What is corporate governance?discuss its principles and significance?

Ans. Corporate governance is the system of rules, practices, and processes by

which a firm is directed and controlled. Corporate governance essentially involves
balancing the interests of a company's many stakeholders, such as shareholders,
senior management executives, customers, suppliers, financiers, the government,
and the community.

Principles of corporate governance-

 Accountability. The Code provides for accountability of the Company's

Board of Directors to all shareholders in accordance with applicable law and
provides guidance to the Board of Directors in making decisions and monitoring
the activities of the executive bodies.
 Fairness. The Company undertakes to protect shareholders' rights and
ensure equal treatment of shareholders. The Board of Directors shall give all
shareholders the opportunity to obtain effective redress for violations of their
rights.
 Transparency. The Company shall provide timely, accurate disclosure of
information about all material facts relating to its activities, including its financial
situation, social and environmental indicators, performance, ownership structure
and governance of the Company, as well as free access to such information for all
stakeholders.
 Responsibility.The Company recognizes the rights of all interested parties
permitted by applicable law, and seeks to cooperate with such persons or
companies for their own development and financial stability.

However, there are also broader benefits of good governance that can have a much
wider and far-reaching positive impact on the business, as follows:
  Culture — consistently good governance as an input at all levels creates as
an output a culture of excellence. Those that ‘swim against the tide’ stand
out against the ‘blueprint’ or ‘DNA’ of the organisation. The leadership’s
behaviour defines the behaviour of the workforce, and it becomes far easier
in such circumstances to fit in with the defined culture.
 Reputation — good governance delivers good products, which, in turn, lead
to good business performance. The reputation of a company can make or
break it in the market.
 Clarity — all organisations have issues, problems and nonconformities. An
organisation with good governance can isolate these, reducing the impact on
the market and very often containing the risk internally.
 Financial sustainability — good governance reduces the threat of safety,
legal, performance and warranty concerns that can severely impact an
organisation and its stakeholders and/or interested parties. These
stakeholders and/or interested parties may be customers, directors, staff,
suppliers, shareholders and even whole communities.
2)Discuss the growth factor in corporate governance in india and its
significance?
Ans-The need for corporate governance has arisen because of the increasing
concern about the non-compliance of standards of financial reporting and
accountability by boards of directors and management of corporate inflicting heavy
losses on investors.The collapse of international giants likes Enron, World Com of
the US and Xerox of Japan are said to be due to the absence of good corporate
governance and corrupt practices adopted by management of these companies and
their financial consulting firms.

The failures of these multinational giants bring out the importance of good
corporate governance structure making clear the distinction of power between the
Board of Directors and the management which can lead to appropriate governance
processes and procedures under which management is free to manage and board of
directors is free to monitor and give policy directions.In India, SEBI realised the
need for good corporate governance and for this purpose appointed several
committees such as Kumar Manglam Birla Committee, Naresh Chandra
Committee and Narayana Murthy Committee.

Significance same in question nom.1

3)what is the ethics in marketing?substaintiate it with 4p’s of marketing?

Ans-"Marketing is human activity directed at satisfying needs and wants through

exchange process". Attribute of marketing is to give the satisfaction of the needs of
consumers.Ethics are explained as the moral principles and values that oversee the
actions and decisions of a person or group. They serve as guidelines to act rightly
and justly when faced with ethical problem. Ethics in marketing denotes to the
practice of marketing in business in an ethical and moral way. It means
intentionally applying standards of justice and represents the company to others.
While the objective of any business is to be money-making, if a company has to
use counterfeit advertisement, or misleading or objectionable marketing tactics to
attain it, it's really not running a successful marketing campaign.

some marketing practices are clearly unethical. For example, if we lie about
what our product does and the consumer ends up finding out the reality after
purchase, we’re creating unhappiness. We’re doing harm. If we tell the truth about
our product or service and set realistic expectations, our customers will be happier
because we meet their expectations. Behaving in an ethical manner is the
cornerstone of long-term profitability.

