Corporate Governance and Ethics: A Comparative Analysis Report

This report delves into the realm of corporate governance and ethics, providing a comprehensive overview of its significance within organizations. It begins with an introduction to corporate governance, defining its role in establishing and maintaining a strong organizational culture and stakeholder relationships. The report then explores the pivotal roles of directors, shareholders, and stakeholders in ensuring organizational growth and sustainability. A significant portion of the report is dedicated to a comparative analysis of corporate governance codes, specifically contrasting the Resolution of 2016 Concerning Corporate Discipline and Governance Standards of Public Joint Stock Companies in UAE with the corporate governance codes of the UK and Japan. The analysis highlights key provisions, principles, and practices of each code, offering insights into their similarities and differences. The report further examines the responsibilities of directors in public listed companies, emphasizing their role in decision-making, strategic objectives, and compliance with laws and regulations. The report concludes by underscoring the importance of maximizing shareholder value and the role of the board of directors in creating a strong link between owners and employees, fostering a positive organizational culture.

Running head: CORPORATE GOVERNANCE AND ETHICS
Corporate Governance and Ethics
Name of the Student
Name of the University
Author Note

1CORPORATE GOVERNNACE AND ETHICS
Introduction on Corporate Governance
Corporate Governance are those rules or laws or procedures which is used by
the corporate inside the office so that they are able to maintain a good culture within
the organization which enables the organization to meet the criteria of high standards
and thus the company sets various goals so that the criteria can be achieved. It fulfils
the aim of the organization to build and to maintain a good relationship so that it
creates a bond which helps to maintain the stakeholder relationship and make it
stronger.
The member of the organization includes the directors and officials such as the
chartered secretary which helps to improve the standards of the organization. If the
corporate governance is strictly followed or adhered then it ensures growth of the
organization and also enables the organization to be sustainable and helps to maintain
the standard and is an integral nature of the organization.
How does Corporate Governance play a important role in the organization
The directors of the company- they play a vital role in regard to any
organization and they play a role which is very important for the organization. They
ensure the growth for the organization and they also see that the organization makes
development so that the company’s rises in the upward direction. The directors of an
organization are the decision makers of the organization and help in the success of the
organization (Baumann-Pauly, 2013).
The shareholders of the company- The share holders are an integral part of
the organization and they play a critical role in the success of the organization. They
are the people who support the company in number of ways. The most important

2CORPORATE GOVERNNACE AND ETHICS
support that the shareholders provide is the support with the capital of the
organization. The capital is the most important factor for any organization so it can be
said that the share holders are the people who are very important for the organization
from each and every way.
Stakeholders of the company- The stake holders are the people who are
directly or indirectly related with the organization. The stake holders can have direct
relation as well as they may also have in-direct relation with the organization
depending upon there function with the organization. Different kinds of stake holders
such as the people who are working within the organization, there are suppliers who
supplies different commodities for the organization. The stakeholders help in
functioning of the organization in different ways and help the companies to grow.
(Cappelli, Moore and Trzeciak ,2012).
A. Comparison between the Resolution of 2016 Concerning Corporate
Discipline and Governance Standards of Public Joint Stock Companies in
UAE, and International codes of cooperate governance UK
The Corporate Governance Code in UAE has set high standard, which provide
for the plan which helps the company to comply with the requirement of the code.
The listed company shall comply with the requirement of Corporate Governance
Code and it sets out the actions to rectify any non-compliance.
The main provisions of UAE Code are as follows:
 There shall be at least one third directors representing independent directors
with a majority of non executive directors. There is either a Chairman or a
Managing director.
 The meeting of the Board of director shall be held once in the two months

3CORPORATE GOVERNNACE AND ETHICS
 An audit committee, nomination and remuneration committee is formed which
is not less than three non executive directors one of whom shall be
independent. Out of the members one member shall be the expert in financial
affairs (Crane and Matten, 2016).
 There shall be compliance officer
 The listed company shall submit a report on corporate governance which
includes the information and the details on the internal corporate governance
system and it conveys any violations committed during the financial year .The
details of remuneration of the seniors are also mentioned.
 The listed company which is listed on the UAE shall notify the SCA and the
management regarding the development that affects the price.
 The board of directors shall be announcing the confidential information
provided there is no trading done by the directors of the company as per
insider trading norms. The listed company shall notify to SCA the
shareholding pattern if it is more than 5 per cent of the company’s securities
(Council, 2012).
The main provisions of UK Code are as follows:
The UK Code for Corporate Governance has set out good practices relating to
the board leadership and also the effectiveness or the remuneration of the
shareholders.
All the companies listed under the UK Act need to apply the code for listing
regulation. The Code contains principles and provisions required in to be reported in
the annual report and are applied in the code. The shareholders read it from the annual
report which increases their trust on the company.

