Corporate Governance and Ethics: Apple Inc. - Detailed Business Report

This report provides a comprehensive analysis of Apple Inc.'s corporate governance and ethical considerations. It begins with an overview of the company, tracing its history and core business operations. The main body delves into Apple's corporate governance structure, examining the roles of the board of directors, management, and shareholders. It explores the concepts of corporate governance, including shareholder and stakeholder perspectives, and the importance of ethical practices within the company. The report then identifies and analyzes failures and weaknesses in Apple's corporate governance, specifically focusing on the 'battery gate' scandal and its consequences. It evaluates different corporate governance systems and their implications for Apple. The report concludes by summarizing the key findings and offering insights into the challenges and opportunities facing Apple Inc. in terms of corporate governance and ethical decision-making.

Corporate governance
and ethics

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Overview of the Company...........................................................................................................3
Corporate Governance...............................................................................................................4
Failure and weaknesses of Corporate Governance....................................................................6
Corporate Governance evaluation..............................................................................................7
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
In present conditions of the world, environment of business is becoming wide and
dynamic day by day. Other aspects of it is, the emerging of corporate governance in environment
of business. Corporate governance is known as method by which the system of business
organization is directed and controlled. It has become the most crucial factors in business as it
helps in principles guiding. It even allows businesses for taking accurate decision and do work in
accordance to shareholder’s interest. It permits businesses for achieving target objectives in
suitable way. In the project, APPLE INC. which is the American international firm operating in
different nations, it majorly deals in electronics, services of software and also the services for
online operations. It specifically deals with corporate governance of the firm with centre
structure, mechanisms and the perspective of shareholders. Further the weaknesses and failures
of corporate governance results in challenges for the business organization. There will be
mention of corporate governance consequences also. In addition, the evaluation of several
responses to the corporate governance and governments rules and regulations role in response to
the challenges raised by the thorough examination of ethical issues affecting on the business
enterprises.
MAIN BODY
Overview of the Company
APPLE is the US based international technology business firm which deals in the software,
consumer electronics and online facilities. The firm was established by Steve Jobs,
Ronaldo Wayne and Steve Wozniak in the year 1st April, 1946. Firms headquarter is in
Cupertino, United States of America. It gives various kinds of goods to the retail
consumers by the use of several advanced ands latest technologies. It is considered as the
biggest technology firm in revenue terms. It provides facilities to the consumers spreaded
worldwide. Apple is the largest firm as measured by its capitalization of the market. It is
publics firm which is listed on the US stock exchange NASDAQ and on others also. In the
present years 2022 firm has almost more than 500 physical stores all over the globe
(Rezaee Z., 2019). Goods and services which are provided to consumers by the firm are
iPhone, iPad, air pods, mac book and Apple music along with other services also. It is the

2nd biggest producer of mobile devices. Firms vision is to change way of viewing
computers by people and makes gadgets which are user friendly for remaining elongated
time in market place. Firms share in the market got slowed downs after the year 1990 and
firms urgently required an operations system with motive of success achievement. Apples
have the alliance with Microsoft for creating the new Mac version of the software which
was the changing point for business organization. Firm launched the iBook which helped
the firm for becoming the leader in the market. In the year 2007, firm introduced the touch
screen mobile devices which was the firms most successful product. After the expansion of
the services in other fields also. Company is 1st in the world which is valued at trillion
dollars and got doubled in future years. Firm trades in stock exchange Nasdaq as the
symbol of AAPL and is the part of S&P 100, Nasdaq 100 and 500 also. (Srivastava and
Kamalini, 2022)
Corporate Governance
Corporate governance refers to the which leads the firms for working with the appropriates
practices and rules so they are controlled and directed in as proper way. It gives guidance to the
leaders and built the trust between the investors and leads business firm to function as per the
shareholder’s interest, management, employees and directors. Main force of the firms are board
directors which influence the corporate governance.
In Apple directors board is made of the 7 members in which the 5 board members make
management team. In company directors board has various roles and responsibilities. Primary
role is of leadership provisioning of the business by the setting of the long and short terms
strategies of the business organization. Board of Apple has the responsibility of ensuring that
finance and various other sources of the business aren’t suitable but are integrated with the goals
of being the innovation leader in Personal Computers market in all over the globe. Directors
boards in business get empowered by the firm’s mission statement for making sure that
performance of the management is used internally with the standards and values of the business
objectives. Directors of the board responsibility and roles is to act as perfect in the behalf of
stakeholders and shareholders by ensuring the interest is met in a clear manner and inferred.
(Sama, Stefanidis and Casselman, 2022)
For the avoiding of employee’s frictions and frustration of the bonds, enterprise and
employees need to have the comprehensive agreement on the documents for the binding for

