, providing insights into their core concepts and implications for organizational management. Furthermore, it examines the ethical dimensions of corporate governance, focusing on ethical leadership, code of conduct, and the alignment of corporate governance structures with corporate social responsibility. The paper highlights the importance of board composition, legal aspects, and the duties of directors in fostering effective governance. In essence, the essay provides a comprehensive overview of corporate governance, aiming to promote transparency, accountability, and responsible business practices.

Running head: CORPORATE GOVERNANCE
CORPORATE GOVERNANCE
Name of the Student
Name of the University
Author Note

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Introduction
Corporate Governance are the basic rules and guidelines which are laid down in a
company that is regulated by the directors of the company. The rules that have been made in
order to regulate the conduct and behavior of the individuals who are a part of the company those
rules are governed under Corporate Governance. In a company or any kind of corporation or
organization the management of the company needs to be regulated and therefore, there needs to
be an authority in the company who can regulate the management of the company. Therefore,
Corporate Governance is considered to be the process or that method by which the management
and the operations of a company are governed. The board of directors in a company are
appointed to manage and regulate the company and to carry out activities in a company which
would help the company in acquiring or obtaining the benefits. Therefore, the rules and
regulations that have been imposed on the company in order to govern the management of the
company is considered to be the method of corporate governance (Knudsen, Moon and Slager
2015). The shareholders of a company are considered to be the ones who invest in the shares of a
company and they appoint the directors in order to regulate the managing of the company. The
directors have certain duties regarding the company they are appointed into. They should be able
to work accordingly which would benefit the company but the benefits which are to be acquired
or obtained should not be in any dishonest way. The directors are appointed by the shareholders
of the company at times to carry out their self-interests in the country that would benefit the
shareholders as well as the company (Steger 2015).
This paper discusses the various aspects of corporate governance and the ethical behavior
of the individuals in a company. It discusses the various duties the directors have and the
composition of the board members in a company and the regulation which is to be done in the

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company and try to use those aspects. It would discuss the several principles and theories which
are related to corporate governance and try to implement them with the companies. It would
discuss the legal aspects of the corporate governance code and the significance of it. This paper
would then move towards discussing the ethical leadership and its significance, the integrity of it
in a company in compliance with the rules and regulations in a company. It also discusses about
the code of conduct in the company where the importance would also be discussed. In this paper
it tries to align the corporate governance structure with the corporate social responsibility. It
concludes by summarizing the discussion that was made in the paper and the outcome would be
laid down in conclusion.
Discussion
Corporate Governance is the method or the procedure in which the performance of any
company or organization is considered to be evaluated and regulated. In a corporate governance
structure the connection between the directors the shareholders and the management of the
company is looked after as they are the determining factors in an organization that would
determine the functioning and the operations of the company. Therefore, the connection between
these three factors are significant as they are considered to be the regulating the performance in
executing and implementing the working of the organization. The shareholders are considered to
be the people who have purchased the shares of the company and who would have the voting
rights in the company or the organization. The shareholders enjoy the power to vote in the
decision-making of the company and they appoint the Board of Directors in the company. The
Board of Directors act in accordance to the shareholders of the company and they have the
authority to regulate and govern in the matters which are related to the functioning of the
company (David Duffy 2019). The directors work in order to achieve or obtain any kind of

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benefits which the company would be able to accrue. It is upon the directors to function in a way
that would help the company benefit as an organization and therefore which would obtain profits
for the company.
Corporate governance is considered to be a process which would help an organization to
take strategic decisions which would be productive for that organization and it would be
effective. There are various significance or benefits if the process of corporate governance is
considered to be taken into consideration. The corporate governance structure helps in
safeguarding economic growth in a company and it assists in helping the company to grow
economically. The corporate governance structure tries to maintain the confidence of the
investors and tries to raise capital of a company or a corporation in order to grow as a business
(Camilleri 2015). A good structure of corporate governance helps in raising funds for the
company that would help the company as the share capital of that organization would rise and
therefore, this would boost the economy of the country. The good structure of corporate
governance assists the organization in raising funds or capital of that organization or corporation
which would help the company economically and motivate the employees of the company to
work towards achieving the best possible interests in the company (Haxhi and Aguilera 2015).
The corporate governance structure also effects the share price of an organization mostly
in a positive way. In this structure there are proper authorities given to the people and specific
duties and responsibilities provided to the individuals which would help the company or the
organization to work in a positive way and achieve the targets that are supposed to be achieved
in a positive manner. The corporate governance also considers to minimize the risk management
issue and provides for better safety procedures in a company or an organization. It also aims to
reduce the waste management in a corporation and tries to provide environmentally safe