4CORPORATE GOVERNNACE AND ETHICS
The provisions are as follows:
To “comply or explain” concept in the Corporate Governance for UK was in
the Code since the code came to force it was strongly supported by the companies and
the shareholders of the companies operating in UK.
The Main Principles of UK Code
1: Leadership
Every listed company shall have a strong and effective Board who is
responsible for the long term growth .The responsibilities are divided between the
boards and executive who is running the company. The Chairman of the company is
the head of the leadership team. The board helps the non executive to form the
business plan and strategy.
2: Effectiveness
The board shall have the knowledge and expertise to discharge the duties
effectively. The directors should be properly trained so that they can enhance their
skills. The board shall keep with themselves the information required to discharge
their duties in a timely manner .The directors are elected in UK on a regular interval
subject to continued satisfactory performance.
3: Accountability
The board shall prepare a fair, transparent assessment of the company’s
position. The board will maintain a sound system for risk management and internal
control system (Jain and Jamali, 2016).The board should establish fair and transparent
arrangements to maintain appropriate relationship with the company’s auditors.
4: Remuneration
There should be a very transparent form for developing the remuneration of
the individual directors.

5CORPORATE GOVERNNACE AND ETHICS
5: Relations with shareholders
The board should use a general meeting which is called once in every financial
year so that the directors are able to convey and communicate with the shareholders
and the investors.
B. Comparison between the Resolution of 2016 Concerning Corporate
Discipline and Governance Standards of Public Joint Stock Companies in
UAE, and International codes of Corporate governance Japan
The main provisions of Japan Code are as follows:
The ASHA Code of ethics (2010) talks about the ethical and the confidentiality
that is maintained which relates to the information of the clients and the people. The
corporate governance helps in maintaining for better compliance and confidentiality
to maintain the files (Epstein and Buhovac, 2014).The Chartered Accountant is
appointed to comply with management of document and files. The following are the
task in this regard:
1. Separate files are maintained regarding employees and the shareholders
2. All information shall be physically and electronically maintained in a statutory
registrar within a stipulated time (Harris et al., 2013).
3. All information shall be disposed of properly to the required person
4. The company enters into a nondisclosure agreement with the employees so
that there is maintenance of confidentiality of all the information

6CORPORATE GOVERNNACE AND ETHICS
5. Corporate governance adheres to the proper internal control procedures,
accurate financial procedures, the financial standard, and reporting and control
procedures
6. A company secretary is appointed who will be responsible for recording the
meetings in the minute and will be maintaining all the records and documents,
which shall be kept and preserved throughout the business (Horn , 2012).
7. The company secretary attends the meetings of the board, the annual meetings
and maintains the records. He check whether the company has complied the
procedural norms, regulations and thereby carries out all the responsibility of
carrying out the secretarial duties as instructed by the directors of the company
(Jaatun et al., 2016).
The responsibilities of the directors of the public listed companies are as follows:
In an organization the company secretary as well as the directors is being assigned
the responsibility which is proper in nature and such that the functions of the company
are well maintained. The functions of the organization are as follows:
 There are obligations which are needed to be carried out by the director that
they are able to keep the record as well as the financials for the solvency
resolution.
 The listed Companies which are required to compulsorily lodge and file with
the company the annual statement as well as the reports with ASIC and they
should be able to keep the .
 There are some obligations as well as some liabilities which are being imposed
upon the management such that they maintain and abide by those obligations.