compensatory package. Firm aims at the retention and attraction of managers by making sure the
company gets success in the market. They basically strive for the achievement of goals of the
business on behalf of stakeholders. Committee of compensation in the business determines
compensation of the managers and sees the compensation programme. By application of good
programme of compensations firm believes performance may get improved in the economic
environment which is changing every day. Strategy of compensation consists of various rewards
such as annual bonuses, basic salary which is on the basis of their performances and also the
equity rewards for long term retention. It focuses on the determination of the supplement rewards
which boost the performance of employees. Firm provides the equity rewards in every two years
to the employees who are mentioned. ( Phaswana and Pelser, 2021)
Board of Apples is made of enhanced quality individuals who have expertise in their
respective departments. The effectiveness is of the high value as it affects ability of performance
of functions in the efficient way. After pandemic of Covid 19 and economic and social
obstructions which have caused big problems for the businesses and leader were tested as never
before. By supply chain snarling and closed places of work directors board and managers have to
navigate unknowingly. Board directors knows the company very well and have all the
information about the upcoming opportunities, challenges and strategy. Board of Apples is very
effectives as they have the diversity in team members and the employees. They evaluate the
performance of members regularly and performance as the whole.
Institutional investors role- In firm there is the agency problems which messes up
professionally functioned enterprises. Manager have the roles and responsibilities which are self-
conflicting and company promotes interests at the firm’s expense of the interest of firm. Here the
forces of institution bring force as they have the interests in firm’s promotion in long tenure.
They pursue actively boards in firm for the following of the efficient corporate governances, the
investors make sure that company puts the interest of long term over the interest of managers.
Stakeholder and Shareholders and perspective in ethical way- By shareholder’s
model, the corporate governance role is decreasing conflicts interest, between the shareholders
and managers in firm. They reduce the cost of agency resulting from the asymmetrical info
between the shareholders and managers and from the existing opportunities behaviour and
altering the interest meanwhile the governance model of stakeholders of firm is container of
expectations, social construction, goals and interests of stakeholders. In the corporate governance

the alignment of decision fully to the interest of shareholders is counterproductive as it do not
guarantee development sustainably of company leading from the convergences of the
stakeholders. Concept of stakeholder’s corporate governances encourages for the reconsideration
of administrative and monitoring questions and bodies composition for the stakeholder’s
representation. (Salin and et. al., 2019)
Ethics and Employees- In the corporate governance awareness of ethical issues ensures
that managers avoid powers abuse and making wrong decision which results in questioning the
behaviour and APPLEs internal practices. Power sharing among different employees makes
structure of the firm and environment of workings becomes crucial issue in the governance.
d working environment becomes vital issue in governance.
Failure and weaknesses of Corporate Governance
Many a times system of corporate governance is under high pressure for the delivering of
the benefits to the shareholders and stakeholders. In the year 2017 Apple issued the
statement for programming the battery in a manner so it works slowly after some time
which forces user for buying the new battery. In year 2017, one of the user complained
about updates resulting in the decreased performance of I phones. But if they replaced the
battery it was functioning very well. Public debated on Apples operations which forced
the users for the replacement of batteries after the devices gets older. Many peoples
claimed about battery that it was behaving abnormally. In different cases the battery
shuted downs while having more than 30 % battery but after new battery insert it
increased to 30%. All this resulted in attraction of great media coverage and CEO itself
have to come for giving clarification. Main weakness of firm is that the loyal customers
consider the firm as the tightly and closely held online service and software firm as
fundamental strength of firm allows it for the controlling of all areas of device
production. It sometimes puts more burden on the cycle of developments as software and
security which becomes the Apples in house responsibility. Biggest business of revenue
generation is hardware business but as due to its closely held nature of company’s
ecosystem forces the enterprise to be in different businesses also. (Tan, 2021)
Consequences faced- Apple is facing several consequences as result of poor corporate
governance such as economy’s poor growth as it affects the firm’s per capita growths. Apples
economic growths was affected to a great extent when scandal of battery gate came out ass