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measures that would not be hampering the environment. Therefore, corporate governance
benefits an organization by assisting them towards achieving a better goal.
Various Theories of Corporate Governance
There are various theories in the corporate governance which can be implemented by
organizations in order to improve the work efficiency in the corporations. There are the agency
theory, the stakeholder theory, the transaction cost theory, political theory, stewardship theory
and lastly, the resource dependency theory. These theories are discussed in detail below.
 The Agency Theory: This theory discusses the relationship that is prevalent between an
agent and the principal and such a relationship is considered to be significant. An agent is
a person or an individual who is considered to work for the principal and to keep the
interests of the principal in mind. In an organization or a company the principal is
considered to be the shareholders of that organization who hold the shares of that
particular corporation they appoint the directors and the managers in an organization
which means that the directors or the managers of the organization work as agents of the
shareholders in that particular organization. The agents are considered to work in such a
manner which would benefit the organization as well as the shareholders of that
organization. The most distinctive characteristic of this specific theory is considered to be
that of the control and ownership. The ownership is that of the shareholders of the
company who invests and holds the shares in the corporation. The control of the
management is on the agents which are the directors and the managers of the
organization. Therefore, this is considered to be a distinct feature or characteristic of this
particular theory. The transparency and the accountability of the work are on the
management and the employees of that company.

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 The Stakeholder Theory: It discusses the accountability of the management and the
directors of the company to that of the stakeholders of the organization. This particular
theory focuses on the management decisions of the organization or the company. The
managers of a company are considered to be responsible towards a lot of people who are
a part of the organization such as the employees or the workers of the organization, the
stakeholders of the company, to the board members, investors, suppliers and others.
Therefore, the responsibility of the management is considered to be huge and the decision
making of the company matters needs to be discussed by the management to the selected
authority. In order to maintain the transparency and the accountability of the management
to the other members of the company consist of the stakeholder theory which would
depict the accountability of the management towards the members of the organization.
 The Transaction Cost Theory: In an organization it can be understood that there are
several contractual agreements between parties and this also involves the cost of the
parties in the agreement. Therefore, the transaction which is carried out by the company
or the corporation in order to grow in the organization is the transaction and the cost is
the price or the amount in which the company tries to transact while being in the market.
Therefore, this is considered to be the transaction cost theory. If the price in the market is
higher then the organization tries to pay for the transaction which would take place.
 The Political Theory: The company gives their voting rights or powers to certain
politically influenced personnel which would assist them by achieving benefits. This
political influence is considered to be beneficial because it helps in allocating power and
authority to a corporation or a company and it gives certain privileges along with
benefits. Therefore, this theory deals with the political influence of a corporation.

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 The Stewardship Theory: This theory mentions and discusses that the stewards are
considered to maximize the wealth and the profits of a company or a corporation by
trying to increase the performance of the company or corporation. It tries to proliferate
the wealth by improving the working efficiency of the organization. This would create
profits and gains for the company and its respected share holders which would be better
for the economic growth of the corporation. Therefore, this theory aims to maximize the
profits of a corporation by enhancing the work performance of the individuals who are
working in the corporation (Madison, Holt, Kellermanns and Ranft 2016).
 The Resource Dependency Theory: In this theory the role of the Board of Directors are
considered to be pivotal in nature since they are the ones who try to bring the resources
which are essential for the corporation in order to increase the interests of the corporation
and to increase the growth of the corporation economically. The main purpose of the
directors in a corporation is to act in the interests of the corporation or the company.
Therefore, a company in order to function needs to be able to work in a way which would
benefit the economic growth of that corporation. Thus, resources are required in the
corporation which are the responsibilities of the directors working in that corporation.
Therefore, to gather resources that would help the company in attaining benefits for the
corporation is considered to be the focus area or the main concentration of the resource
dependency theory.
Therefore, from the above-mentioned theory it can be understood that in order for a
corporation or an organization grow there are various things that need to be kept in mind and
there are certain responsibilities to each of the members of the organization which needs to be
done in an effective way for the organization to benefit and grow economically. The theories

