epee een dot vere mea ae a CONCEPTS OF GOOD GOVERNANCE “the concept of good governance has become, # BUZzWord ‘around the world in recent times. Currently the term governance hay ‘oungiynonymous to sound development management, tn the egos the ferm governance only emphasizes on strict acieence ecerale of aw. After the fall ofthe Soviet Union and the conclusion tthe Cold War, governance ad a word has been used to mean the Sumenting of public administration, mostly on those developing “Counties that are open tothe needs of globalization. “The concept of “governance” Is as ancient as government inst Both governance and government came from the French word seetiemnagee” which means the at or manner of government, The seetteinent word later inthe mid-toth century meant “system by Fearn epi is governed? In the 18th century after, it came to wectupinemeatingasa governing auhoriy.” However, gradually Ee"GeP oth century, the word “governance” was considered an Ckadated word that was hardly used asa political term. ‘Yet, during 1980s under economic reforms particularly with snarl oemanc on bc ay oP ‘Mont Ts tiethe focus sem the proceno and the style of gover towards the idea of sustainable developmer sli os sano a er ee an Soiree sede maeeee weed mieieignatvatiermcnaoe Ecotec ny tener pes ; efficient, transparent anc ‘its generic approach is cing rp! a bi day poland serie = meat ares Gon sreane cama rape ht wena problems of people. Provide the needs to the collective rie tenon et or =< sbelpeerusn pnt rereintnarpintaan sso cp os nae St neers Mente deci touch the lives of evo iray to etter itched ea eens canna ae Mae el rp oth public and private sector organizations. Good governance Proeptive to the present and future needs of the ergantcaton esa, Binunnliy case daemons ean to Prrerests are accounted and assured, aan: ‘asic Elements of Good Governance Mainly, good governance sway of esac ‘eablished in jostice and peace with the intention of safeguarding he cdo of every member of team. Temarnet FE a opine accounted views othe miners end he es ga he mt valnble in sot a ore Pree anc ere the le lente oven ino and it concept more Rute of Law juices the rule of law. Role of law is liberties particulary those aed an pine ‘cxemplified by autonomoss jf egood legal framework, eal force and tested spelt Good governance re the protection of human Fights ad ch UE Rimortes by the Inde Ghrorcoment agencies It cere uch os lawyers and jul NORM o justice, ineonrupile Polce Sfechaniems among oe" ave the absence of governance Ht nthe context of rule of aw he 3 iden ial instability on we ise 1 a country may 8h - seeumtigh that could HaYe Sore Cred by auch Be climate Busines prac gee nse rules and une sinh Peas aa ng busines ne rand ra Sider re cacouee Oana el corporate world, mecorte Sc spn ad Sot Grane nthe une Se, In their collaborations and in their decision-making in Practes ofthe in thee Petco corporate governance entails Boards 10 Pesform cane ee anal responsibilities ethically, honestly and With the highest integrity. ‘Transparency Good govemance rauires tranaparency of the, deci making tetra make certain that information i 058) 206 roy making proces (0 aho wil be affected by such decisions 08 wel obtainable to thor Sng by the decisions taken. This information a the outcomes oem an accurate andl easly understandable should be Bis interpreted uhrough the media so that readers gst fer or of the issues. In actor, any decisions taken and ajcomplee ction mat be in obedience with recognized rly ‘and regulations nthe business sector, transparency can ear a level of tat sn wie ereholders, employees, and the general publ ‘ee menarmangsuecrrore cree a at got cerry ihe orgorraion stall mes. Applying transparen imeem oat of adn nln speedy probe sere wets employer-employee relations, enhanced fesmwon hud erat leading to better productivity. “ Records and processes are transparent and_avalabl sharon tnd netics inte prac of good govern. ‘re mantener inton noe Epgeration In reporting te ancialbealthatthecompany. Financial records and findingsshould be reported to shareholders snd slaksholde rsa and ely ilerpreted manner, eres are rr seg pn ens pi ics meyer te of a hte afar ear tel ele ore about compensation differences in tht ‘Those days lot of companies boost ra 0 compan hve then the advanigs ere atthe wonkhace, Thy Han tape hierarchies and adopted hole ney. Asa Nerere open cor pace that rplacment of asemployses posed exes, manages aah Responsiveness spoons + ma wens + mm pot pen fo eteatiagy ean elaine ta nepal ate one ten reba cle pe Responsiveness the combination of two in ene