What is Good Governance?

Good Governance is an approach to government that is committed to creating a system founded

in justice and peace that protects individual’s human rights and civil liberties. According to the United
Nations, Good Governance is measured by the eight factors of Participation, Rule of Law, Transparency,
Responsiveness, Consensus Oriented, Equity and Inclusiveness, Effectiveness and Efficiency, and
Accountability.
 Participation requires that all groups, particularly those most vulnerable, have direct or
representative access to the systems of government. This manifests as a strong civil society and
citizens with the freedom of association and expression.
 Rule of Law is exemplified by impartial legal systems that protect the human rights and civil
liberties of all citizens, particularly minorities. This is indicated by an independent judicial branch
and a police force free from corruption.
 Transparency means that citizens understand and have access to the means and manner in which
decisions are made, especially if they are directly affected by such decisions. This information
must be provided in an understandable and accessible format, typically translated through the
media.
 Responsiveness simply involves that institutions respond to their stakeholders within a
reasonable time frame.
 Consensus Oriented is demonstrated by an agenda that seeks to mediate between the many
different needs, perspectives, and expectations of a diverse citizenry. Decisions needs to be made
in a manner that reflects a deep understanding of the historical, cultural, and social context of
the community.
 Equity and Inclusiveness depends on ensuring that all the members of a community feel included
and empowered to improve or maintain their well being, especially those individuals and groups
that are the most vulnerable.
 Effectiveness and Efficiency is developed through the sustainable use of resources to meet the
needs of a society. Sustainability refers to both ensuring social investments carry through and
natural resources are maintained for future generations.
 Accountability refers to institutions being ultimately accountable to the people and one another.
This includes government agencies, civil society, and the private sector all being accountable to
one another as well.

How to achieve good governance?

Good governance, to be effective and sustainable, must be anchored in a vigorous working
democracy which respects the rule of law, a free press, energetic civil society organizations and effective
and independent public bodies such as the Commission for Human Rights and Good Governance,
Prevention of Corruption Bureau and the Fair Trade Commission. The Commission is important in
ensuring the promotion and protection of human rights, but also in ensuring both transparency and
accountability on the part of the government. Good governance requires transparency and efficiency
also in different government agencies.
At the political level democratic practices, including transparency in policy making and
administration, are important aspects of good governance. This is signified by a pluralistic political
system that allows the existence of diversity in political and ideological opinions. No wonder that good
governance is said to be more easily achieved and guaranteed in a multi-party system than in a mono-
party system. It also means the holding of regular elections applying the principle of universal franchise.
In order to qualify as democratic, elections must be free and fair.
Good governance deals with the nature and limits of state power. The doctrine of the separation
of powers is therefore relevant in the establishment of whether or not a country has a political system
that is responsive to good governance. The doctrine of the separation of powers is based on the
acceptance that there are three main categories of government functions: legislative, executive, and
judicial. Corresponding to these are the three main organs of government in a state – the Legislature,
the Executive and the Judiciary. The doctrine insists that these three powers and functions of
government in a free democracy must be kept separate and exercised by separate organs of the state.

What is Social Responsibility?