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which have been laid down if followed are considered to be beneficial for an organization since
it lays down the functions of the members who are working in the organization to function in a
way which would accrue benefits for the company and the corporation and therefore, it would
help and assist the corporation to grow economically and achieve the benefits and the privileges.
Thus, the structure of corporate governance is considered to be beneficial for a company or a
corporation since it assists the company to work in a way which would acquire benefits.
Corporate Governance and Management
Corporate Governance is considered to be a basic set of rules and guidelines which are
laid down for a company in order to govern the companies or the corporations which would
assist the companies in deriving any kind of benefits. The rules and guidelines are laid down for
all the corporations which are to be followed and the conduct and the working efficiency are
managed and governed by the directors of the company. There are policies and procedures which
are laid down in the company which needs to be followed in order for the company to work in an
efficient manner. Therefore, the policies and the rules are laid down to govern the company so
that the corporation in question can grow economically (Hopt 2015).
Management is considered to be the procedure in which the people who are a part of an
organization take actions which would make the company or that organization go in a positive
direction. It would help the corporation reach great heights which would pose as a positive
impact on the working of the organization. The management takes actions and imposes duties on
the employees of the organization in order to work in an effective manner which would help the
organization grow. There are management teams in a company. These teams are usually set up
when the founders of the organization or the directors are unable to manage the employees since
there are increased number of employees in the organization. The management teams are made

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to ensure the efficiency of the working in the corporation and to overlook the activities of those
individuals working in an organization in order to increase the economic growth of the
organization and to obtain benefits or profits in the company (Ferrero Ferrero and Ackrill 2016).
The Corporate Governance structure works along with the management in a company as
the policies and guidelines which are laid down in a company in order to be followed are carried
on or conducted by the leaders of that association or organization since the regulations are to be
implemented by the management of the company or the directors and the founders. Therefore,
the corporate governance structure along with the management of the company are considered
interlinked and they complement each other by carrying out the operations of a company in an
effective way (Tricker, R.B. and Tricker, R.I., 2015).
The Role of Board of Directors in an Organization and its Functions
The Leadership Role of the Board
The role of the Board of Directors in an organization are considered to be significant as
they regulate the functioning of a company and manages the operations of the organization. The
Board of Directors are considered to be appointed by the shareholders or the shareowners of an
organization in order to carry out the functions of the company. The shareholders appoint the
directors in an organization to act on behalf of these shareowners and try to obtain and acquire
benefits for the corporation. The directors act as agents for these shareowners in the company
and they carry out the functions of the corporation on behalf of the shareowners interest. The role
and the duty of the directors in an organization are considered to be acting in the interests of the
company and to acquire interests which would be best suitable for the company. Therefore, the
directors have to work in accordance with the interests of the company and should not keep its

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main focus on the interests of the shareowners of that corporation. The shareholders who have
their own self-interest appoint the directors and these directors act as the agents of such
shareholders which have been mentioned in the Agency Theory. The directors even though act as
agents of the shareholders concentrate on acquiring benefits for the company and the self-interest
of the corporation is given utmost importance and not the self-interest of the shareholders.
The Board of Directors in a corporation are considered to be liable and responsible for
their actions. They are accountable to the several shareholders who are a part of the corporation.
The Annual General Meeting is held where the directors have to present with several reports
whereby the condition of the operations of the company are evaluated and assessed which helps
in maintain transparency and accountability. If the company faces any kind of difficulty then the
directors of the company would be liable to the shareholders of the company and they are
answerable for their actions in the company. In that meeting the directors would also submit
themselves in order for them to be re-elected and remain being a part of the Board. The policies
and procedures which regulate and govern the company are considered to be laid down in the
Articles of Association of the company. The purpose or the objectives of a corporation are
considered to be laid down in the Memorandum of Association. The main purpose of the Board
is to manage and regulate the functions of the corporation collectively and to carry out the
activities which would ensure the interests of the corporation as well as the interests of the
shareholders and the investors of the company.
Appointment of the Directors in a Board
The shareholders of the company do the selection of the directors in a board mostly and
they have the power to remove a director from the board if they please. The Board however,
have the power to appoint a director but the power of removal of the director rests with the