a eu sped. Vey ort te dee en tying teach content cas an form of Que pany a era tht low bern Nv st dean. Spee, apparent, te time hes ase gamed information atm sometimes the corporate ors faced wham et snd cS a ezome uso of ie, Pa set cutee, companies at oe bd govemane sandstones ca pont ent nem es ne period 0 roe direction to the organization Responsiveness is very cel he worplac and the ck of it may cost eal OEY of may eed. without direction, OF rgolcted phone cal resourses pment gay el basins rsa be provided PO Tenable: trerporsonis known, and the na Consensus Oriented rood consents vires knowing the b ve is Good governance ToT shale gu nn a eet net ng = ‘can be achieved in @ PF ti ‘and expectations sey alg ann hy scking the many fang ec renter ta 2 Tare of pope ie ee Ee om Se a a atecocpnta el Rasen nod Svea and patience, but the resulting decisions ae beter, Ore effective Sil the long term more time eficient- ‘Aconsonaus decision depends on the assurPUon, 10 Soo see Stable ae significant 0 oe ee invidunt vetting to atin shared Ung Te Cceanonly ay nput is il 1° ee a are vewpolnts and afferent personales Pree Mn ing group aeciion making H str Se in the company, edrgom a Tot of robust diacussions and chats one Iai a narmaly expected, Most ofthe times, has vere sea ets wold fee the best consensus because heated detaeciven rom diverse representatives, of Bhekgrundsand experiences. = Euity and nctusiveness ult nd inclusiveness is based onthe idea that all member an an ea el tne sane of belongings on on oe of beng excluded rom the tpl fro, Th nian rou har he mont vuln ‘rst also fel th same andl should have oppor rove imaintain thee wellbeing eee Bee Gi atgaLiosuee once anes corere i ‘eerie eens atone pa lead iat they do not belong or feel that their ions haves grea compared with ater. Expl ph pepe] mn they experienced both: ae iquenesstat they aeac Tor ther speci atibutes ard contrbatonse snare 2A gente of belongh As ng that they ar rece er of her workgroups and among tircoeatng expr se hen ud eames nh a ane Employee onthe other hand experience a sense of xh shen they fee = an ‘Degraded, dismissed, o Alacounted forthe exceptions they bring to the company. ae ‘2 ‘Treated like outsiders because oftheir ferences such Gen Treaty, nationality, age, religion, sexual orientation, and Tasca cases fo role oF formal position of power. tfectveness and ficiency Effectiveness and efficincy is vital In good goveranc hie dessloped by smaking sustainable use of tenures 1 Co 1s deveores ceglts to mest the ends of ts sakehaes advent means guaranteing socal west ied Sustain protecting natural environmen Numan cologieal through ar Poe generations whe ding imovadon and Tot heaipromising people's way o ie ization from the lowest ones © 19P at dors must be responsible #8 diesfconly. Material es0ue fos and effency. Maja fee environment of their management ‘conducting Same ar te ad eS at the es pee A Gperations as they accompli Te Sad re A perations 2 ple of electives a i To a erg mal Pape! PSS very Egon, Aomation sh oftware solutions: Accountability a key requisite out rages ecko fica te inte Se Ce ae Se wie gastrocern ec spray an ed Svann ne tania = mplementaton of the destons or actions Accountability cannot ‘orced without tranoparency 100: ‘Accontaiity sa key governance be PEACESS TDD ay ape ae Te much aspect cf barnes a othe gu A ter directors ox tans, er, vendors, employecs ana she Semen tn ae eater byte dessins and actions Partetation evipaton n good govermanceequrescaal Partition oy anette Raving a ein the rece of den by es trough iegtinate representatives In as st informed and organize. corals ms tape errant Bf te cdo of ps erent the organization and sock ‘especially for those most weak and helpless. ae ood governance these days gives emphasis on the smporteoe' Ened men and women perspectives in decane ‘making, Hi is ma sone of ing staal, anager mal compere fon fda of compara tie he impute ring gener and ethnic diversity fn the workplace. Even in the ‘Sep tw woe ru mente of etn grou to he Sorte resin add or the arp divert, Tu icone bus embraces divert of peopl, sil lens ‘ile, experiences ane piles aera perspectives from both gender and the ETHICS, VALUES AND MORAL IN GOVERNANCE Covananca I tl csr and ts snkeolders Wid 9 Iota cy te cat * in manager settings, governance requires ahi Naar etminietane en NEN competent, well-informed and maa eee mast caren heart 1 ora ot hy et Ora vata diary sherri med ge cy i a er ee Values are an individu’ judgment or standard of beh cy one ie Toda! fe tat sce el bh ey ae pls acting imam improper nay ka pat of dln fo some Peed