several agencies of government started investigating the scandal. Corruption was at top as the
outcome of bad corporate governance. Brand image of APPLE was impacted greatly because of
this battery gate scandal as many news agencies published about the firm and leaded to lowering
down of profits and sales. It even leads in delays in the future upcoming projects. Several
enterprises which have collaborated earlier with companies also took back the support from firm
as it affected the image of the brand.
Corporate Governance evaluation
Comparative Corporate Governance Systems- In European nations corporate governance
reforms are at the crossroads, as they pursue policy of company’s board strengthening,
improving information flow and motivate oversight of the institutional investors. But even
after following the fulfilment of the revised shareholders rights the directive is
characterized by the disparate initiative series which is future governance agenda
meanwhile in US it is understood as the set of administrative and fiduciary accountabilities
binding management of the company, boards and shareholders in big societal context by
the competitive, regulatory, legal, economic, ethical, democratic and social forces.
(Akinyomi, 2022). It is known as best system of managerial and fiduciary responsibilities
binding company’s managements, shareholders and board internally. As shareholders are
the real owners of business but not run them. As the managers and directors has the
fiduciary obligation in interest of shareholders as structures implies about the facing of two
issues of principal agent by the shareholders with managements as the behaviour is related
with the betterment and board holds groups having particular interest including
management. Shareholders welfares should be prime goal of the corporation stem from the
shareholder’s legal status as residual applicants. Corporate governance have got high
attention in previous years in ASIA region because of crisis of finance. ASIA is the region
having diversity in institution regimes and economic development terms.(Xue and
Basioudis, 2022). The per capita income is different in comparison to the other countries.
The most common thing in various economies is of the family ownership and relationship
based transactions. In Asia corporate governances tells that integration of rights of property
and ownership structure basically downs the incentives, manager’s performance and policy
and firms. Stock exchange of Asia has gone through transformation affecting ownership
structures and business models. Various legal status and sources of revenues affects role in

standard setting and supervisions and enforcing of corporate governance frameworks. In
Asia demutualization and self-listing globalization change is followed. Areas which are
reformed are as follows-
 Enhancement in information quality which the management requires for providing
to the public and shareholders.
 Improvement in the participation of shareholders who are in minority in taking of
decisions of corporates.
 Making of board directors more efficient management and independent.
 Decrease in the likelihood of parties related which hurts shareholders who are in
minority.
 Make banks accountable and efficient as moneylenders.
 Reform of bankruptcy proceedings.
Issues of Globalization of global corporate governance- Magnification of economy
and economic developments isn’t pleasant and moral effects and implications insinuations.
Various issues are of the process responsibility going on and for ensuring individuals well being
and prosperity security. Is the government accountable for this or business are responsible for it?
Challenge of governance in globalization for the engrossment of process aiming at the standards
lying in global context. Stakeholders managements primarily deal with the idea of interest,
internalizing and elements values which are touched or related by corporates decision making,
indicating CSR policy may realize as crusade corporation in issues of environmental and social
such as human rights, global warming and deforestation. Corporate governance secures firms in
deprivation in long tenure. Groups which have social responsibilities, who calculate cost of risk
and failure. Firsts company has duty for the stakeholders and shareholders and has obligation for
the society as the whole. Bankruptcies of corporates has impact on whole society for the booting.
(Rodrigues da Silva, and et. al. 2021)
Ahead the regulators and firm’s shareholders shave duty for ensuring the smooth
functioning. Hence the corporate governances do not relate always to company but is related to
whole society. So the firms shifting duties centre point from main challenges which society tends
to tell.
Values, Leadership and ethical behaviour management- Ethical leadership is known as
leader’s demonstration of businesses the appropriates principles and values internally and

externally in company. Ethical leadership shows great morals pointing wrong things and outlays
correct things for becoming the ethical leader. Moral principles practices maintenance is
becoming very vital in digitalized world where the image of the brands might get damaged. By
behaviour and responsibility acts ethical leadership might improve image of the brand externally.
It basically encourages, inspires and makes the employees feel accountable for working.
Meanwhile values inform companies about the policy of ethics and sets firms for committing the
high standards of ethics and implementation, monitored and governed. If companies need to take
ethics as responsibility, then they need to identify the core principles and values which they want
to held responsible and dedicated. Then they translated guidance values for the employees so
they are assisted for taking decisions as they have no rules in facings ethical issues. They build
the foundation for commitments sets of corporate governance and companies approach towards
the responsibility. Establishing the clear link between business firm motive is vital for making
sure that ethics are the important part of the culture and guides the decision takings at various
levels of firm, promoting the behaviours desirable. Motive and purposes are the foundation of
ethics programmes. Ethics value guides the way of working of the business and what is suitable
and is desired ahead of laws and rules. (Rendtorff, 2019)
Ethics and CSR globally – Standards of ethics builds trust between parties for performing
collective business, including parties’, partners and customers. Business enterprise earns the trust
by the demonstration of ethical behaviour pattern over time, by the gaining of reputation for the
fair deals and respect rights of humans and societies accountability. First ethics are self-reward in
lives and businesses. Companies conducting global businesses in an ethical earns more profits by
the attraction of partner who also share company’s commitment to the ethics in international
business. Firms which has the ethical lapses cost them to a great extent. By the formulation and
enforcement of ethical policy inside in international company and among business partners
oversees shows companies with the issues complexity(Pandey, 2021). By ensuring that
employees and partners met the standards for firm of worker’s safety, human rights and equal
wages which starts with creating of work culture of openness and caring. For the operating in
effective way companies need common system of moral and ethical beliefs for the directing and
driving of day to day decisions which are taken by the individuals in functioning. Different
ethical need is dictated by rules and laws such as worker’s safety rules and protection of