-Pricing Strategy Ethics

Price collusion can be a major source of ethical pressure in many industries, and
artificial price-fixing is illegal in a wide range of countries. Price collusion exists
when a number of competitors agree to set prices at a certain level, bypassing the
natural market forces of supply and demand and creating an unfair advantage over
consumers. Artificially inflating prices of necessary consumer goods such as
gasoline or basic food goods can breach consumers' ethical expectations, as well.
Setting different price points for different consumers for the same goods can be
considered an unethical move and can land a company on the wrong side of the
law and consumer sentiment.
Product Placement Ethics
End-caps, point-of-sale displays and demo kiosks are all examples of positioning
techniques that are inherently harmless, but which can be used in arguably
unethical ways. Candy distributors, for example, are known for placing bright
displays at children's eye level right before checkout counters in grocery stores,
knowing that the combination of children's pleas and parents' stress while standing
in line will result in increased sales. There is nothing illegal about this tactic, but
some consumers consider such emotional manipulation to be highly unethical,
especially when it involves children.
Ethics and Promotions
Promotions are designed to boost short-term sales by providing irresistible value
propositions to consumers. Coupons, holiday sales events, mail-in rebates and give
aways all fall under the promotions category. The "bait and switch" tactic is widely
considered unethical, yet many companies still practice this promotions technique.
With bait and switch, a company advertises a significant discount on a valuable
product, but stocks only a small number of that item in stores.
Other Ethical Considerations
Other areas of marketing present their own distinct ethical challenges. The areas of
advertising and sales serve as prime examples. Advertising ethics are highly
regulated by law when it comes to honesty, discrimination and young audiences,
but advertisers need to go the extra mile to avoid offending viewers even within
the boundaries of the law.

4)what is ethics in human resource?discuss it various issues and measures for

ensuring safety in employees?

Ans-Human resource management deals with manpower planning and

development related activities in an organization. Arguably it is that branch of
management where ethics really matter, since it concerns human issues specially
those of compensation, development, industrial relations and health and safety
issues. Understanding the importance of ethics in human resources is crucial for
any business owner, whether in a local startup or a multinational powerhouse.

the seven major issues faced by human resource, i.e, (1) Employment Issues, (2)
Cash and Incentive Plans, (3) Employees Discriminations, (4) Performance
Appraisal, (5) Privacy, (6) Safety and Health, and (7) Restructuring and layoffs.
1. Employment Issues:HR professionals are likely to face maximum ethical
dilemmas in the areas of hiring of employees.
2. Cash and Incentive Plans:Cash and incentive plans include issues like basic
salaries, annual increments or incentives, executive perquisites and long term
incentive plans:
3. Employees Discriminations:A framework of laws and regulations has been
evolved to avoid the practices of treatment of employees on the basis of their caste,
sex, religion, disability, age etc. No organisation can openly practice any
discriminatory policies, with regard to selection, training, development, appraisal
etc.
4. Performance Appraisal:Ethics should be the basis of performance evaluation.
Highly ethical performance appraisal demands that there should be an honest
assessment of the performance and steps should be taken to improve the
effectiveness of employees.
5.Safety and health-Industrial work is often hazardous to the safety and health of
the employees. Legislations have been created making it mandatory on the
organisations and managers to compensate the victims of occupational hazards.
Ethical dilemmas of HR managers arise when the justice is denied to the victims
by the organization.

measures:-Unethical behavior in the workplace can lead to an unhealthy

environment, often filled with mistrust and spite.so the important measures are-

1. Training employees well- Comprehensive training is a must for preventing

workplace injury. Make sure that all of your employees have access to – and
complete – all safety training for their positions.

2. Rewarding employees for safe behavior-Rewards are an easy way to encourage

workplace safety. Giving out small rewards to employees who follow safety
policies keeps them engaged, which can make a big difference in reducing
workplace injuries.

3. Making sure employees have the right tools and have regular equipment
inspections-The right tools and equipment create a better product and a safer work
environment. It’s also important that all equipment is cleaned, serviced, and
inspected regularly. Machine malfunctions are one of the most dangerous
workplace hazards.
4. Encouraging stretch breaks-Stretch breaks are an easy way to improve
workplace ergonomics and employee health. Taking even five minutes to stretch
can ease muscle tension and loosen joints, reducing the potential for repetitive
motion injuries. Active movements have been shown to be more effective than
passive stretching alone.