you el that ttl ake up su! out Short tonacontne? Some peopl standart tenor compet gor uses financol win inet wi ‘Morals are another individual characteristic that can aft an individu’ ethics Morals ae the rules people develop 2 elt indi porns and values and re, radionally, what employee of cutton the chitdhood, culture, education, religion an ote: sear Ie usually described as good or bad behavior, the overall objective of morality iso guaranie Box} vern th primary regard for moral wales PS, and Borer These moral values are avBhy Oh individual by his a eteachers, religion, society and ie envienment of workge= parents ppines today, an incre if in the, ated, progessive and aware of DAE Good governance cannot be suc jovence of ches and moral values: 18 St i ethics and governance ar Me oy and pareeament and private S610 Biyctices in management sg ON ETHICAL BEHAVIOR factors thst INDIVIDUALS INFLUENCE “ Tikt inde 2 rical ‘decision is! Tpeuon gna the circumstary wETorational factors, ame" severalprt ape mt ne wer Individual Factors Affecting Ethics jo ethice, Ethie i What defines bad behavior from good is ahi, formed starting from early childhood and ‘continue until @ Person formed stating frm er several naviual factor et when « person makes decision, all these factors unite. Im the workplc, thea works wel and Jn, conse, with gc ne ve ee MOA swt ane manner the busyeen, eis fe reponsble for rem the daly cond fr acors tat determine the ethic thes eon cont ofthe flow INE: 1. Staesof moral development~Moral developments the process Stage deve able to develop their right attitudes and ‘herein children reat ether people inte society founded on behavior to nr, rules and laws. As discussed it Chapter Fat cencr Konlbcrg who offered a framework on Row 2 nee am gral reasoning through a series of sx key stages Sassi realty the development of morality difer in every {dividual and elt 2. Personal values and morals ~ The ethical standards of peopl Snhtcd slay nil ais and mor ese ar conta isan important variable that affects ethical behavior. {te of contol fe concept in psychology that concems how intensely people consider they have control over the situations and exponences that inuence their ives. A-person with an intemal locus of ental s confident that he control al the events ine ite. We pon with an extra oc of eon hat the belie that ether fate or hk or could be ot fects thea ld be other people a Reece eerentee ee Sorciatomees oy an om he ery, mat Fan apt hes t ane canton ate cane “Einar nde ly fon eae sl set ete se har peel ye unethical aviors, most 7 wa develop low ethical standards. eee! eer ee 7. Religious beliefs ~ coworkers who Tet anay a aa sn So oa Scrtine an nda ec e favors a taco pt Tne ted oy Steere vial naa Seon ae eee good relatlonships with coworkers should be eabahea $n Employee; Tere wil be hormones wertpce a8 ‘2 good relation among coworkers. Thi ef wodeie eal Sify iad to sucess aang ee eee ‘company’s goals. ped Life experiences ~ Life experiences of of people help them ea tether ther behavior! and air ae ical cones, Incorrect or acceptable. These experiences lp individuals “Escower posstble bases of moral obligations tut cenat of Cod, man on the gal Ste apy The gros uo serve as guide to actions for individvals and form their principles of right behavi — Social norms - ethical behavior could also be defined through eal customs and traditions ina certain culture. | What & Rormally acceptable in one culture could be absolutely forbidden sermothen, Culture differs from one country oanotherand soare Aihteal practices. For instance, when Filipino chilren who have cael Miccrvatively raised go to other countries a5 immigrants, thay gutehly embrace the social norms of ther nations ra ae sa iste belie that good dead creat mip eye Pe es for "which live by * Cy ‘good deeds fo igions Seey ing te cine his overall ein = vs upbringing 2190 eis is tl bring = A person rangere raised in & —_ Uanoang A po Ug se foe Leta pepe tenets Fen pre in an abusiv®: SY vei adult demonstrate unethical bavi“cpa ut angen et avian 8. Laws — Laws, and a person abiding by them, 2, SUS saree ee arcople do not break the law, Becoice OF the inuca Many Pe and punished the PMUPPIGe Don {ear of being pros pope anould benave eUNCMY, Sve va laws determine ihe level of punishment os Bn of rime done ited may goto ja and this act makes him be Tisouraget to repeat the action. [SITUATIONAL INFLUENCES ON ETHICAL BEHAVIOR {air basis for judgments oF action, one 1, in soa ideals of what is appropriate to guide them, fone looks 10 pertomshanging universal code of conduct) such as rather than