7CORPORATE GOVERNNACE AND ETHICS
The board of the directors of a company which is listed in nature has number
of rules and regulation which is strict in nature and these rules are to be
followed very stringently. These rules are as follows:
 The company is provided with the decision that is being made by the board
and they also provide strategy for the leadership which is for the
organization to be followed.
 The board plays a very important role; the board helps in the recruitment
of the managing directors for the organization.
 The directors of a listed organization acts in appointment of the CEO for
the organization they also recruit personnel in managerial position for the
organization. (Armstrong et al, 2015)
 The director helps in reappointment as well as the replacement of the
senior personnel and it is done by passing various resolution in the meeting
 The directors or the company secretary oversee the company strategic
objectives and also manage the operations
 The directors check whether the company complies with all the laws and
regulation and that the entity is able to comply with the accounting and the
reporting system and it also sees that the company had followed the
regulation of the Act.
 They will see and check that the company sees that all the directors and
senior directors and executive will pursue for the upliftment and
succession of the organization.
 The reporting method of an organization functions are being taken care of
by the director of the organization.

8CORPORATE GOVERNNACE AND ETHICS
 The directors of the organization are the persons who ensure that there is a
good control over the company and upon its functions. They ensure that
the functions of the organization are being abided by the law. (Davis and
Chu,2015).
 The reports that are being carried out in a particular financial year are to be
published in the news paper.
Overriding function of the directors in creating shareholders value
The board of directors of the organization helps in managing the organization
in a way such that there is a link created between the owners of the organization and
the employees of the organization such that there is a relation that is created amongst
them which helps in good functioning of the organization. It helps the organization to
function properly and to maintain good relation with the employees. (Yoshikawa, Zhu
and Wang, 2014)
The director or the board also follows the responsibility that the organization
should maintain a culture which is appropriate in nature and which is good for the
employees working within the organization such that there is close bonding and
relation between them which helps in functioning of the organization. This type of
culture is to be maintained throughout and the board of directors ensure that this
culture is being maintained with fullest priority. (Larcker and Tayan, 2015).
Goal of maximizing shareholder value is the primary goal for the company
The share holders are an integral part of the organization and they play an
important and critical role in case of the growth and success of the organization. They
are the people who support the company in number of ways. The most important
support that the shareholders provide is the support with the capital of the

9CORPORATE GOVERNNACE AND ETHICS
organization. (Lazonick, 2014). As it is fact that capital is the most important factor
for any organization so it can be said that the share holders are the people who are
very important for the organization from each and every way. The society and the
surrounding are to be taken care of by the organization and this is one of the moral
performance of the organization. (McCahery, Sautner and Starks, 2016).
Corporate Governance helps in
(1) It looks after the share holders so that there is a healthy relationship within them.
(2) It sees that the compensation and other remuneration are being given on time and
the practice is being carried out according to the procedures.
(3) It gives importance to the investors of the organization. It sees that the investment
that is being made by the share holders are being utilized properly and such that
maximum profit can be made from that investment so that it creates an positive
impression for the share holders and thereby strengthen the bonding with them. The
CEO of the organization functions in:
a) Buying back the stock of the organization. (Omarova, 2016)
b) It maintains the remuneration of the executive and rewards them for any kind
of innovative work that is being shown from there side.
c) In order to replacing the people who are the stake holders of the organization
and helping the consumers of the company which is listed as a public limited
company
The board thinks for the share holder and they try to serve their interest. The
board understands that the share holder of the organization wants their money to be
utilized to the fullest so that they can get a good return on their money invested. The
board takes care of the interest of the share holders which creates a strong bond with

10CORPORATE GOVERNNACE AND ETHICS
the share holder, which can serve for the betterment of the organization for a long
period of time in the future. (Tricker and Tricker, 2015)
C. Comparison between UAE code and UK code with the Germany code and
with Japan Code
UK CODE GERMANY CODE UAE CODE JAPAN
CODE
Code: Corporate
Governance Code and
Corporate
Governance Report
and Securities and
Exchange Board
Issuing Body:
Securities and
Exchange Board of
India
(“SEBI”)
Legal Basis and
Compliance:
Mandatory with
certain
Exceptions as to
certain
recommendations
Code: Corporate
Governance Code
Issuing Body:
Federal Commission
for the Securities
Market
Legal Basis and
Compliance:
Voluntary, but
companies
encouraged to
comply or
Explain
Objectives: Set forth
best standards of
observing
Shareholder rights
and facilitating their
Code: United Arab
Emirates Ministry of
Economy,
Ministerial
Resolution No. (518)
of 2009 Concerning
Governance Rules
and Corporate
Discipline Standards
Issuing Body:
Securities and
Commodities
Authority
(“SCA”)
Legal Basis and
Compliance:
Mandatory
Objective:
Code:
Commercial
Code
Issuing
Body: Tokyo
Stock
Exchange
Legal Basis
and
Compliance:
Voluntary but
companies
are
encouraged
to comply it
Objective:
The main
objective was