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shareholders of the corporation. The removal of the director can happen by a vote by majority of
the shareowners of the corporation and a special procedure has to be followed. The procedure is
considered to be difficult and complex and it cannot happen or occur without any legal advice.
Chairperson of the Board
The chairperson of the Board is considered to be the chief director of the company. The
Board consisting of the directors in a corporation enjoys the power to appoint any person within
them to be the chairperson of that corporation and they decide how long the chairperson of that
corporation is to hold the office for that post. The chairperson of the corporation enjoys the
power of casting a second vote if there is no equality among the members of the corporation to
come to a conclusion as such. The deciding vote would be that of the chairperson of the
corporation’s only if the rules and regulations which have been laid down for the corporation
states such a power to the chairperson. The policies which have been laid down as rules for a
corporation usually gives the Board of Directors the power to remove a chairperson from the
Board if the actions of the chairperson effect the functioning of the company. The role of a
chairperson in the Board is to act as a guiding authority for the Board of Directors and to manage
the functions of the directors in the company. It also looks after the Board composition and the
structure of the Board And tries to manage the duties and responsibilities of the Board along with
the other members of the Board which would help the Board to function in an effective manner.
It also organizes and coordinates the meetings of the committee and conducts those meetings in
an effective manner. The chairperson in an organization is considered to be the leader of the
Board and should look after the needs of the members associated with the organization.

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Role of the Directors in a Board
The Directors are appointed by the shareholders of a company in order to look after the
matters and affairs of a corporation thus their role in a company or any corporation is essential.
They have the responsibility to work or manage the working of a company in such a way that it
would make the company obtain profits and create a favorable position for the shareholders in
the company. The directors of the company should work in such a way that would be beneficial
for the organization but they have to work in an honest way and should not misuse the powers
which are vested on them and neither should they abuse their powers and responsibilities by
using their position in the company. The directors should carry out their work in the company in
a proper way with a proper purpose. They should not act in a way which would hamper the
company and should not work dishonestly. They should work in good faith. The directors of the
company has the responsibility to act in a way which would prevent the company from running
in losses or incurring the losses which would effect the functioning of a company. They should
prevent the organization from being insolvent. The directors at times are considered to be
responsible or liable for the debts that have been incurred by the company which means that the
directors are responsible for the debts and they owe a duty towards the company in acquiring to
dissolve those debts if they are considered to be personally liable and therefore, if the directors
are unable to pay for the debts which have been incurred by the company to the creditors of those
companies then the company would become insolvent and the liquidation process of the
company are going to be initiated and processed because of such insolvency of the organization.
The directors in an organization are also considered to be acting in interests of the
workers or the employees of the organization. Therefore, the directors need to be able to consider
the needs of the employees in a company and try to respect it and help the employees in need. In

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order for the company to function effectively, the employees should also be considered to be a
significant part of the organization since they are the ones who work for the company and carry
out the functions of the company in an effective manner. Therefore, the directors have the
responsibilities, which determines the working of the organization, and thus the responsibilities
that are given to the directors of an organization are considered to be crucial.
Role of the Non-Executive Directors
There has been no such distinction between the executive directors of the company along
with the non-executive directors of the company. The executive directors of a company are
considered to concentrate on the intimate functions that are related to the company or the
corporation whereas, the non-executive director of the company concentrates on the wider and
more broader functions of the corporation.
Responsibilities of the Board
The Board in an organization includes to understand the purpose and objectives of the
organization and to ensure that the purpose of the organization being carried out effectively. It
tries to implement strategies and new techniques which would benefit the company and try to
understand the strength and weakness of the company and work in order to improve it. Delegate
the functions to the authorities which would review and assess whether the implementation of the
strategies in the company are taking place whereby improving the conditions of the organization.
It should maintain transparency and accountability to the shareowners of the organization by
conducting meetings which would review the progress of the company and include several new
approaches which can be implemented in order to acquire the best suitable interests in the
company or the corporation. It should also try to promote goodwill among the investors and the
shareholders which would create a positive work approach in the company.

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Board Diversity
In the corporate governance structure the companies have certain policies which are laid
down in the organization which are to be followed by the employees and the members of the
organization. In an organization there are different kinds of employees or individuals who
become a part of the organization in different ways. It is necessary to maintain rules for each of
those members in the company as they have to abide by it and function in an effective manner.
There are diversity in the Board where several kinds of representatives form a part of the
organization and the Directors need to cater to their interests accordingly.
The Financial aspect in a Board looks over the matters which relate to the accounts and
finance in the company. They are accountable to the Board on matters related to finance in the
company. The Board of Directors have the authority to audit and inspect the book keeping and
the records in the company and the representatives would be accountable for the proper
functioning of the organization.
The Legal aspect of the company are considered to cater towards the needs of the legal
constitution of that organization and would mainly concentrate on the legal framework of the
company and try to build contractual agreements with the different suppliers or other individuals
who would want to be associated with the company and would take care of the legal relations of
the company or the corporation.
The Cultural aspect of an organization would take care of the cultural aspects of the
organization and would try to increase the productivity of the company by using methods which
would motivate the employees to work more and take any other initiatives which would boost
the economy of the organization.

