Name of discussants: Avegail G. Grafilo & Camille P.

Guetan
Subject: Good Governance and Social Responsibility
Topic: CHAPTER 4: BRINGING THE YARDSTICK INTO THE CORPORATE WORLD.

I.INTRODUCTION.
In the previous chapters, we have established that human beings are moral agents – that as free rational
beings, we are morally responsible for the consequences of our actions; and as socio-political beings, we
share in the common burden of making this world a better place of abode.
*Different Provisions of the 1987 Philippines Constitution.
• Article II, SECTION 11. The states values the dignity of every human person and guarantee full
respect for human rights.
• SECTION 12. The state recognizes the sanctity of family life and shall protect and strengthen the
family as a basic autonomous social institution. It shall equally protect the life of the mother and the life
of the unborn from conception. The natural and primary right and duty of parents in the rearing of the
youth for civic efficiency and the development of moral character shall review the support of the
Government.
• SECTION 14. The state recognizes the role of women in nation building, and shall ensure fhe
fundamental equality before the law of women and men.
• SECTION 15. The state shall protect and promote the right to health of the people and instill
consciousness among them.
• SECTION 16. The state shall protect and advance the right of the people to a balance and healthful
ecology in accord with the rhythm and harmony of nature.
• Article XIII, SECTION 1. The congress shall give highest priority to the enactment of measures that
protect and enhance the right of all the people to human dignity, reduce social, economic, and political
inequalities, and remove cultural inequalities by equitably diffusing wealth and political power for the
common good.
• SECTION 2. The promotion of social justice shall include the commitment to create economic
opportunities based on freedom of initiative and self-reliance.
One of these social forces where moral and social responsibility is becoming the nascent fad is the
Corporate World.
II.CORPORATE WORLD FROM THE LEGAL PERSPECTIVE.
*3 Basic Manners through which a person may conduct business in The Philippines.
A. SOLE PROPRIETORSHIP. A person personally conducts business under his name or a business
name. From a legal standpoint, a business of this kind has no personality separate and distinct from the
proprietor. In other words, in terms of liabilities, the owner and his business are one and the same. If the
business is sued, say fraud, then it is the owner who is actually being sued. The case is different in
partnership and corporation.
B. PARTNERSHIP. A partnership is defined under the Civil code of the Philippines (Art. 1767) as one
where two or more persons bind themselves to contribute money, property or industry to a common fund
with the intention of dividing the profits among themselves.
C. CORPORATION. Defined under the corporation code of the Philippines, is an artificial being created
by operation of law, having the right of succession and the attributes and properties expressly authorized
by law or incident to it’s existence.
III.BUSINESS ETHICS.
*Different Levels of Business Ethics.
A. MACRO LEVEL. The role of business in the national and international organization of society the
relative virtues of different political/social systems, such as free enterprise, centrally planned economies,
etc., International relationships and the role of business on an international scale.
B. THE CORPORATE LEVEL. Ethical issues facing individual Corporate entities (private and public
sector) when formulating and implementing strategies.
C. THE INDIVIDUAL LEVEL. The behavior and actions of individuals within organizations.
IV. WHY SHOULD CORPORATIONS BE GOOD?
Being ethical or socially responsible does not guarantee business success; as a matter of fact, it even
involves the risk of commercial loss – the risk of shelling out more than what comes in; of not being able
to gain considerable return in investing in charitable works. Other than this risk, there is also that cultural
impression that sometimes dishonesty can even hasten the pecuniary growth of one’s business – that
sometimes, cheating can helps. And when confronted with condemnatory eyes, the normal response
would be “everyone does it anyway “. Students cheat to pass the exam, businessmen cheat to pay less
taxes, employers cheat to give less to workers and employees cheat to get back at their unfair b David
Callahan defines cheating as “any action in which an individual breaks the rules to benefit his or her own
self-interest whether it is academically, professionally, or financially “. Callahan further state’s that
“cheating culture is supported by a `Winner Takes all` attitude. Each individual will do whatever it takes
to get ahead and win at every opportunity he or she has in life.