environment. Leadership demonstrates and promotes ethics in international business, ethical
behaviour modelling and decision making by employees. Among business firms which has
formulated code of conduct of ethics intending for applying to whole business and companies
which are of nor government are international alliance and IMA. International alliance codes of
ethics are set of principles and statements in international PR and communication. (Griffiths,
2021)
Professional practices of guiding principles are-
 Obey laws and respect the local rules.
 Work for public interest.
 Engagement in honest, truthful and communication which is based on the facts.
 Practice transparency and disclosure.
 Privacy Honour.
 Act with integrity.
 Recognition of speech freedom, assembly and media.
 Avoid interest conflict.

CONCLUSION
The preceding project states that corporate governance is crucial in presents changing
world and used for directing and controlling the activities of business enterprise. Further
relationship of corporate governance with company, external shareholders and management
is stated with systems of internal corporate governance in reference of shareholders and
stakeholders and ethics of employees. Moving ahead evaluation of corporate governance
weaknesses and failures is mentioned. In last systems of corporate governance in different
countries were mentioned with the issues of globalization in international context.

REFERENCES
Books and Journals
Akinyomi, O.J., 2022. Corporate Governance & Accounting Ethics (ACC 206).
Griffiths, P.D.R., 2021. Conceptual Framework: Corporate Responsibility, Governance, Business
Ethics, Culture and the Knowledge Economy. In Corporate Governance in the
Knowledge Economy (pp. 7-52). Palgrave Macmillan, Cham.
Pandey, A., 2021. Business Ethics and Corporate Governance: Blend of Morality with
Compliance. Issue 4 Int'l JL Mgmt. & Human., 4, p.2871.
Phaswana, I. and Pelser, T., 2021. A corporate governance and business ethics framework: The
case study of bank subsidiaries in an emerging country. Journal of Governance and
Regulation/Volume, 10(3).
Rendtorff, J.D., 2019. The concept of business legitimacy: Corporate social responsibility,
corporate citizenship, corporate governance as essential elements of ethical business
legitimacy. In Responsibility and Governance (pp. 45-60). Springer, Singapore.
Rezaee, Z., 2019. Business sustainability, corporate governance, and organizational ethics. John
Wiley & Sons.
Rodrigues da Silva, and et. al. 2021. CODE OF ETHICS AND CONDUCT IN THE LIGHT OF
CORPORATE GOVERNANCE: THE STAKEHOLDERS'PERSPECTIVE. Brazilian
Journal of Management/Revista de Administração da UFSM, 14(2).
Salin and et. al., 2019. The influence of a board’s ethical commitment on corporate governance
in enhancing a company’s corporate performance. Journal of Financial Crime.
Sama, L.M., Stefanidis, A. and Casselman, R.M., 2022. Rethinking corporate governance in the
digital economy: The role of stewardship. Business Horizons, 65(5), pp.535-546.
Srivastava, R. and Kamalini, M.S., 2022. Incorporating ethics as a part of corporate governance:
Importance and need for a framework. Issue 1 Int'l JL Mgmt. & Human., 5, p.1411.
Tan, Z.S., 2021. Ethics Events and Conditions of Possibility: How Sell-Side Financial Analysts
Became Involved in Corporate Governance. Business Ethics Quarterly, 31(1), pp.106-
137.
Xue, B. and Basioudis, I., 2022. Teaching corporate governance and business ethics in an
international context. In Embedding Sustainability, Corporate Social Responsibility and
Ethics in Business Education (pp. 172-184). Edward Elgar Publishing.