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The employees of an organization are considered to be a significant factor of an
organization as the employees determine the working conditions of the organization. Therefore,
the employees have to abide by certain rules and regulations in a company as they need to
maintain minimum decorum in a company and try to act in a way which would not ruin the
reputation of the organization.
Health and safety of the members of a corporation are considered to be an essential factor
since the members or the employees who work in a corporation are considered to be the driving
force of the organization and therefore, it is considered to be their basic rights to be ensured
safety in an organization which would mean that they need to work in a condition which would
be safe and sound and their would be no harm which would be caused to the individuals in the
work place.
The risk management should be assessed and it needs to be dealt with in the organization.
In times of emergency or any kind of risks or health factors there needs to be an emergency
procedure where the staff in that corporation needs to be given proper training which would be
useful in times when there has been any kind of risks pertaining to an employee’s life and proper
care should be given which would ensure the safety of the individuals in the organization. The
emergency procedures in times of risks or any kind of hazards caused should be appropriate
which would ensure the safety of the individuals associated with the organization.
If there are any kind of difficulties faced by the employees while working in a
corporation the issues or the difficulties which are being faced can be discussed with the Human
Resource Team in a company as they would help or assist in resolving those issues and try to
make the environment better by coming up with new techniques which would encourage the
employees to function in an effective manner.

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The role of the Internal Committee regarding Board meetings and Positive Risk-taking
The Internal Committee in an organization would carry out the functions which would be
in order for the betterment of the organization. There are several meetings held by the Board in a
company with respect to the presence of the shareholders of the organization where the progress
of the company is discussed. It also tries to come up with new techniques which would bring a
positive change in the company along with ensuring benefits to the organization. Therefore, the
reviews and the progress of the company is taken into consideration. It also tries to take positive
risks which would ensure profits in a company by taking those risks which would be beneficial
for the well-being of the organization and the individuals who are associated with it.
The Role of the External Committee regarding Accountability and Transparency
The organization has various sections of work and each of those sections need to be
governed and regulated. The suppliers of the organization have to abide by certain rules than that
of the rules which are laid down for the employees of the company since they are considered to
be external sources of the organization who are associated with the organization. The books of
accounts and other records that are considered to be kept should be evaluated and assessed as
they form the evidence of the working of the organization. There should be auditing and
inspection of the records which are maintained in an organization and should be reviewed
thoroughly which would create a transparency among the members of the organization and it
would ensure transparency and accountability in the organization as the members would be
considered to be answerable for their actions in an organization.
Evaluation of its own role
The UK Corporate Governance Code focuses on the leadership role of the Board in an
organization where it states that there is a necessity of division of powers and the responsibilities

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along with them since an individual should not be having unfettered powers and the Board needs
to be collectively responsible for the operations which are carried on in a company or any
corporation. It also talks about the effectiveness of the Board and the members associated with
the organization. It discusses that every member should have due skill care and diligence which
would help in carrying out the functions of the company or the corporation in an effective
manner. There should be a balanced approach and fair and just way where the progress of the
company should be evaluated and the members of the organization should be accountable to each
other and transparency should be maintained. The remunerations that are to be given to the
members of the company are considered to be determining the long-term success of the
employees in the organization and the success of the functioning of the company. Relationship
with the shareholders needs to be transparent and there should be a mutual understanding
between the directors and the shareholders of a corporation which would help in maintaining the
balance in the organization and would ensure growth of the company.
The Corporate Governance in the European Union mainly focuses on trying to improve
and develop corporate transparency, it also concentrates on protecting the rights of the
shareholders of the company or the corporation. It also tries to ensure the effectiveness of the
Board and tries to improve the functioning of the company. It develops the stewardship theory
while maintain and engaging with the shareholders of the corporation. The Green paper was in
relation to the corporate governance structure and it helped in improving and developing legal
harmonization by initiating special regulatory enforcements like for instance the Transparency
Directive, which was in the year 2004, and the Shareholders Rights Directive in the year 2007. It
also tried to incorporate the recommendations relating to the effectiveness of the Board and the