5)shot notes on 1)anglo American model 2)Japanese model

Ans) anglo American model-Under the Anglo-American Model of corporate

governance, the shareholder rights are recognised and given importance. They
have the right to elect all the members of the Board and the Board directs the
management of the company. Some of the features of this model are:

 This is shareholder oriented model. It is also called Anglo-Saxon approach

to corporate governance being the basis of corporate governance in Britain,
Canada, America, Australia and Common Wealth Countries including India
 Directors are rarely independent of management
 Companies are run by professional managers who have negligible ownership
stake. There is clear separation of ownership and management.
 Institution investors like banks and mutual funds are portfolio investors.
When they are not satisfied with the company’s performance they simple
sell their shares in market and quit.
 The disclosure norms are comprehensive and rules against the insider
trading are tight
 The small investors are protected and large investors are discouraged to take
active role in corporate governance.
Japanese model-The Japanese model involves a high level of ownership by
banks and other affiliated companies and "keiretsu," industrial
groups linked by trading relationships and cross-shareholding. The key players
in the Japanese system are the bank, the keiretsu (both major inside
shareholders), management and the government. Outside shareholders have little
or no voice and there are few truly independent or outside directors. The board
of directors is usually made up entirely of insiders, often the heads of the
different divisions of the company. Japanese companies raise significant part of
capital through banking and other financial institutions. Since the banks and other
institutions stakes are very high in businesses, they also work closely with the
management of the company. The shareholders and main banks together appoint
the Board of Directors and the President. In this model, along with the
shareholders, the interest of lenders is recognised.
German model-This is also called European Model. It is believed that workers are
one of the key stakeholders in the company and they should have the right to
participate in the management of the company. The corporate governance is
carried out through two boards, therefore it is also known as two-tier board model.
These two boards are:

Supervisory Board: The shareholders elect the members of Supervisory Board.

Employees also elect their representative for Supervisory Board which are
generally one-third or half of the Board.

Board of Management or Management Board: The Supervisory Board appoints

and monitors the Management Board. The Supervisory Board has the right to
dismiss the Management Board and re-constitute the same.

5)Discuss role of auditors and board of directors in corporate governance?

Ans)role of auditors-Corporate governance refers to the way a company directs

and controls its institutional systems, ethics and accounts. It focuses on promoting
transparency and fairness within establishments and organizations by monitoring
performance and ensuring accountability. In that regard, external auditors serve as
one of the primary protectors of corporate governance in any organization.

Represent Interest of Shareholders-One of the primary roles of external auditors

in corporate governance is protecting the interests of shareholders. This is possible
because external audition reports are conducted independent of the company’s
influence. External auditors report the state of a company's finance and attest to the
validity of financial reports that may have been released.
Promote Accountability-External auditors may introduce measures and policies
designed to compel accountability in the workplace. For instance, auditors could
recommend penalties for officers who manipulate financial statements by inflating
figures or cooking accounting numbers.

Risk Assessment and Mitigation Planning-External auditors help promote

corporate governance by conducting period risk assessment. Auditors review the
security measures that a company has in place against corporate fraud or
corruption.
Crisis Management-External auditors can help ensure good corporate governance
by developing efficient crisis-management plans to be used in the event of
allegations of fraud or corruption. The plan typically involves assigning
responsibilities to different administrative officials. This way, if the company
becomes involved in a financial crisis, officials have an active plan that they can
use in sustaining confidence among investors.
Maintain Strong Relationship with Regulators-The efforts of an external auditor
help foster a good relationship with regulators. Most regulators are supportive of
companies and agencies that appear to have transparent operations. External
auditors evaluate the organization of a company for compliance with regulations.
Regulators are also more likely to trust company disclosures after an auditor attests
to them.

()Role of board of directors- the board of directors bears a legal responsibility to

govern a corporation. Fulfilling that responsibility encompasses many
individual roles and responsibilities. Each board member brings different strengths,
talents, and abilities to the board. When board members merge their skills toward
the mission and vision of an organization, it creates a synergy that makes the whole
board greater than the sum of each individual’s contribution. Serving on a board
requires time and dedication.

