Corporate Governance and Ethics: Legal, Ethical Compliance Report

This report delves into the multifaceted realm of corporate governance and ethics, focusing on the critical debate between legal and ethical compliance. The assignment explores the regulatory frameworks and ethical considerations that shape corporate responsibility. The report examines the impact of legal compliance, as defined by statutory laws and regulations, and contrasts it with the significance of ethical compliance, which emphasizes moral obligations and responsible conduct within organizations. The analysis includes an introduction to the concepts of corporate governance, followed by arguments supporting the greater impact of legal and ethical compliance, respectively. It also incorporates a rebuttal section that addresses the counter-arguments, and concludes with a synthesis of the key findings. The report underscores the importance of ethical decision-making, the responsibilities of professionals, and the prevention of fraud within a corporate environment, highlighting the interconnectedness of these elements in fostering a responsible and ethical business culture. The report uses examples and theories to support the arguments presented.

Running head: CORPORATE GOVERNMENT AND ETHICS
CORPORATE GOVERNMENT AND ETHICS
Name of the Student
Name of the University
Author Note

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Part 1
The process or method of Corporate Governance is where the functional or the
operational activities of any organization or corporations are regulated and governed by the
members or the directors of the organization or corporation. In Australia the regulations or the
guidelines which are provided as statutory law form the main system under the Corporations Act
as the provisions which regulate those organizations or corporations under corporate governance.
In Australia the corporate body or the entity that is of value is considered to be a corporation or
an organization which is also known as a company under the Corporations Act, 2001. The main
focus or concentration of the corporate governance framework is on the public listed companies
or the organizations. The corporate governance rules generally regulates the matters such as the
directors’ responsibilities or duties various disclosures of the companies or the organizations
along with the reporting matters of the directors’ as well as the other members of the corporation
or the organization (Christensen, Kent and Stewart 2010).
Introduction
Legal Corporate Governance Compliance has Greater Impact on Corporate Responsibility
Corporate Governance is considered to be the method or the process in which the
companies or the corporations are regulated or governed by a Board of Directors as the directors
have certain duties and responsibilities that needs to be executed and implemented which would
help in obtaining benefits for the company or the corporation. Corporate Governance regulates
the workings or the operations of the corporations. The corporations are governed and regulated
by the directors who form a part of that corporation and they take care of what is considered to
be the best for that particular company or organization (Du Plessis, Hargovan and Harris 2018).

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The shareholders’ interests are not of the utmost importance but they are significant to the well-
being of the corporation. The Corporations Act, 2001 forms the main statutory regime for the
companies or the organizations which try to govern or regulate the companies. The regulatory
framework includes the duties and responsibilities of the directors and it lays down several
principles and recommendations. The Australian Corporate Governance Code has been focusing
mainly on the listed entities. There needs to be a solid foundation of the principles laid down by
the management and the functions or operations of the employees who are working in the
company needs to be monitored and supervised by the Board. The board that is going to govern
or regulate the operations of its employees need to be structured in a manner which would bring
value to the company. The board needs to act responsibly. They should not make any kind of
untimely disclosures. They should help and assist the security holders of a company and help
them in using their rights. The risk management by the Board needs to be done in a proper and
careful manner. The remuneration given to the individuals working in a company or an
organization need to be fair. These are the principles on which the regulatory framework of
corporate governance in Australia is based. Corporate Governance is connected to corporate
responsibility as there are duties that are to be performed by people in a company or an
organization and the company also has a specific duty towards the society. Therefore, the
regulatory framework has a greater impact on corporate responsibility (Bottomley 2016).
Ethical Corporate Governance Compliance has Greater Impact on Corporate
Responsibility
There are certain rules and guidelines that need to be followed by individuals in order to
live in a society. These can be understood as moral obligation or ethical behavior that individuals
have towards each other. Therefore, in Corporate Governance as a corporation or a company is

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considered to be a separate legal entity which has its own rights and duties there are certain
ethical behavior that needs to be followed by these legal entities and they are to be governed and
regulated. The operational activities of entities that are governed or regulated by the directors in
a corporation or an organization is considered to be corporate governance. There are certain
guidelines and code of conduct which needs to be followed by the companies which are
considered to be a part of Corporate governance and Corporate Responsibility (Sivathaasan
2016). Therefore, in order to live in a society an individual has certain moral obligations which
they need to follow. Similarly, a company or a corporation being a separate legal entity has
certain duties and rights which need to be followed.
Rebuttal
Significance of the Regulatory Framework of Corporate Governance
The regulatory framework of the corporate governance is considered to be a significant
factor as it was discussed earlier in the ethical corporate governance section that a company or a
corporation is indeed considered to be a legal entity which has its own distinct personality. A
corporation or a company has the right to buy its own property and also enjoy the status as a
separate legal person. Therefore, the regulatory framework of the organization is considered to
be significant. As the regulations and the guidelines that are provided and used to regulate and
govern a corporation have been laid down under the statutory provisions. Even though a
corporation or a company enjoys the status as that of a legal person it is artificial and cannot
function without its board of directors who need to lay down the rules and regulations in order
for the corporation to work smoothly.