Social responsibility is an ethical framework and suggests that an entity, be it
an organization or individual, has an obligation to act for the benefit of society at large. It is a duty every
individual has to perform so as to maintain a balance between the economy and the ecosystems.
A trade-off may exist between economic development, in the material sense, and the welfare of the
society and environment,[1] though this has been challenged by many reports over the past
decade.[when?][2][3] Social responsibility means sustaining the equilibrium between the two. It pertains not
only to business organizations but also to everyone whose any action impacts the environment.[4] It is a
concept that aims to ensure secure healthcare for the people living in rural areas and eliminate all
barriers like distance, financial condition, etc. This responsibility can be passive, by avoiding engaging in
socially harmful acts, or active, by performing activities that directly advance social goals. Social
responsibility must be intergenerational since the actions of one generation have consequences on those
following
 Levels of Social Responsibility
1. Economic aspects
Companies need to maintain strong economic interests so they can stay in business. Being
profitable and providing value to shareholders is part of a company being socially responsible.
2. Legal aspects
A company must follow the law and have a legal obligation to do so. For example, car
companies are required to meet a certain level of emissions standards in car production.
3. Ethical aspects
Acting ethically means going above and beyond the legal requirements and meeting the
expectations of society
4. Philanthropic aspects
This is the expectation that companies should give back to society in the form of
charitable donations of time, money, and goods.
 Four Types of Corporate Social Responsibility
 Environmental Sustainability Initiatives
Environmental sustainability initiatives enacted by businesses generally focus on
two main areas: limiting pollution and reducing greenhouse gases. As the awareness of
environmental issues grows, businesses that take steps to reduce air, land and water
pollution can increase their standing as good corporate citizens while also benefiting
society as a whole. For example, Cisco Systems, a multinational technology company,
 has taken a variety of steps to reduce its carbon footprint, including the installation of
photovoltaic systems at production facilities and developing platforms that allow
employees to work from remote locations rather than commuting to the office.

 Direct Philanthropic Giving

Philanthropic initiatives include the donation of time, money or resources to
charities and organizations at local, national or international levels. These donations can
be directed to a variety of worthy causes including human rights, national disaster relief,
and clean water and education programs in underdeveloped countries.

 Ethical Business Practices

The primary focus on ethics is to provide fair labor practices for businesses’
employees as well as the employees of their suppliers. Fair business practices for
employees include equal pay for equal work and living wage compensation initiatives.
Ethical labor practices for suppliers include the use of products that have been certified
as meeting fair trade standards. For example, Ben and Jerry’s Ice Cream uses fair trade-
certified ingredients like sugar, cocoa, vanilla, coffee and bananas.

 Focus on Economic Responsibility

Economic responsibility focuses on practices that facilitate the long-term growth
of the business, while also meeting the standards set for ethical, environmental and
philanthropic practices. By balancing economic decisions with their overall effects on
society, businesses can improve their operations while also engaging in sustainable
practices. An example of economic responsibility is when a company modifies its
manufacturing processes to include recycled products, which could benefit the
company by potentially lowering the cost of materials and also benefit society by
consuming fewer resources. Sustainability and corporate social responsibility initiatives
will continue to be prevalent in years to come.
 Kinds of Social Responsibility
 Economic Responsibility
The business itself is an economic activity. Its main function is to earn profits. To earn
profits means to understand the needs and demands of consumers whether it be regarding the
quality of the product or its price.
While understanding the perspective of the consumer and meeting their needs and
demand to earn a profit is the economic responsibility of a business. When a business earns a
profit, it also means that the employees earn the profit in terms of incentives. The economic
growth of a business is not restricted to itself but affects the society as a whole.
 Legal Responsibility
Legal responsibilities are not only liable to the individuals in the society but also to the
businesses in the society. As business is an entity itself, it must also follow laws and rules. Every
business has a responsibility to operate within the boundaries set by the various commissions
and agencies at every level of the government. These rules and regulations are set for
maintaining balance and the greater good of the society.
A law-abiding enterprise is a socially responsible enterprise as well. The business is free
to do business however it wants but only within the boundaries of regulations of various laws
such as labor law, environmental law and criminal law. For example, it’s a business’s duty to pay
 taxes to the government and keep its account books clean as it helps the government to track
the economic state of the company.
 Ethical Responsibility
Ethical responsibilities include the behavior of the firm that is expected by the society
but not codified in law. The factors of ethical responsibility include that the business must be
environmentally friendly. The business should always be aware of its activities and how do they
affect the environment. It is the moral and ethical responsibility of every human and every
business.
 Discretionary Responsibility
Business is one the most important pillar of the society. And therefore it should support
and improve the society whenever it can. If a business is making significant profits it is the
business responsibility that it should be philanthropic towards the society by donating funds or
its goods and services.
It’s the philanthropic responsibility of the business to help different groups of the society.
It should also work towards providing free education by opening educational institutes and
training institutes or helping the people affected by natural calamities such as floods and
earthquakes. It is the responsibility of the company management to safeguard the capital
investment by avoiding speculative activity and undertaking only healthy business ventures
which give good returns on investment.
 CORE SUBJECTS AND KEY PRINCIPLES OF SOCIAL RESPONSIBILITY
ISO 26000-2010: Guidance on Social Responsibility identifies seven core social responsibility
subjects:
 Organizational governance
 Human rights
 Labor practices
 Environment
 Fair operating practices
 Consumer issues
 Community involvement and development
In addition to the core subjects, ISO 26000 also defines seven key principles of socially responsible
behavior:
 Accountability
 Transparency
 Ethical behavior
 Respect for stakeholder interests
 Respect for the rule of law
 Respect for international norms of behavior
 Respect for human rights