Establishing the Organization’s Mission and Purpose-Every board of directors

gets its direction from the organization’s vision and mission. The vision is what the
organization wants to see happen. The mission is the action plan to accomplish the
vision. Because virtually everything the board does centers around the mission and
vision, the board of directors should take great care in forming mission and vision
statements that encompass the organization’s goals.
Organizational Planning-Board members spend the bulk of their time in
organizational planning. They determine and monitor the organization’s products,
services, and programs. In addition, they keep up to date on competitors and
developments in the organization’s field. Board members should periodically
review the strategic plans and review whether goals are being met.

Monitoring and Managing Financial Resources-Board members should learn

how to read a financial statement. They don’t need to be accounting experts, but
they should have a good idea of how much money is coming in and how much is
going out. Board members should monitor funds and spending categories, because
they have a collective responsibility for fiscal expenditures to their shareholders.

Serve on Committees-Board members should have a willingness to serve on

committees or task forces and take on special assignments, as necessary. Board
members should mentor their peers on how to chair a committee and present
committee reports to the rest of the board.

Maintaining Integrity-Responsible board members follow conflict of interest

policies as set forth in the organization’s by-laws. They maintain confidentiality
regarding sensitive matters and other private board matters.

6)define CSR?discuss various activities showing csr?

Ans)Corporate Social Responsibility is a management concept whereby
companies integrate social and environmental concerns in their business
operations and interactions with their stakeholders. CSR is generally understood as
being the way through which a company achieves a balance of economic,
environmental and social imperatives (“Triple-Bottom-Line-  Approach”), while at
the same time addressing the expectations of  shareholders and stakeholders. In this
sense it is important to draw a  distinction between CSR, which can be a strategic
business management concept, and charity, sponsorships or philanthropy. Even
though the  latter can also make a valuable contribution to poverty reduction, will
directly enhance the reputation of a company and strengthen its brand.
The following activities can be performed by a company to accomplish its CSR
obligations:

 Eradicating extreme hunger and poverty

 Promotion of education
 Promoting gender equality and empowering women
  Reducing child mortality
 Improving maternal health
 Combating human immunodeficiency virus, acquired, immune deficiency
syndrome, malaria and other diseases
 Ensuring environmental sustainability,
 Employment enhancing vocational skills, social business projects
 Contribution to the Prime Minister’s National Relief Fund or any other fund
set up by the Central Government or the State Governments for socio-
economic development, and
 Relief and funds for the welfare of the Scheduled Castes, the Scheduled
Tribes, other backward classes, minorities and women and such other
matters as may be prescribed.
 Importance to Local Areas and Neighborhoods-Under the terms of
Companies Act, preference must be given by companies in its CSR activities
to local areas and the areas where the company operates. Company may
possibly also choose to link with 2 or more companies for fulfilling the CSR
activities provided that they are competent to report individually. The CSR
Committee will also prepare the CSR Policy in which it includes the projects
and programmes which is to be undertaken, organize a list of projects and
programmes which a company plans to embark on during the execution year
and also focus on integrating business models with social and environmental
priorities and process for the reason of creating share value. The company
can in addition make the annual report of CSR activities in which they
declare the average net profit for the 3 financial years and also approved
CSR expenditure but if the company is not capable to spend the minimum
required expenditure the company has to provide the reasons in the Board
Report for non-compliance so that there are no related penal provisions.
8)Role of ethics in corporate governance?how ethics under corporate
governance is meaningful justify?
Ans) Business ethics is considered as heart of corporate governance. Business
ethics is noting but a process for integrating values such as honesty, trust,
transparency and fairness into its policies, practices and decision making. It is
essential and vital component of corporate governance. For the smooth journey of
good corporate governance, business ethics acts as driver. It is the application of
ethical values to the business behavior. It applies to any and all aspects, from board
room strategies and how companies treat their suppliers to sales techniques and
accounting practices. Business ethics applies to the conduct of individuals and to
the conduct of the organization as a whole (Bose Iti: 2004). Business ethics relates
to how any company conducts its business in order to make the profit.
Advantages of adopting business ethics in Corporate Governance- Corporate
governance is on everyone’s lips but the parameters and implications are still a
subject of debate. It is not just a question of process but of mindset and values
among all stakeholders Adopting ethics can help to build reputation of businesses.
Promoting reputation can help in building customer loyalty and increase in
revenue.
Customers are becoming increasingly aware of their rights and they value ethical
practices in corporate. In such cases having ethical culture in corporate helps to
regain customers ethical values play an important role 4. Attracting talented
workforce and employees as well as improved performance of existing employees
helps in increasing productivity 5. Compliance with regulations e.g. labour laws
and environment etc. 6. Collaboration with other firms both domestically and
internationally. 7. For the developing economies seeking to integrate with the
global economy, corporate governance is of critical importance, as it is the key
parameter used for evaluation by global investors or strategic partner and
significant factor in improving economic efficiency and growth. 8. This could be
enable companies to project themselves internationally but keep customers and
suppliers happy closer to home. 9. Ethics help to eliminate the financial and
business risks a company is exposed to due to unclean business negotiation and
practices and as more important factor in decision making process. 10. A
systematic approach to governance and ethics remains very much a work in
process for many companies. 10. It is tool to eliminate fraud, bribery, resolving or
removing conflicts of interest and equal treatment of shareholders. Ethical
approach helps upholding the company’s good name and reputation.
9)Discuss four stages continuum model csr with examples?