of vine command theory or the Kantian categorical [lc ow posing eifcal behavior from the situation means going leper ncpig and stead making use of a comparable Teason Rich would justly With the inten to have a “There are two main situational factors that could influence gical haven and deion-making, Tey ate explains fly taave Related Inserted i the import maker. " decision tothe decision cies austere eet sage hy mre ty a te decien pebaritaes pote ier aa ge tes situation is also seeking guidance, In Seoncatcl EE eaters aire Sands mealies ieabig ctor. The urgency ofthe probl SQURITG te cee et mettle ative ethical sensibilities are part of the moral intercinn ‘consequences, al rl en include —immeen social consequence, conce smognitu ‘SBimediacy and proximity. ntration of effec tempat sims icy utes seca tn 1. ‘The magnitude of conseques snces — This is the for benefits that could bein ‘um of the harm ‘ction. ‘be impacted asthe consequence of given 2. The social consensus ~Its the degre that the degree hat member of cpp iter god oad Posbty fctea ‘PElncreae and decese of moral intr bse on people consider the results are. ee ‘4. Temporal immediacy ~ Thisis the distance between the ime an seep happens and the start of consequences ofthe soonest the sepals of any effect are likely to take place. |k. Proximity —This refers to the emotional intimacy the dedson Proven feels to those disturbed by the decision Concentration of effect—It isto whether heeft onecton TarSople or may affect ot people ma small extent seta the disagreement onthe print orp aa ao ees ey ESE cn of professions cand arcutecs, Most ote In Se my engineer i betwen he SY, Ea nut, he Eada Ss pubic and ors maces rapped ets Se Taan id aches ge the orl ce lege sent consent, Theta eeeeawer Tra ie precoure is more remarkable ‘Another illustrative ca hy 18 always oy hems may Pave nt value Peapute, For OAM, nora intensity Of sderable may B= fete environs as high MO sacle within an issue, the moral Ser to values. People will different opinions of individuals who appreci the decreasing, number o intensity issue. While those PPOcon sect tpn nnd onc nme cutting of trees as unethical would just ignore the topic &*<=P* When, they become the victims of the consequences. we nrc ta gpm ce smelt Det lh et et srostty por te cet se Hers peal, eae Strano het dicey cue repcaergcchcmmy we gate iPass? tn pee pte ta dna tg gi a ata Sate ae gerne camp Eoin! ‘paca Bombing Mlcion No. 12 peasueeeeee ee eererpaecien setts siaree tear te Sheer ee eee es foros eeecn a caren Sencreanimeneeh tenant Serormeamiaige may gene rane crescent cde cee ita the es soves y aang the wa ‘woonon outweighed the ves destfoyed by sing itn tone ‘that the best course of ten nilinniee Sepa gi Morat Framing look ata given situation, How a !Ns appreciation ofthe facts and may aifect ene from wrong. A big problem in which moral issues may. na certain manner. The po ‘Aframeot reference, o OF point o view, refers tothe way people ituation can affect he determines right the use of langus hharmfal i described ot what i bling ai and may afect howe in moral framing bbe made to appear ver of framing is orate oe ‘on reasoning, Hence, moral intensity could ee aree Teeny aie erga 4 Pod a nies a nnn ters yt neg img bee oe aetna mrss ste sn ae A Soi ata ate oleae Moral muteness ussall lace due to. ieee ly takes place due to some concerns on 1. Harmony ~ This i the belle tht mor ak would enc conflict and retaliation. cain aa 2. Efficiency -Itis about the belie that moral tak could loud issues Fitch leads to.a more time-consuming decision-making. 4. Image of power and effectiveness ~ Managers consider that their Iinage will be hurt if they would be seen a8 someone idealistic or taking decisions for ethical reasons. comer Related : she pile emerimes es tok jt coin pr seg mimes ating wt Ne Seager of an 28 eS asic ml ane rte than ude gn nee bt He ‘ee Seger namely oa a resent Pung int pra ee nS Tag Reward — Ft te Sg core enka saya rant Ethical decision-making," te ate at i vat spre He ld a th svar re copra reeiayels nets inte company ” Sneed mn ‘neopmansgemetprt Sct ngayon ren tw ies en i ey a tai gt tee ne Mpc dean, Na mat Se mnogo te Seaentoie at tte cies een wi ‘company. or yc ananegainton satan anarenarata, Dang nme! ead set emigge a le more gure Ton BE ie de re ac sce Maing remot release Te itthugh once Oe eng cn Work Roles - Work roles usually consists of a complete set of Weck Mons of what to value, the manner of relating to other Sepsie and the approach of displaying behavior. While some Pvflyecs lect to put more effort into thei work when they are brulng