11CORPORATE GOVERNNACE AND ETHICS
Objectives: Make
corporate governance
framework
More effective
Scope: Listed
companies with
certain exceptions
Predominant Board
Structure (listed
companies):
Unitary
implementation
In practice, and make
a company’s
management
More efficient and
ensure its long-term
sustainable
Growth
Scope: Joint stock
companies whose
securities are
Listed on organized
markets
Predominant Board
Structure (listed
companies):
Two-tier: The law
requires that a joint
stock company with
More than fifty
shareholders have a
supervisory body
(“Board of
directors”) in
addition to an
Achieving corporate
discipline in the
management
Of companies in
accordance with
international
Standards and
approaches through
determination
Of responsibilities
and duties of
members of
Boards of directors
and the executive
management of
The company, taking
into consideration
protection of
Shareholders’ and
stakeholders’ equity
Scope: All joint
stock companies
whose securities are
Listed on a
Securities and
to improve
the corporate
governance
and to
perform more
rigorous
control and
monitoring of
firm
management
Scope: This
new code
permitted the
Japanese to
select the
traditional
“kansayaku”
system or the
new
committees
system.
Rules: To
provide
transparency,
the issuers

12CORPORATE GOVERNNACE AND ETHICS
executive
Body.
Commodities Market
that is
Under the license of
SCA to continue
their operation in
UAE (the example
of such is the
Securities exchange
of Abu Dhabi)
must include
The
following
information
for the
accounting
time frame is
being taken
care of the
annual report
and the
important
dates and
events that
took place
from that day
up to the date
of publication
that is being
carried out
and it also
affect the
annual report.
Boards of directors
are responsible for the
T]he obligation of
the Management
The board of
directors shall

13CORPORATE GOVERNNACE AND ETHICS
governance
Of their companies.
The responsibilities of
the
board include setting
the company’s
strategic aims,
providing the
leadership to put them
into effect,
supervising
the management of
the business and
reporting
To shareholders on
their stewardship. The
board’s
actions are subject to
laws, regulations and
the shareholders
In general meeting.
The board’s role is to
provide
entrepreneurial
leadership
Board and the
Supervisory
Board is to ensure
the continued
existence of
the enterprise and its
sustainable creation
of value in
Conformity with the
principles of the
social market
economy. The
General Meeting
resolves on the
Articles of
Association,
Supervisory Board
The Supervisory
Board appoints,
supervises and
advises
the members of the
Management Board
and is directly
involved in decisions
develop procedural
rules
for corporate
governance,
supervise and control
the
application of the
same, in line with
the provisions of
This Resolution and
shall be liable for the
application.
Corporate
governance is a set
of rules, standards
and procedures that
aim at achieving
corporate discipline
in the management
of the company in
accordance
with international
standards and
approaches
through

14CORPORATE GOVERNNACE AND ETHICS
of the company within
a framework of
prudent
and effective controls
which enables risk to
be assessed
And managed.
of fundamental
importance
The representatives
elected by the
shareholders and the
representative
Management Board
The Management is
responsible for
caring out all the
duties to manage the
organization. They
are responsible to
make strategy and
based on that
strategy the
organization function
such that the proper
functions are being
maintained and the
board also carries out
supervisory functions
which helps the
organization to
function in a proper
determination of
responsibilities and
duties
of members of
boards of directors
and the executive
management of the
company, taking into
consideration
Protection of
shareholders’ and
stakeholders’ equity.

15CORPORATE GOVERNNACE AND ETHICS
way.
Conclusion
In today’s world with the growth in the corporate culture it is very important
to form a strategy and objective such that it helps the organization to function
properly based on those objective or strategy. Shareholder is one of the most
important asset for the organization and there are number of objectives and strategies
that are being carried out so to protect the interest of the share holder as well as the
stakeholders of the organization, who also plays a very important role in the day-to-
days operation of the organization.

16CORPORATE GOVERNNACE AND ETHICS
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