Ans)

The four responsibilities displayed on the pyramid are:

ECONOMIC
  This is the responsibility of business to be profitable
 Only way to survive and benefit society in long-term

LEGAL

 This is the responsibility to obey laws and other regulations

 E.g. Employment, Competition, Health & Safety

ETHICAL

 This is the responsibility to act morally and ethically

 With this responsibility, businesses should go beyond narrow requirements
of the law
 E.g. Treatment of suppliers & employees

PHILANTHROPIC

 This is the responsibility to give back to society

 The responsibility is discretionary, but still important
 E.g. charitable donations, staff time on projects

Carroll's CSR Pyramid is a simple framework that helps argue how and why
organisations should meet their social responsibilities.

The key features of Carroll's CSR Pyramid are that:

 CSR is built on the foundation of profit – profit must come first

 Then comes the need for a business to ensure it complies with all laws &
regulations
 Before a business considers its philanthropic options, it also needs to meet
its ethical duties

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.

2018 BECG

1)What do you understand by management integrity?discuss various types of

management integrity?

Ans) Management integrity is the "tone at the top," the attitude of management
toward internal controls and the example that their attitudes set for employees
who sit lower in the corporate hierarchy. A lack of management integrity
presents a risk that a manager will misappropriate assets or game a financial
statement in pursuit of a larger bonus. Without managerial integrity, the
employees may not perform at their highest levels. Indeed, motivating the
employees can be a make-or-break mark for a successful manager.

Types-

Personal integrity-Personal Integrity is the quality of being truthful and honest with
yourself and others, of intentionally aligning personal behaviors and actions to be
congruently aligned with your own Personal Value System, moral principles, and
ethics. 

Organizational integrity-Organizational integrity refers to the ethical integrity of

the individual actors, the ethical quality of their interaction as well as that of the
dominating norms, activities, decision making procedures and results within a
given organization.

Functional integrity-It is categorized into two types individual and groups. all these
functions are interrelated and inter dependent to each other when all are
functioning properly to achieve the objectives,targets and goals for the company.it
is called functional integrity.

Stakeholder integrity-
management,financer,employees,shareholders,suppliers,community,society.all
these comes under stakeholder integrity.all of them have their own responsibility
and duties towards the organization and when they do their task in proper loyalty
and honesty,it is called stakeholder integrity.

Ecological integrity- work place + working population within the organization.all

of them are contributing meaningfully in achieving the objectives for the
organization.all of them developing an environment and culture wherein they are
helping and supporting each other.it is called ecological integrity.

Ethical integrity-Building ethical considerations into a business strategy via the

planning process is an important element of ethics management. Strategy lays the
foundation for how an organization carries out its operations. Building ethics into
strategic planning is important to ensure that every facet of the organization is
aligned with the ethos and values of the broader organization.