donely observed, they are ethically obligated to contribute 100% strength to theirjob whatsoever. Organizational Cultures ~The norms ofthe group often define erenaneh ey catsccry benovoe tan eegeaation. Ts {ul mean hat evn am nahi! bchaor may be considered Sth he gop aerate Por tne wi bry icrmany nonce, company coniers tpn crit would turn 0 be dha Hence, every member of the {group would pardcipate into such activi Mis based on ts ealure Cate ihe bate aS ete tty ha ee rae 8 tata ef he pean moe he noe ne ee sane teapomaing hepreig Ty ee the shared values of the country. eens Soventing CODES OF ETHICS 1h cael aemomas oe ence making when ono yaaa lemma of Gusonaie mae io ee nl statement of «company deagned to ass pofeoral running a Busnes fry and with nti it wore silo the {Cratttion with general principles to direct behaviour as Wel Satning ato rine ht nuance deco making Noose oaths may include areas like business ethics» code ofgeice and sn employee codefconduct Pon cond a chu ences ; 5 ide Naam Cols otie a eae oe ee sof Pic Ba te Si pce oie ne ca est fend toe ptt ce pee a se te ee ee re pacer ai Possible termination oF dismissal feom the organization may be the result in breaking the cade of ethics. A code of thls Eiaperative because it openly outlines the rules for behavior and bifers the basis for a preventive cautioning. Here are some examples of code of ethics that may assist companies when creating. policies on ethical practice that must be pratced inside the organization: ray ele of mB ea ay erie i canes an rem conny oe cease oo 2 conddentiality and peivacy pots — A nt of compan sonnet args oka bec Vi rg dayshave been tarts ation or propriety dae a handle properly customers’ private mformate I ratty as an ethical practice to be spaced Lo preserve confidentially 557 Fe fe same Simulate the company’s secrets should aleopinay etme ate ex once re oe it po nepal ra serie Ped ccm Neem sisi lg we ‘work as account Fepreseh\ TT ajiow their employees to wear hare [part of the policy employees Sica cal dae i proed ook mes Pesala seehaat avant Prema te + oninegen tt te ay Seca ine Sgn ftaest Hrs rc en te ae te eine a a eo Ser ce |5. Obeying the law - Obviously, complying and abiding the law is oer ane tinial practice, Certainly, employees must follow Aone ateoughout theie stay in the workplace to protect their ‘company’s image. {6 Caring and consideration policies ~ Businesses must not allow their consumers to feel that they are just after profit Cnsumers are often loaded with sales pitches everyday. Companies should Create as part oftheir code of ethics that employees should reflecta ‘caring, considerate manner atmosphere to customers. Employees ‘must be trained to be helpful and sympathetic sta Key Components of Codes of Ethics in Business are important in defining and running a company successfully. Here ithe dacusin ofthese components nPany secsetal 1. Legal issues ~ Besides expressing to all employees that mast flow thew this nls to Be dssented nay ganizations, employees should follow local and national a _Antnowg mere are some industries or prt sine have legal requirements, Uank employcs far nsence ae bo, screened for money laundering. Drivers to are sibel er when hey py for dere hese employees must know those spec acon hot tay subject them fo mmediate disciplinary aeons eters St rechten ig eee el gt Perea or eer lg tenet y Sener ners ng seeps a 3. Value-Based Components ~ The code of ethics normally Cinbraces the six universal moral values that companies expec, Sf thelr employees. These values consists of being trustworthy, eepectful, responsible, fat, caring and good citizens, Besides These values, companies may also embrace diversity, being thes onmenttriendly or dress codes. Iti vital to take in all hangs necessary in successfully accomplishing the mision and vision of company. jo addres so 44 Violation ofthe Code of Ehis-It is important oa Violation ofthe Co action take in caes of wolton, The froces ae sell as the poss oma specific vsaton ust sro sary actions must always be fai and violation. ble disciplinary actions resting ‘be clearly stated. Obviously, these ustiale for the ces of tos Ctepoies A code of ethics 9 at of pine compartes, professional organizations theld decision-making in select ng the codes erifcemplance bat principles behindah soni end code of lee val observing Of Personal cies ne so Rat ee otters compli xponabiity inside the “Tis type of co offenders by giving exPl ‘Strculates to employees w! Fee yt docs not only set Bt ‘Eun penalties for violations. hat behavior idelines inorder to guarantee thatthe purposes and