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The statutory laws thus, have provided the regulations and the guidelines. The provisions
which regulate and govern these statutory provisions have been derived from the general law or
common law principle or through the statutes. The regulatory framework thus, is a significant
factor in the corporate governance of a company or a corporation. The various principles that are
laid down under the code of Corporate Governance in Australia act as a significant regulatory
framework since the company or an organization are regulated on the basis of these principles.
There needs to be a solid foundation laid down in order to manage the operations of the
corporation and to supervise the operational activities of the employees in a company or a
corporation. The Board that regulates the functions of the corporations need to be composed and
organized in such a manner that it would add value to the company or the organization.
The company or the organization should maintain proper conduct and follow certain
disciplines which would ensure the well being of the workers in the company or the organization.
It should also maintain proper reporting and disclosure methods and the company needs to act
with integrity. The shareholders of a company or organization are considered to be an important
part of the company as they are the ones who invest in a company so their interests should also
be catered to or looked after and the directors should act in the interest of the shareholders. The
risk management technique in a company is also essential and it is of significant concern as the
risks should be assessed properly and the management to ensure such risks that can be treated or
handled properly needs to be of utmost concern. The remuneration that are to be given to the
employees should be fair and effective as the employees of an organization are the ones who
carries out the functions of the company in an effective manner which would benefit the
companies or the organizations (Lama and Anderson 2015). The company should also pay the
directors fairly in order to retain quality directors who would bring value to the company and

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help the company to grow and obtain interests for the corporation or the company. Therefore, the
regulatory framework in corporate governance is a significant factor.
Significance of Ethical Corporate Governance
Ethical Corporate Governance forms a significant factor as there are certain duties which
need to be followed by individuals if they want to be a part of the society. Therefore, since a
company is considered to be a legal entity and a separate legal person the company has certain
obligations towards the society which needs to be kept in mind. In the regulatory framework of
the corporate governance code there have been a principle where it is mentioned that the
members of the company needs to act responsibly and ethically which means a specific code of
conduct needs to be followed and the members of the company or the corporation are bound to
or obligated to follow. Therefore, it can be said that the regulatory framework and the ethical
behavior goes hand in hand or is considered to be complementary to each other.
The board of Directors are considered to have certain duties and responsibilities which
needs to be followed. These duties also include to supervise the ethical behavior of the
employees and whether the decorum is being maintained by the employees of an organization.
Companies or organizations also have the duty to take care of their employees well-being and try
to help employees maintain a proper code of conduct. The companies should motivate the
employees by promoting ethical behavior which would help the company by attaining benefits if
the work is done effectively by the employees (Pintea 2015).
The directors are considered to regulate the operations of the company or the
organization therefore, the directors have certain obligations which are to act in the interests of

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the company or the organization and cater to the needs of the members of the companies.
According to the principles laid down under the Code of Corporate Governance there are certain
responsibilities of the directors which are to act in the interests of the company and its
shareholders. In the code it has also been mentioned that the members of the company or an
organization needs to act ethically which means the members of a corporation has a moral duty
or obligation to act ethically and responsibly which would not effect the others or which would
not cause harm or injury to others. Therefore, this principle helps in proving that corporate
governance also creates an impact on corporate responsibility. According to the code of
corporate governance various new changes or amendments have been made like the whistle
blowing policy has been initiated along with the code of conduct and several other changes.
Therefore, it can be understood that ethical corporate governance plays a significant impact
compared to that of the regulatory frameworks as both these impact the corporate responsibility
(Dempsey 2017).
Conclusion
Regulatory framework and its impact on corporate responsibility
Corporate governance is considered to be the regulations or governance of the
corporations. The major players in this are the directors, the shareowners of the company. The
employees, managers, vendors, suppliers are also considered to be a part of the corporate
governance. The companies have certain duties towards them and therefore the act towards these
members needs to be done responsibly as they have the power to control the working and the
functioning of the company. Thus, in conclusion it can be said that the regulatory frameworks or
the guidelines create an impact on the corporate responsibility of a corporation or a company.

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Impact of Corporate Responsibility in Ethics
A company or a corporation have certain rules and guidelines which are laid down. There
are certain duties and responsibilities of the company or the corporation which involves the
company to maintain an ethical behavior and try to consider the duties the company has towards
its members since the members of a company or a corporation form an integral part of the
company as they are the ones who carries out the functions of a company or a corporation
effectively. Therefore, in conclusion it can be said that the actions of the company or the
organization effects not just the companies but the members of the companies as well. Therefore,
the duties need to be performed in an effective and ethical manner.
Therefore, it can be comprehended from the above discussion that there are certain
guidelines and regulations that are laid down for the companies or the corporations which needs
to be followed in order to obtain benefits for the company or the organization.

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References
Bottomley, S., 2016. The constitutional corporation: Rethinking corporate governance.
Routledge.
Christensen, J., Kent, P. and Stewart, J., 2010. Corporate governance and company performance
in Australia. Australian Accounting Review, 20(4), pp.372-386.
Corporations Act, 2001.
Dempsey, A.L., 2017. Evolutions in Corporate Governance: towards an ethical framework for
business conduct. Routledge.
Du Plessis, J.J., Hargovan, A. and Harris, J., 2018. Principles of contemporary corporate
governance. Cambridge University Press.
Lama, T. and Anderson, W.W., 2015. Company characteristics and compliance with ASX
corporate governance principles. Pacific Accounting Review, 27(3), pp.373-392.
Pintea, M.O., 2015. The relationship between corporate governance and corporate social
responsibility. Review of Economic Studies and Research Virgil Madgearu, 8(1), pp.91-108.
Sivathaasan, N., 2016. Corporate governance and leverage in Australia: A pitch. Journal of
Accounting and Management Information Systems, 15(4), pp.819-825.