2)What is the need of ethical decisions for managers?Enumerate the roots of

unethical behavior in an organization?

Ans) Managerial ethics is important for every company, because people will follow
what leaders do. Even if a company has ethics policies in place, when top leaders
ignore these standards, it resonates throughout the company.

Organizations place a considerable amount of trust in their management. From the

CEO on down, managers have a responsibility in ensuring that both they and their
subordinates behave ethically and in the best interest of both primary and
secondary stakeholders.

As a manager, it is considered one of their primary responsibilities to both

understand and practice ethical behavior in order to: meet the company's
 expectations for conduct, set an example of appropriate behavior for subordinates,
and to minimize the ambiguity that often comes along with the practice of ethics.

Therefore, it is essential for managers to understand Codes of Conduct, Codes of

Ethics, or any other official set of rules and to attain and keep records of related
documentation laying out the expectations and guidelines for ethical behavior and
smooth running of the organization.

Roots of unethical behavior-

 Poor ethical leadership

 Poor communications
 Pressure to balance work and family
 Pressure to meet sales or profit goals
 Lack of management support
 Resentment to the workplace and retaliation
 Company policies
 Little or no recognition of achievements
 Long work hours, heavy workload
 Personal financial worries
 Insufficient resources

3)Diff. beween social responsibility and social responsiveness?Discuss the

various CSR initiatives usually taken by the corporate?

Ans)(suggstn-write in comparision table) Definition-Social responsibility refers to

the moral or ethical duty an individual and or a social entity as members of a
society to behave in a way that will not harm, but benefit the society. Social
responsiveness, on the other hand, refers to the manner in which a person/ an entity
can respond to a social need and contribute to the welfare of the others as well as to
the improvement of the society and the environment. Thus, this is the
main difference between social responsibility and social responsiveness.

Nature-Social responsibility is acting and behaving in a way that will not harm but
benefit others. On the other hand, social responsiveness is working towards the
welfare of others by contributing to addressing existing social issues. Hence, this is
another difference between social responsibility and social responsiveness.
Aim-Their aims is another difference between social responsibility and social
responsiveness. The main aim of social responsibility is to be accountable for the
betterment of society and the environment by not committing any acts that will
harm others as well as destroy the environment. On the other hand, the main aim of
social responsiveness is to be able to contribute to the welfare of others and the
betterment of the society and environment by addressing some of the critical social
problems in ways such as doing volunteering activities, environment conservation
campaigns, etc

Various CSR initiatives-.listed n 2017 question paper(already written in q nom.6)

4)Explain the rationale behind csr?discuss the various dimensions of social

responsibility?

Ans) Corporate Social Responsibility initiatives benefit both the company as

well as the environment (ecological and social) in which they live in.

Improves Brand Value-Being socially responsible brings recognition  into

the company. It shows that your company is more than just profits. More
people start knowing about your company and the good work that it is doing.
Builds Customer Loyalty-A research  shows that 55 percent of consumers
are willing to pay more for products from socially responsible companies. the
customers want to feel that they are a part of something. Even if not directly,
they feel good to be part of a company with a vision and the willingness to do
good.

Engages Millennials-“7 in 10 young adults consider themselves social

activists.” Everyone wants to feel they are part of a bigger cause that helps
shape lives.

Helps Attract and Retain Talent-When employees feel they are part of an
organization that is more than just about profits, they’ll definitely want
to stick around .

Increases Employee Engagement-CSR requires employee assistance. Right

from designing and developing the CSR program to actually volunteering for
a cause. So, employees are included in such important events, they feel
valued and appreciated. It helps improve your relationship with them, helps
build the team’s dynamics and increases the overall engagement level  of the
workforce.

Various dimensions of social responsibility:-

Environmental- The environmental dimension of corporate social responsibility
refers to your business's impact on the environment. The goal, as a socially
responsible company, is to engage in business practices that benefit the
environment.

Social-The social dimension of corporate responsibility involves the relationship

between your business and society as a whole.

Economic-The economic dimension refers to the effect that corporate social

responsibility has on the finances of your company. In an ideal world, where
corporate social responsibility had no costs, there would be no reason to limit it.
But in the real world it is important to recognize the financial impact that these
actions have and to balance being a good corporate citizen with making a profit.