Why is ethics important to business?

Ethics concern an individual’s moral judgments about right and wrong. Decisions taken within an
organization may be made by individuals or groups, but whoever makes them will be influenced by the
culture of the company. The decision to behave ethically is a moral one; employees must decide what
they think is the right course of action. This may involve rejecting the route that would lead to the biggest
short-term profit.
Ethical behavior and corporate social responsibility can bring significant benefits to a business. For
example, they may:
 Attract customers to the firm’s products, which means boosting sales and profits
 Make employees want to stay with the business, reduce labor turnover and therefore increase
productivity
 Attract more employees wanting to work for the business, reduce recruitment costs and enable the
company to get the most talented employees
 Attract investors and keep the company’s share price high, thereby protecting the business from
takeover.
Knowing that the company they deal with has stated their morals and made a promise to work in an
ethical and responsible manner allows investors’ peace of mind that their money is being used in a way
that arranges with their own moral standing. When working for a company with strong business ethics,
employees are comfortable in the knowledge that they are not by their own action allowing unethical
practices to continue. Customers are at ease buying products or services from a company they know to
source their materials and labor in an ethical and responsible way.

Business Ethics - Moral Reasoning

What is Morality?
In a broad sense, morality is a set of rules that shapes our behavior in various social situations.
It is more sensitive doing the good instead of the bad, and therefore, it establishes a level of standard
for virtuous conduct.
Where Does Morality Come From?
The principles of moral ethics can be injected into any business. Ethical businesses recognize the
power of conducting businesses in socially responsible ways and they realize that doing so leads to
increase in profits, customer satisfaction and decrease in employee turnover.
Business ethics is concerned with applying a moral framework to the way organizations do
business. From dealing with human resources issues to sales and marketing policies, ethical viewpoints
can shape and change the way businesses operate.
Business ethics has both normative and descriptive elements −
 The normative part of business ethics has to do with understanding, how the behavior you and
your employees exhibit in relation to cultural issues or social upbringing. The key to normative
ethics for business owners is to understand how personal beliefs affect the choices made as a
business owner.
 The descriptive part of business ethics, on the other hand, is related to how you incorporate
"best practices" into your organization's policies and procedures.

