objectives. It is a system of structuring, operating and controlling a company with a view toachieve long term strategic goals to satisfy shareholders, creditors, employees, customers andsuppliers, and complying with the legal and regulatory requirements, apart from meetingenvironmental and local community needs. When it is practiced under a well-laid out system, itleads to the building of a legal, commercial and institutional framework and demarcates the boundaries with in which these functions are performed.” To state in simple terms, corporategovernance relates to a code of conduct, the management of a company observes whileexercising its powers. Quality corporate governance not only serves the desired corporateinterest, but is also a key requirement in the best interests of the corporates themselves.
Box No.4.1: Some Useful Definitions of Ethics and Corporate Governance
Sri AurobindoBut that which determines his ethical being is his relations with God, the urge of theDivine whether concealed in his nature or conscious in his higher self or inner genius.He obeys an inner ideal, nor to a social claim or a collective necessity. The ethicalimperative comes not from around, but from within and above him.Peter F. Drucker The Ecological Vision (1993)
Above all, the ethics or aesthetics of self-development would seem to be tailor-made for the specific dilemma of the executive in modern organization.Their function demands the self-discipline and the self-respect of the superior man.Thoughthe terms governance, good governance and corporate governance is increasingly usedRGarrett and Klonoski, 1986:2in development literature since re rnance is not new. It is as old ascent times, the concept of goveBusiness ethics is concerned primarily with the relationship of business goals andhuman civilization. The eastern civilization has enumerable examples, where in emphasis wastechniques to specifically human ends. It studies the impacts of acts (DECISIONS)on thegood of the individual, the firm, the business community and society as a whole…businesslaidon good governance. The activity of the state, as envisaged by the great eastern thinkers onethics studies the special obligations which a person and a citizen accepts when he or she becomes a part of the world of commerce. polity relates to all aspect of human life, social,economic and religious. Peace, order, securityRobert C. SolomonEthics and Excellence (1992)….integrity, in the face of conflict of the virtues, is the challenge rather than the answer.It is moral courage… moral courage is not self-sacrifice…Moral courage is not self-righteous obstinacy and it is not at all opposed tocompromise…Moral courage includes an understanding of the big picture, the purpose(s)of the organization, and the way in which the organization or some part of it thwarts itsown best intentions.3Corporate Governance is a system by which companies are run. It relates to the set of incentives, safeguards and the dispute resolution process that is used to control and coordinate