Stakeholder-The stakeholders are all of the people affected by your company's

actions. These include employees, suppliers and members of the public. When
considering the stakeholder dimension of corporate social responsibility, consider
how your business decisions affect these groups.

 Voluntariness-Actions that fall into the voluntariness dimension are those that
you are not required to do. These actions are based in what your company believes
is the correct thing to do.

5)Discuss the role and responsibilities of a business firm towards its various
stakeholders with suitable examples?
Ans)Responsibility to employees- An organization’s first responsibility is to
provide a job to employees. Keeping people employed and letting them have time
to enjoy the fruits of their labor is the finest thing business can do for society.
Beyond this fundamental responsibility, employers must provide a clean, safe
working environment that is free from all forms of discrimination. Companies
should also strive to provide job security whenever possible.
Responsibility to customers- To be successful in today’s business environment, a
company must satisfy its customers. A firm must deliver what it promises, as well
as be honest and forthright in everyday interactions with customers, suppliers, and
others.
Responsibility to society- A business must also be responsible to society. A
business should provides a community with jobs, goods, and services. It should
also pays taxes that go to support schools, hospitals, and better roads.
Responsibility to investors- Companies’ relationships with investors also entail
social responsibility. Although a company’s economic responsibility to make a
profit might seem to be its main obligation to its shareholders, some investors
increasingly are putting more emphasis on other aspects of social
responsibility.Some investors are limiting their investments to securities (e.g.,
stocks and bonds) that coincide with their beliefs about ethical and social
responsibility. This is called social investing. For example, a social investment
fund might eliminate from consideration the securities of all companies that make
tobacco products or liquor, manufacture weapons, or have a history of being
environmentally irresponsible.
Corporate philantrophy- Companies also display their social responsibility
through corporate philanthropy. Corporate philanthropy includes cash
contributions, donations of equipment and products, and support for the volunteer
efforts of company employees.

6)Shot notes on (i)institutionalization of ethics (ii)code of ethics ?

Ans)code of ethics-A code of ethics is a guide of principles designed to help
professionals conduct business honestly and with integrity. A code of ethics
document may outline the mission and values of the business or organization, how
professionals are supposed to approach problems, the ethical principles based on
the organization's core values, and the standards to which the professional is held.
The fundamental principles of code of ethics are as follows-

 Act with integrity, competence, diligence, respect and in an ethical manner

with the public, clients, prospective clients, employers, employees,
colleagues in the investment profession, and other participants in the global
capital markets.
 Place the integrity of the investment profession and the interests of clients
above their own personal interests.
 Use reasonable care and exercise independent professional judgment when
conducting investment analysis, making investment recommendations,
taking investment actions, and engaging in other professional activities.
 Practice and encourage others to practice in a professional and ethical
manner that will reflect credit on themselves and the profession.
 Promote the integrity and viability of the global capital markets for the
ultimate benefit of society.
 Maintain and improve their professional competence and strive to maintain
and improve the competence of other investment professionals.

7)How ethics can make corporate governance more meaningful?Discuss

the various corporate governance issues?

Ans) ethics can make corporate governance more meaningful-(written in

previous)

Corporate governance directly impacts the profits and reputation of the company, and
having poor policies can expose the company to lawsuits, fines, reputational damage,
and loss of capital investment.so the various issues are as follows:

CONFLICTS OF INTEREST-Avoiding conflicts of interest is vital. A conflict

of interest within the framework of corporate governance occurs when an
officer or other controlling member of a corporation has other financial interests
that directly conflict with the objectives of the corporation. For example, a
board member of a solar company who owns a significant amount of stock in an
oil company has a conflict of interest because, while the board he or she serves
on represents the development of clean energy, they have a personal financial
stake in the success of the oil industry. When conflicts of interest are present,
they deteriorate the trust of shareholders and the public while making the
corporation vulnerable to litigation.

OVERSIGHT ISSUES-Effective corporate governance requires the board of

directors to have substantial oversight of the company’s procedures and
practices. Oversight is a broad term that encompasses the executive staff
reporting to the board and the board’s awareness of the daily operations of the
company and the way in which its objectives are being achieved.
 ACCOUNTABILITY ISSUES-Accountability is necessary for effective
corporate governance. From the top-level executives to lower-tier
employees,each level and division of the corporation should report and be
accountable to another as a system of checks and balances.