The Relation of Ethics with other Sciences and Other Phases of Human Life
 Ethics and Psychology
The relationship between psychology and ethics is determined by whether psychology is
conceptualized as a natural or a human science. If the former, then psychology is incapable of
identifying universal moral imperatives because of the fact/value dichotomy that rejects the
possibility of logically deriving moral principles or social policies from factual statements. In addition,
the inevitability of moral pluralism raises the question as to how natural science methodology can
select moral truths or social policies from a variety of presumed alternatives. In contrast, human
science psychology, which emphasizes phenomenological experience as a source of psychological
truths, has attempted to bridge the fact/value gap. Upon close examination, this approach has failed
to suggest a rule as to how the "correct" set of values can be identified. The conclusion is that facts
cannot dictate moral principles or social policies but they can help illuminate their consequences.
Policy decisions become the responsibility of a democratic society, not of psychology.
 Ethics and Economics
Ethics studies values and virtues. A value is a good to be achieved or a standard of right to be
followed, while a virtue is a character trait that enables one to achieve the good or act rightly. Ethical
issues connect intimately with economic issues. The global economy is immersed in the worst crisis
since 1929. Among its causes are ethical lacunae. Factors such as failings in corporate governance,
speculative tendencies, the deficient training of managers in ethics and a reductionist view of the
economy have had severe consequences. There is now a thirst for ethics. It is essential to recover
the relationship between ethics and the economy. Alignments are proposed for an ethical agenda
for the economy that confronts the ethical scandals of large-scale poverty and the marked
inequalities in a world where technological revolutions have multiplied productive capacity.
 Ethics and Law
Laws are mandatory guidelines while ethics are voluntary guidelines. Man starts learning
Ethics from the time of birth while laws, according to the requirement of specific actions to make
them standardize. Laws are not always based on ethics. But there is a close relation of Law and Ethics.
Ethics involve emotions while law is unemotional in its delivery. It is ethical to not break the law.
Ethics guide how well we can obey the law. Sometimes ethics does not lead to Laws. A relationship
exists between law and ethics. In some instances, law and ethics overlap and what is perceived as
unethical is also illegal. In other situations, they do not overlap. In some cases, what is perceived as
unethical is still legal, and in others, what is illegal is perceived as ethical. A behavior may be
perceived as ethical to one person or group but might not be perceived as ethical by another. Further
complicating this dichotomy of behavior, laws may have been legislated, effectively stating the
government’s position, and presumably the majority opinion, on the behavior.
 Ethics and Religion
The relationship between religion and ethics has occupied an important place in the
discourses of philosophers. The logical position regarding the relationship of religion and ethics in
general, the intimate relationship between the two, as contingent facts of history, has never been
and never can be, denied. There may be morality without religion, but there has not been a religion
without morality.
 Ethics and Professional Code of Conduct
It is easy to see why a code of ethics and a code of conduct may be confused or used
interchangeably. Both have goals of setting a standard of behaviors from employees. The primary
difference is that a code of conduct is less morally driven than a code of ethics. For example, the
code of conduct might require all employees to wear a specific color or a company shirt when in the
office. This is not an ethical issue, but it is a conduct issue designed to create cohesiveness among
employees.
 -In other words, the code of conduct may not always be ethically driven, but every code of
ethics scenario should have a corresponding set of rules in the conduct code. Every business should
have a clear vision, when it comes to ethics and conduct. What that happens, then employees work
better as a team, job satisfaction increases and performance improves when companies set the tone
with meaningful ethical and conduct standards. The result is a positive corporate culture, in which
people want to go to work and that consumers enjoy working with these employees.

Ethical Issues and Problems in Business and the Corporate World

 Sexual Harassment
It is an issue in the corporate world that must be looked into because it can create a
hostile and unhealthy workplace for the employees. For this reason, the Congress of the
Philippines enacted the Anti-Sexual Act of 1995 or RA 7877 declaring sexual harassment unlawful
in the employment, education or training environment, and other purposes.
 Unsafe Working Conditions

Employees have a right to safe working conditions based on regulation .