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remuneration. This Green Paper initiative was considered to be an intellectual foundation for the
succeeding Green Papers on European corporate Governance.
The Cadbury report was set up in order to discuss the role of the directors in a board, it
also discussed about the role of the non-executive directors in a corporation and addressing the
issues of the remuneration policies along with the financial controls and reporting in a company.
Corporate Governance structure tries to ensure that the company or any corporation has
been governed and is continuing to work in an effective manner which would bring best suitable
interests for the corporation and to the members who are associated with it. The directors are
considered to have a pivotal role in the working of an organization as the director would be able
to regulate the functioning of the company in an effective manner. The directors are appointed by
the shareholders of the organization and they are considered to act as agents in the company
where the agents would cater to the needs and interests of the corporation and then the interests
of the shareholders and the investors of the company. There should be a progress report which
needs to be shared with the shareholders of the company in the meetings which would ensure
that there has been transparency and accountability which is being maintained by the members
working in the organization and therefore, the liability would be present among the members of
the organization. Thus, it can be understood that the regulations or guidelines which are laid
down for the members in an organization forms the corporate governance structure which needs
to be governed by the directors of that organization in order to carry out the functions and the
operations of the organization effectively.

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Ethical Leadership
It is the type of leadership where the ethical standards of an organization are set and
constituted which the employees have to abide by. It is the behavior which is used to maintain
the ethical standards of the corporation. There are certain guidelines or code of conduct that is
maintained in the organization that would be a given set of rules for every members who are
associated with the organization and they have to abide by it. In an organization the employees
are considered to play a significant role as they are the ones who carry out the functions of the
company and therefore, they determine the reputation of the organization in the society. Thus,
there are certain ethical standards and certain code of conduct which has been laid down in the
organization which are to be followed by the employees of the organization in order to maintain
the decorum of the organization. Thus, the ethical leaders who are a part of an organization tries
to set certain rules which needs to be followed by the individuals or the employees in the
organization in order to be associated with it (Shapiro and Stefkovich 2016).
Ethical Framework and various principles of Ethics
An organization can only function if there are various guidelines laid down and they are
followed and governed by the executives of a company or a corporation in an effective manner.
Therefore, there needs to be presence of rules and regulations and it needs to be governed by the
individuals who form a part of the organization in order to function in an effective manner. The
organization has its employees who needs to be governed and regulated since they determine the
reputation of the organization. Therefore, principles and rules in a company or a corporation are
an essential factor. Similarly, in order for an organization to operate in an effective manner
ethical frameworks need to be provided and implemented in an organization for the employees of
the organization since it is important to control the ethical behavior of the individuals who are

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working in the organization or who form a part of the organization or the corporation. The
ethical leaders in an organization are appointed in order to maintain and regulate the ethical
behavior of the individuals or the employees who form a part of the organization. The ethical
leaders of the organization supervises the employees and tries to govern the ethical standards
which have been laid down in the organization being followed by the members of the
organization or the employees of that particular corporation. The behavior of the individuals are
considered to be regulated or controlled as this would determine the morality of the individuals
and restrict the individual to commit any kind of offence for which the offender might be
indicted. Therefore, that is considered to be how the ethical behaviors of the individuals are
regulated or controlled which would help or assist the company or the corporation to work and
function effectively or in an effective manner (Lawton and Páez 2015).
The ethical values or the principles that govern the ethical behaviors of the individuals in
a company are considered to include:
 Honesty: A person or an individual should main honesty in an organization which means
that the employee should never try to be deceitful and carry on any kind of fraudulent
activity. The executives of a company or a corporation are considered to be ethical in
nature who would not succumb to any kind of deceit or any misrepresentation of facts or
give any kind of misleading information during the dealings which take place in the
company or the corporation.
 Trust-worthiness: The employees or the executives who are a part of an organization are
considered to be trust-worthy and they do not cause any kind of fraud or mis-
apprehension of facts. The dealings or the contractual agreements which are done by
them are considered to be true to its nature and they fulfil all the promises which have

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been laid down in the contract agreement and they do not cause any kind of deceit to the
other employee.
 Integrity: The employees or the executives who are considered to be a part of an
organization would maintain personal integrity. They would try to depict courage and try
to stand up for what is correct and ethical according to their perceptions even if there
would be other people or employees who would try to contradict. The executive or the
employee would not sacrifice their beliefs and ideas for what is wrong and hypocritical.
They would try to fight for their perceptions and beliefs.
 Fairness: The executives in an organization are considered to be fair and just and they
would not be prejudiced or biased towards the dealings in the corporation or the
organization. The employees or the executives of that organization are considered to be
fair and would not try to take any kind of interests in the dealings of the corporation or
the company and would try to maintain transparency at all times.
 Respect for Others: The executives of a company or the employees of a company are
considered to be respectful of other members who form a part of the company and the
employee or the executive would be respectful of the opinions and perceptions of the
other people who are associated with the company or the corporation. The respectfulness
of the individuals are considered to be an essential feature which needs to be followed by
the employees of a company.
 Loyalty: The executives or the employees of the organization are considered to be loyal
to the organization and the employees. They should not take advantage of the things or
matters discussed with them or information shared with them in confidence.