philosophies of seco Petes ate strelly monitored, some companies engage the tec ot compliance office. A compliance officer simply Keeps up service of omPrious chages that may happen in regulation codes {0 date on ss-ve employee conduct to promote conformity. This is and ale che banking iidustry which is govern by specific laws on Fae gnduct, Usually employees are trained formally to leam the rues of conduct, ‘Value-Based Code of Ethics [A valuebased code of ethics addresses a company’s co value system. It may shape standards of accountable conduct as they ‘commnicate to the lager public good and the environment. Ths code of ethies may necessitate a greater degree of self-regulation than ‘compliance-based codes. It also defines a company’s guiding values and permits the employce io make thei own interpretation of thost compliant te Po ec nee, at est a Sint nates amen Tanith Sh ale Bt ner See ao cred nn ati Rormones to livestock or nurture animals i* 1 coves oF CONDUCT ; cade ey cage ate action. A code of conduct defines how & y's employees should act on an everyday basis. I reflects the onganizaion’s day-to-day operations coe valves and the general company culture: Moreover cue i vil gue snd rferoor for employers support tautinarydecon making meet in everyday work. aahgeenn Soamapes ay 1s often referred to as th 45 the meat and potatoes to the code of etic. Simply, a code of conduct apples the code of es to 8 sultitude of applicable circumstances For instance in a company, 1 epecific rein the code of ee iio obey the law The code of cert may fle tf tome dite inv evan over Seas of organizational operations, or industry, that employees must {atiow: ry that employees Irrespective of whether an organization officially required to havea code of conduct such as puble companies areal organization tought have one. A code is valueable as an internal guldeline and tthe same fime as an extemal statement of corporate values and “The code of conduct contains definite behavior that are necessary or banned as 3 condition of continues engagement in ‘Work, Sexual harassment, rocal coercion or viewing unsuitable or Unapproved content on company computers are some probihited tehttor inside any company. Numerous control measures have been pled to help companies tobe ree from scandalous situations Wie in turn mada fot of organizations have a healthier work ‘environment and reputation ‘A well-written, code of conduct explains an organization's mission, veluee and principles, connecting them with standards of profesdonal conduct, The code expresses the values the company, Feeds to adopt in leaders and employees, thus defining preferred Tetavion, Consequently, wien codes of conduct can turn into Jardstoks seat ey individual andl organizational performance canbe quantifiedcpr ec rey nd ed vane nh BEN A arene Every code of conduct is distinctive to the organization represents, However many companies find it dificult to write a Celle of conduct and, as @ consequence, their codes often fll shor, ‘Welt a great code of conduct needs an in-depth understand Of the company, its culture and vision, Nevertheless, no mat the nature of a company, all great codes of conduct share certain characteristic. A great code of conduct is: |L. Written forthe reader -It is simple to understand and does no contain any technical of logal terminology. 2 Comprehensive - It covers all significant details that may Influence the daily lives of employees and answers common {questions that arise. 2. Supported ty lesdenhip-Ithas been ecopnized and rated by Shemp uormaragenentam Tire conde Sem of foreword wien by the hil Execsive Ott (CEO) or President. i" oe 4. Accessible—itis available to all employees, current investors a potential investors, ff Gana 5. Visually appeating I follows a tye thats clean and refet ‘of the organization. Potente In the Philippines, Republic Act conduct and ethic sandals for pase otcal sean ‘Ririnto baceup he “pblicotce ange atten Sm the government serve Ths Ac express ie gene Pee and rewards for those who have shown exemplary seeing wets also enumerated those forbidden acts and transactions ater ‘equivalent penalties for those who would violate. Ta eeu Rep SAUCER Toa ALL corporate governance concerned withholding the balance btn ennai and socal goal nd bean inidual andcenmaral gol ‘he governance framework threo encourage the ecient use of sctes on exilly to require account fo the sewardship of thse risources. The ii alg as nearly a8 possible th interests of indeduals eorprations end sate.” Sir Adrian Cadbury ‘The leseners shall beable te: Describe thenature and elements