So if the incentive to cheat is equally enticing, although similarly risky as well, what else would motivate
corporations to be honest and ethical? Actually, the truth is, neither of the other factors in
entrepreneurship, such as effective management, respectable advertising, top-notch customer service, or
even highly trained cheating strategies, guarantee instant ascent to the Mt. Olympus of entrepreneurial
deities. So it is not a matter of whether it assures victory, but whether it contributes positively to
entrepreneurial success. In a highly competitive world, sometimes it takes but one good nuance in order
to set one business or corporation apart from all the rest. That nuance might be found in creating an
ethical environment within the corporation. Most business analyst are of the suggestion that there are at
least two positive results that a corporation can derive from such endeavor: the creation of good public
image and reputation and the fostering of committed employees to the cause of the corporation.
Good reputation is commonly being tagged with socially responsible businesses and corporations, and
according to some business analyst. Success for any business is ultimately measured in profits and losses,
and the socially responsible business generates the capital and revenues required to operate and stay in
business over the long haul. The socially responsible business must generate enough revenue to cover the
real cost of capital, the risks and uncertainties of future economic activity, and the needs of its workers
and pensioners.
THE FOUNDATION OF BUSINESS ETHICS: PRINCIPLES AND VALUES.
A .ACCOUNTABILITY – We shall take full responsibility for all our business decisions, actions/ in
actions, and conduct and shall perform our duties and functions with utmost responsibility, integrity,
honesty, loyalty and efficiency.
B. INTEGRITY – We shall act righteously, morally and legally. We shall uphold the simple truth that
‘honesty is the best policy’.
C. FAIRNESS – we shall uphold the value of justice and fair play among everyone we deal with
internally and externally, striving always to look for a win-win situation.
D. TRANSPARENCY – We shall uphold the value of truthfulness in everything we do coupled with
the quality of being open to scrutiny as we provide and disclose accurate material.
STANDARDS OF BUSINESS CONDUCT AND ETHICS
Below are the commitments of the company, its directors, officers and employees in their behavior and
various business dealings.
A. COMPLIANCE
1. Engage in honest conduct and comply with all applicable laws, rules and regulations, including
prohibitions on insider trading, both in letter and spirit.
2. Personally adhere to the standards and restrictions imposed by those laws, rules and regulations.
3. Avoid the direct or indirect commission of bribery and corruption of representatives of governments or
regulators to facilitate any transaction or gain any perceived or actual favor or advantage , excluding
permissible additional payments for routine governmental actors allowed by all applicable laws and
regulations.
B. COMPETITION AND FAIR DEALING
1. Avoid taking unfair advantage of anyone through manipulation, concealment, abuse of privileged
information, misrepresentation of material facts, or any unfair dealing practice.
2. Deal fairly with the Company’s customers, service providers, suppliers, competitors and employees.
C. CONFIDENTIAL OF INFORMATION AND PROPER USE OF PROPERTY
1. Maintain and safeguard the confidentiality of information entrusted by the company, its subsidiaries,
affiliates, customers, business partners, or such other parties with whom the company relates, except
when disclosure is authorized or legally mandated.
2. Follow company policy and applicable laws regarding business records retention. Ensure that records
are not altered concealed and destroyed.
3. Avoid any of the company’s securities or those of its subsidiaries and affiliates using price sensitive
information that is not normally available publicly, and obtained by reason of position, contract within, or
other relationship with the company.
4. Use company property and resources, including Company time, supplies and software, efficiently,
responsibly and only for legitimate business purposes.
5. Protect the assets of the Company from loss, damage, misuse or for legitimate business purposes.
D.CONFLICTS OF INTEREST AND CORPORATE OPPORTUNITIES.
1. Avoid any actual or apparent conflicts of interest between your private interest including the private
interest of a member of your family, and the interest of the company, unless you have obtained prior
approval by the appropriate approving authorities as designated in applicable policies of the company.
2. Avoid activities and interests that could significantly affect the objective performance of duties and
responsibilities in the Company, including business interests or unauthorized employment outside the
Company, the receipt from and giving of gifts to persons or entities with whom the company relates, as
well as insider dealing.
3. Be loyal the Company.
4. Advance the Company’s legitimate interest when the opportunity arises.
5. Refrain from the direct or indirect, grant or arrangements of loans to any director or officer, including
loans granted or arranged by the Company’s subsidiaries and affiliates, unless such grant or arrangement
is allowed by all applicable laws and regulations.