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 Concern for Others: The executives or the employees should be able assist and help
others while being a part of the organization and should not take due advantages of the
information which have been shared to them for any kind of personal benefit in the
organization (Chughtai, Byrne and Flood 2015).
The core competencies of Ethical Leadership
The ethical leaders are considered to set rules and regulations for ethical standards that
are to be followed by the individuals who form a part of the organization. The rules and
regulations that are laid down for the ethical standards are to regulate the ethical behaviors of the
individuals in an organization since ethics comprises a significant role in the society. There are a
few principles which needs to be followed by the employees of an organization or a corporation
which constitute the ethical behavior of the employees in the organization (Journal 2019).
Therefore, an employee should not try to cause any kind of deceit and should not try to be
involved in any kind of fraudulent activity which would mean that the employees of an
organization are not considered to act in any way which would be causing any kind of deceit
towards another individual or should not mis-represent any facts or mislead any information to
any other individual in order to gain undue advantage from the other individual which would
benefit the employee. An individual who is considered to be an employee of an organization or
corporation should maintain personal integrity. The integrity needs to be maintained and the
ethical leaders are considered to pave the way for ethical workplace relationships. The
individuals should not succumb to the wrongdoings of the others in case to blend in the
workplace and should always be able to stand up for their own beliefs. Thus, the ethical leaders
in an organization pave the way for the ethical standards that needs to be followed in an

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organization or the corporation for the people or the individuals who are considered to be a part
of the organization (Shin, et al., 2015).
Reputation and Transparency in an Organization
There are people or individuals who think that ethics is considered to something which is
a confidential affair between a person and the consciousness of such person. Any wrongdoing
done by an individual who is an employee of a company or organization is considered to be a
corporate misconduct because the wrongdoing effects the reputation of a company and an
individual working in a company would not be able to work and cause a misconduct if the
morality of the individual in the workplace was corrected. Therefore, corporate misconduct can
be understood and related to ethics in some way. The ethical behavior of a person is considered
to be important as that demonstrates the behavior of the organization the person or the individual
is working for. The ethical standards which are set in an organization consists of a code of
conduct which needs to be maintained by the individuals who are considered to be employees of
the company and would be able to subject themselves to those rules and regulations in order to
conduct an ethical behavior which would determine the ethical conduct of the employee. The
ethical standard is considered to be developed by the ethical leaders of the organization and they
would govern and regulate the behaviors of the individuals in order to carry out the activities of
proper conduct in the organization. The employees of an organization are considered to
determine the reputation of an organization where the reputation and the integrity of the
organization should not be questioned therefore, a set of rules and guidelines are constituted in
an organization or corporation which would assist the company in developing the goodwill of the
company by the behavior of the employees of the organization towards the people who are a part
of the society (Den Hartog 2015).

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The reputation and transparency of the organization are important factors as they
determine the goodwill of the organization which in turn effects the profits and resources which
can be available to the company or the corporation. The goodwill or recognition would influence
different investors in an organization to invest in the company and they would try to allocate
resources to the company which would benefit the organization and the people or individuals
working in the organization or the corporation at large and thus, would create a favorable
position in the market place and help the company or the corporation grow economically and
socially. Therefore, the ethical behaviors in a company or an organization are considered to be
important for an organization to prosper (Wu, et al., 2015).
Protection to the Whistle-Blower
Whistle-blower is considered to be a person who reports the activities which are
inappropriate or corrupted activities which relate to misconduct in a company. The whistle-
blowers tries to report the misconduct or the unethical behavior which has been taking place.
There are people who do not follow the ethical conduct of the organization and engages in any
kind of activities which are relating to corruption and they try to harm the company or the
corporation by using illegal activities as a shield to protect themselves from carrying out illegal
activities and taking undue advantage in a company or an organization. Therefore, the actions
which violate the ethical conducts of the company or the organization should be reported and the
consequences of such actions should be given which would prevent the person or the employee
who has conducted such an unethical behavior in a company or an organization to not repeat the
mistakes. The whistle-blower acts as a person who tries to prevent such corruptive and
inappropriate practices that are taking place in an organization and try to report it to the
management which would put a halt on these kind of activities from taking place further in the