 Whistleblowing or Social Media Rant

Business owners must respect and not penalize employees who are deemed
whistleblowers to either regulatory authorities or on social media. Essentially, employees are
encouraged and cannot be penalized for raising awareness of workplace violations.
 Ethics in Accounting Practices
A business must maintain accurate bookkeeping practices. Even small privately held
companies must keep accurate financial records to pay appropriate taxes and employee profit
sharing or to attract business partners and investments.
 Nondisclosure and Corporate Espionage
Employers are at risk of employees and former employees stealing information. This
might be client data used by organizations in direct competition with the company. When
intellectual property is stolen or private client information is sold on the black market, it is
corporate espionage. Employers may require employees to sign nondisclosure agreements with
stiff financial penalties to discourage these types of ethics violations.
 Gifts and Bribes
Political decisions are supposed to be made on the merits of the case, not based on
whether or not the decision maker has received a lovely case of wine from one of the parties.
This is a simple matter of fairness. When decision makers take gifts, even if their votes are not
influenced, they give the appearance of being on the take, which undermines public confidence
in government. Policies and practices on handling gifts and invitations to special events vary from
company to company. For some the potential harm to an organization’s credibility is not worth
the risk and they ban all gifts to employees, excluding personal gifts from friends and family.
Other organizations accept gifts, but when received, donate them to a non-profit organization.
Then there are some organizations where gifts received must be declared and it is maintained in
registers. In other organizations, unsolicited gifts are shared with all employees. If everyone
benefits equally, it may lessen the perception that the gift was intended to influence the action
of a single employee.
 Office Romance
 Policies regarding office dating vary, and involved employees have an ethical
responsibility to carefully review their employer’s rules and regulations. Most employers take the
position that it is difficult to prohibit these relationships so they would rather manage them to
make sure it doesn’t have a negative effect on productivity and office morale. Employers must
be aware of the danger of hostile workplace lawsuits if co-workers feel a person is getting special
treatment because of the relationship or feel the workplace is unfair. The claimant could be the
subordinate in the partnership, but it could also be fellow workers who feel uncomfortable or
treated unfairly because of it.
 Conflict of Interest
A conflict of interest arises when what is in a person’s best interest is not in the best
interest of another person or organization to which that individual owes loyalty. For example, an
employee may simultaneously help himself but hurt his employer by taking a bribe to purchase
inferior goods for his company’s use. A conflict of interest can also exist when a person must
answer to two different individuals or groups whose needs are at odds with each other. In this
case, serving one individual or group will injure the other. In business and law, having a “fiduciary
responsibility” to someone is known as having a “duty of loyalty.” For example, auditors owe a
duty of loyalty to investors who rely upon the financial reports that the auditors certify. But
auditors are hired and paid directly by the companies whose reports they review. The duty of
loyalty an auditor owes to investors can be at odds with the auditor’s need to keep the company
– its client – happy, as well as with the company’s desire to look like a safe investment.
 Money Laundering
Money laundering tends to allocate dirty money around the world on the basis of avoiding
national controls and therefore tainted money tends to flow to countries with less stringent
controls. Money laundering has a major effect on the businesses that were used for the crime.
The integrity of the bank and their financial services are depended heavily on professionalism
and ethical standards. A reputation of integrity is one of the most valuable assets of any financial
business. People want to be able to trust the place of business where they are conducting their
own personal business. If a business is manipulated through money laundering schemes, then
the business itself is used by criminals and has become part of the criminal network. This could
be very damaging to how other financial institutions view the business, as well as the customers
who do business there. They many now look at this business as untrustworthy and this will cause
the business to lose money and customers because no one will ever want to do business there
again.
 Unfair Wages
Unfair wages make up the majority of employment lawsuits. They are more common than
other types of claims such as harassment or even disability claims. Unfair wage lawsuits are
usually based on two different areas of employment law: wage and hour laws
and discrimination Laws.
Unfair wage lawsuits based on wage and hour laws usually involve:
 Failure to Pay Minimum Wage: Federal and state laws require employers to pay workers at
least minimum wage. This can vary, as the minimum wage rate often goes up over time
 Withholding Overtime Pay or other wages: Failing to pay eligible workers their overtime pay
is a violation of employment laws. This can also include withholding benefits like retirement
funds or disability pay
  Misclassification of Employees: Only certain employees are eligible for overtime pay. For
example, “exempt” employees don’t get overtime pay. Misclassifying an employee as exempt
can lead to legal consequences and an unfair wages lawsuit