E. DISCLOSURE
1. Publicly disclose all material information, including earnings, results, strategy, related party and off-
balance sheet transactions.
2. To the extent relevant to your area of responsibility, comply with the Company’s disclosure controls
and procedures and internal controls to ensure that (i) financial and non-financial information is properly
recorded, processed, summarized and reported and (ii) the Company’s public reports and documents,
including the reports that the Company files with the Philippine Stock Exchange, the New York Stock
Exchange, the Philippine and the U.S Securities and Exchange Commissions, comply in all material
respects with the Applicable laws and rules.
3. Each director or officer, to the extent appropriate within his or her area of responsibility, should consult
with other appropriate steps regarding the above mentioned disclosures with the goal of making full, fair,
accurate, timely and understandable disclosure.
4. Be familiar with the disclosure requirements applicable to the Company as well as the business and
financial operations of the Company.
5. Do not knowingly misrepresent, or cause others to misrepresent, facts about the Company to others,
whether inside or outside the company’s, including the Company’s independent auditors, governmental
regulators and self- regulatory organizations.
6. Properly review and critically analyze proposed disclosure for accuracy and completeness.
7. Assess the effectiveness of the disclosure controls actions with regard to any identified weaknesses or
deficiencies.
F.RISK MANAGEMENT
1. Restrict or minimize undertaking of risk so as not to jeopardize shareholder value.
2. Fully assess and manage risks involved in undertaking strategies, acquisitions,activities,products,
services and other business endeavors of the Company.
3. Keep business and accounting records which accurately reflect the financial position of the business
and issue financial statements to ensure transparency of information.
4. Ensure an independent audit of the Company’s financial statements by external auditors selected by
they Company’s audit Committee.
5. Communicate truthfully and regularly business policies, achievements and prospects
*THE COMPANIES VALUES
The code should be consistent with the values espoused by the company.
1.TEAMWORK
2. INTEGRITY
3. RELIABILITY
4. COSTUMER FOCUS
5. RESULTS – ORIENTED
*THE STANDS OF THE CODE OF CONDUCT.
Below are the \principles and standards of action guiding all employees, directors and officers towards
their relationship to their position, to their fellow employees and of the company’s resources.
1. COMPLIANCE
2. DECORUM
3. ATTITUDES WITH SUPERIORS
4. MANAGEMENT OF SUBORDINATES
5. MANAGING DECISIONS
6. PROPER USE OF PROPERTY
* FAIR DEALING.
Transparency would mean the disclosure of information pertinent to the line of work.
1. No employee shall exercise his power and position to side track deals and agreements in favor of any
entity that signifies intention to conduct business with the company.
2. No employee shall be exercised by dealing with all franchisees, suppliers and the like in manner of
giving equal opportunities.
3. Fairness shall be exercised by dealing with all franchisees, suppliers and the like in manner of giving
equal opportunities.
*CONFLICT OF INTEREST AND CORPORATE OPPORTUNITIES
1. Every employee should uphold the companies interest at all times and integrate it with its own personal
interest without prejudice the former.
2. Avoid engagement, participation or involvement of oneself, directly or indirectly in any transaction.
3. Avoid engaging in an activities such as soliciting and accepting gifts and entertainment; and accepting
cash or its equivalent from vendors, suppliers, contractors or any third party.
4. Employees regardless of rank shall act with prudence and careful judgement in their relations with all
vendors, suppliers, contractors, and to any third party providers.
5. Uphold ones integrity and that if the Company by following procedures in dealing with co-employees,
government agencies and etc.
6. The company’s interest shall reign supreme in all the business decisions and actions.
*DISCLOSURE
1. All directors and employees regardless of rank shall disclose all their businesses, relationships, and
affinities among franchisees,merchandisers,providers and other third party entities dealing with the
company in aid of transparency in bidding and other procedures that requires compliance.
2. Further, they shall follow procedures regarding disclosure of information on business guidelines and
requirements unless otherwise disclosure will lead to business loss.
3. Each director, officer or employees shall extend all appropriate and accurate information that will lead
to a sound decision.
4. Do not misrepresent or cause others to misrepresent or himself or his position as well as facts about the
company which could damage the reputation of the organization of its officers causing legal action
against the company.