TRANSPARENCY-To be transparent, a corporation must accurately report their

profits and losses and make those figures available to those who invest in their
company. Overinflating profits or minimizing losses can seriously damage the
company’s relationship with stockholders in that they are enticed to invest under
false pretenses. A lack of transparency can also expose the company to fines from
regulatory agencies.

ETHICS VIOLATIONS-Members of the executive board have an ethical duty to

make decisions based on the best interests of the stockholders. Further, a
corporation has an ethical duty to protect the social welfare of others.

8)Discuss the role of board in ensuring better corporate governance practices?

Ans) (written in previous)

9)’’Audit failure leads to corporate scams” justify the statement by

elaborating the roles and responsibilities of an auditor?

Ans) The responsibility of audit committee in the area of corporate governance is

to provide assurance that the corporation is in rational compliance with relevant
laws and regulations, is conducting its affairs fairly, and is maintaining effective
controls against employee conflict of interest and fraud. The auditor should
perform their duties with extreme care and vigilance to ensure that there is no
illegal or improper transaction.

These are some more important roles and responsibilities of an auditor in a

organization-(copy from previous)

10)Shot notes on-(i)SEBI guidelines (ii) OECD ?

Ans) Securities and Exchange Board of India (SEBI) is a statutory regulatory body
entrusted with the responsibility to regulate the Indian capital markets. SEBI was
founded on April 12, 1992, under the SEBI Act, 1992. Headquartered in Mumbai,
India. The objective of SEBI is to ensure that the Indian capital market works in a
systematic manner and provide investors with a transparent environment for their
investment.

SEBI GUIDELINES:-

 Promoting and regulating self-regulatory organizations.

 Prohibiting fraudulent and unfair trade practices relating to securities
markets.
 Promoting investors’ education and training of intermediaries of securities
markets.
 Registering and regulating the working of stock brokers, sub-brokers, share
transfer agents, bankers to an issue, trustees of trust deeds, registrars to an
issue, merchant bankers, underwriters, portfolio managers, investment
advisers and such other intermediaries who may be associated with
securities markets in any manner.
 Registering and regulating the working of venture capital funds and
collective investment schemes, including mutual funds.
 Levying fees or other charges for carrying out the purposes of this section.

(ii) OECD-

The Organization of Economic Cooperation and Development released its first set
of corporate governance principles in 1999. The principles were developed and
endorsed by the ministers of OECD  in order to help OECD and Non-OECD
governments in their efforts to create legal and regulatory frameworks for
corporate governance in their countries.

The six OECD Principles are:

 Ensuring the basis of an effective corporate governance framework

 The rights of shareholders and key ownership functions
 The equitable treatment of shareholders
 The role of stakeholders in corporate governance
 Disclosure and transparency
 The responsibilities of the board
Ensure the basis of an effective corporate governance framework-The
corporate governance framework should promote transparent and efficient markets,
be consistent with the rule of law and clearly articulate the division of
responsibilities among different supervisory, regulatory and enforcement
authorities.

The rights of shareholders and key ownership functions-The corporate

governance framework should protect and facilitate the exercise of shareholders’
rights.

The equitable treatment of shareholders-The corporate governance framework

should ensure the equitable treatment of all shareholders, including minority and
foreign shareholders. All shareholders should have the opportunity to obtain
effective redress for violation of their rights.

The role of stakeholders in corporate governance-The corporate governance

framework should recognize the rights of stakeholders established by law or
through mutual agreements and encourage active co-operation between
corporations and stakeholders in creating wealth, jobs, and the sustainability of
financially sound enterprises.

Disclosure and transparency-The corporate governance framework should ensure

that timely and accurate disclosure is made on all material matters regarding the
corporation, including the financial situation, performance, ownership, and
governance of the company.

The responsibilities of the board-The corporate governance framework should

ensure the strategic guidance of the company, the effective monitoring of
management by the board, and the board’s accountability to the company and the
shareholders.

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