24CORPORATE GOVERNANCE
organization and to maintain an ethical conduct by the people who are a part of the organization.
Therefore, the protection should be given to the whistle-blowers as the offenders may hamper the
lives of those individuals who had reported against them. The anonymity of the whistle-blowers
should be kept which would help the whistle-blowers, the offenders who are a part of that
organization would not be able to cause any kind of difficulty for the individual who reported
against the perpetrator, and thus, the ethical conduct of the organization would remain intact.
Corporate Social Responsibility in relation to Growth Strategy
The Corporate Social Responsibility is considered to be the responsibility which are
taken by the corporations or the organizations which would cause an impact to the society at
large. The corporations or the enterprises which are set up impacts the society at large as it
involves functioning of several aspects which would ensure the proper functioning and
operations of the company which would create an impact in the society. Therefore, when a
corporation is considered to be influential in this respect then it is supposed to cause or create an
impact in the society due to its functioning. Therefore, an enterprise or a corporation when they
are being constituted it needs to keep in mind several factors which would cause an impact to the
society and to the individuals living in the society. The corporation or the company constitutes
the functioning of various factors such as the purpose or the objectives need to be set which
would determine the aim of the company or the corporation (De Beelde and Tuybens 2015). It
needs to keep in mind the various factors associated with the environmental sustainability, the
business structure, the regulations which are to be laid down the external and the internal sources
of the organization and the target audience of the company or who are the target audience to
whom the company would cater to. Thus, these are some of the factors which needs to be kept in
mind in order to constitute and create a company. It also needs capital or investments in the form

25CORPORATE GOVERNANCE
of capital which would be used in order to create or constitute the company for which the
investors or the shareholders needs to be determined who would help or assist in raising the
capital and the funds for carrying out the business activity in a smooth and effective manner.
Another factor which needs to be taken into consideration would be the employees of the
company or the people who would be carrying out the functions of the company and in an
effective manner on whom the rules and regulations would be governed. Therefore, these are
some of the factors that need to be taken into consideration while constituting or setting up of a
company that would determine the impact or the effect it has on society. An individual who is a
part of the society gets effected and while constituting a company or a corporation the society’s
needs are to be met with as it effects or impacts the society at large. A corporation has certain
duties towards the society and it effects the growth of the corporation economically due to
availability of resources and other benefits or privileges which can be given to the corporation or
the enterprise. Therefore, the corporate social responsibility is considered to be significant for a
corporation since it determines and causes an impact or an effect on the society at large and
determines the fate of the company or the enterprise as it is considered to increase the economic
growth of the company or the enterprise. Therefore, corporate social responsibility is related to
the growth strategy of a company or an organization (Frynas and Stephens 2015).
Conclusion
Corporate Governance is considered to be the method in which the rules and regulations
which are laid down in a company or an organization are regulated by the authorities of the
company. The directors are considered to regulate the operations of the company. In a company
or any kind of corporation or organization the management of the company needs to be regulated
and therefore, there needs to be an authority in the company who can regulate the management

26CORPORATE GOVERNANCE
of the company. The shareholders of a company are considered to be the ones who invest in the
shares of a company and they appoint the directors in order to regulate the managing of the
company. The directors have certain duties regarding the company they are appointed into. They
should be able to work accordingly which would benefit the company but the benefits which are
to be acquired or obtained should not be in any dishonest way. The directors are appointed by the
shareholders of the company at times to carry out their self-interests in the country that would
benefit the shareholders as well as the company. Thus, it can be understood that the regulations
or guidelines which are laid down for the members in an organization forms the corporate
governance structure which needs to be governed by the directors of that organization in order to
carry out the functions and the operations of the organization effectively. On the other hand, the
concept of ethical leadership is considered to be the type of leadership where the ethical
standards of an organization are set and constituted which the employees have to abide by. It is
the behavior which is used to maintain the ethical standards of the corporation. There are certain
guidelines or code of conduct that is maintained in the organization that would be a given set of
rules for every members who are associated with the organization and they have to abide by it. In
an organization the employees are considered to play a significant role as they are the ones who
carry out the functions of the company and therefore, they determine the reputation of the
organization in the society. In conclusion, it can be understood that there are various aspects of
corporate governance and ethical leadership.

27CORPORATE GOVERNANCE
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