 Product Misrepresentation
Deceptive advertising is false advertising, and it is illegal. t is also unethical. Other kinds
of unethical advertising are neither deceptive nor illegal; however, they offend moral principles
of human conduct in terms of bad intent and effects. Deceptive advertising is adjudicated in the
courts. Ultimately, ethical advertising is regulated by societal norms of acceptable advertising
communications and the moral imperatives of advertisers.
 Multi-level Marketing and pyramiding
Pyramid or endless-chain distributor schemes ask people to make an investment and, in
return, grant them a license to recruit others who, in turn, recruit still others into the scheme. In
essence, the investor pays for the opportunity to receive compensation when his or her recruit
brings others into the scheme. The opportunity to recruit is the product. Such schemes are illegal
because they are unethical in two respects. They are (1) fraudulent, and they are (2) recruitment-
, rather than product-, centered businesses. Pyramid schemes are fraudulent because they
typically promise a large return in return for a small investment. Those who join a pyramid
scheme early often do make a great deal of money. Those who come in later, however, make
little or even lose money because there simply are not enough remaining people left to recruit
into the network.
 Insider Trading
Insider trading has managed to earn itself a dreadful name in the recent years. People
who engage in insider trading are thought to be completely devoid of ethical values. However,
not all individuals who engage in insiders trading are unethical; studies have shown that some
insider trading is useful to the investment society. Some researchers in philosophy, law and
economics have not decided whether insider trading should be penalized at all while others state
that it should be illegal in all situations. The best thing to do is to detach those who are illegally
harmed by insider trading. If such people exist, then obviously worded legislation could be passed
to stop any scheme from being faithful against these people and groups, while allowing non-
fraudulent transactions to be completed without dread of action. Until it can obviously be shown
that an insider trading fraudulently harms an individual, there should be no law or regulation
limiting the practice, since such limitations breach individual rights, it will also destroy the
competition between the people and the company, and will most likely have a negative market
response
 The Problem of Just Wage
The first ethical principle is that every working person possesses an inherent dignity and
deserves respect. All workers, no matter how high or low their skills or compensation, are
important and valued members of the institution. In fact, ethically, each person, no matter what
job they perform, is entitled to the same amount of respect as any other worker. The second
ethical principle is that each working person has the right to be able to support themselves and
their families by the fruits of their work. Few argue with the proposal that people who work full-
time should earn enough to support themselves and their families. That means people who work
full-time should earn at least a living wage. How much constitutes a living wage is open to
discussion, but most people of goodwill agree that part of being a good employer involves paying
 workers a living wage. While an employer has many obligations and paying fair wages is not their
only duty, it is certainly one of the most important.

 The Morality of Labor Strike

Ethics are the morals, the concepts, and ideals which we live by. The progress of a society
cannot be measured solely by the extent of its technological development. Economic realities,
are of course, fundamentally important But if the ethical values of a society do not measure up
to its technology, this very technology may well become an instrument for mass suicide the
paramount problem in this atomic age, is to a very great extent, an ethical one.
Within the labour movement, there are, broadly speaking, two main tendencies that are
as far apart as two worlds--the world of the slave who yearns to be free and the world of the
master who wants to keep him in chains What is right for the master is wrong for the slave. One
is conservative and opportunistic while the other is revolutionary and dynamic.
The ethics of the labour bureaucrats are those of the depraved business community of
which they consider themselves a part.
 The Morality of Advertising

Ethics in advertising is important, because by acting ethically with their advertising, a

company is being responsible towards the needs of the customer. Ethical advertising evens the
playing field for the consumer by giving them the information they need to make an informed
decision on what products to buy and how these products will enhance their lives--whether
they need the product or they just want that product.

Companies need to show they have morals when advertising to consumers, because
that makes consumers’ feel like the company cares about what they need. This shows that the
customer is protected by a company that is behaving in a way that makes a difference to the
community they work in. Companies need to work with the community in a way that is
sustainable and keeps all the stakeholders happy.

References:
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https://www.questia.com/library/sociology-and-anthropology/social-organization-and-community/social-values/social-responsibility
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