of corporate governance; 1 2, Evaluate the potential challengesin corporate governance; 3 Differentiate the two distinct approaches to corporate governance; ‘Apply agency theory in corporate governance; Practice stewardship theory n corporate goverance; and Employ stakeholder theory in corporate governance ‘As many companies become bigger and powerful corporate governance remains important, ‘Shareholders need to be protected ffom crooked or merely indolent boards of directors and execitives Sime way, the public interest i in danger when huge companies are mingoverted, Poor corporate governance practices have demoralizing ‘fects on shareholders and the bigger Pubic. Guincnryomyrma ney sonics een tr steers emer pe chatter pars acscpt eit ange an ed Covemace mth ae ae Sane CORPORATE GOVERNANCE tis factthat inside any company isa diverse 6704p of peope with theirrespective interests, Therefore, asystems required in ord, ieveate and sustain good relationship among these People to avg Snyone be cheated or exploited, Basically, this is the reason forthe ‘heed to have corporate governance. Technically spesking, corporate fBovernance is a system of processes, polices and rules that diteq Sha control an organization’s conduct for the good management of ‘companies. Corporate governance consists of the relationships between the numerous stakeholders involved and the goals for which the ‘Corporation is rected. In modem business corporations the chief ‘Gutemal stakeholder groups are shareholders, debt holders, trade reditors suppliers, customers and communities affected by the Corporation's activities. Intemal stakeholders include the board of ‘rectors, executives, and other employees. Corporate governance is also a proces that ims to apportion corporate resources ina way that enhances value forall stakeholders Such asthe shareholders, investors employees, customers, supplies fnvironment and the community in general Tt also holds those at {hecontrols to acount by evaluating their decisions on transparency, inclusivity, equity and responsibility. The World Bank defines fovernance as the exercise of politcal authority and the use of [ottutional resources fo manage society's problems and affais. ‘The main objective of corporate governance isto put an end the abusive and sormehov unnwfl an improper aces of some niepreneurs and businss owners." AL fst the malin objective pet vera wdc the sae tne Stkough isi at concer of companies today Ook ths ‘oncept has 8 ew positon whlch i o gain the rut of investors snd other staehelders.Dasilly, corporate governance fy about ‘harmonizing profitability and sustainability. nin Based from the Co of Corporate Govern Circular No. 2, Seren of 2002, corporate governace crate ae system whereby shareholders, creditors and ater skates ct ran ca Rann gd act na Mr ae ensure that im corporation anagement enhances the value ofthe 2 cof ot sompeles nan resin bal market place Weak governance frameworks have led to the collapse of many corporations around the world ana herein the Phipps. same ofthe strategic ams of corporate governance consist of: 1. Good corporate govemance aims at ensuing # higher degree of Gineparency In an organization by encouraging fll disclosure ‘Sftransaetios in the company accounts. Full disclosure includes cUmpliance with regulations and disclosing any information SSpbreant tothe sharcholdes. Transparency involves disclosure forms of confit of interest, 2A strong corporate governance structure encourages A oatatlity of the. management fo the company dices seca countably of the decors to the shareholder. a hiring independent directors, a company ams to crste ee em govemance, Any dscepances in the COmMPEOY 300d cor malfnctioning othe company iscosely watch bY account tor The board haa ign que SBE dsons ensures equitable treatment of 4, A corporate governance structure ibe eaten of A carPofarehders of the company. However a al the shave eaten a tis eg iseneured by 2 Boo deveryat governance struct any organization. sm wo eat et shar : rg pate betty re sui ey ape bet abl ni et ‘rong erate governs er ance arated Senet 7 ae wagons me oY bod an su ese ey en roe te 4 Te man jc of onc a pt a re Shae jeentonavenigher valuation corporate governance WA shares, This shows that good mtu ach, pry ait a anes seer gore inven te OPTnc gene vance the M19 Say Elements of Corporate Governance or exceutte tars play in leadership and oversight. Com fovea reqs cama 10 dle, and doy e Comprehensive and robust programs and mitigate any numbey ovemnance, and unfortunately, there iso easy way to go abou tae Corporate governance isa complex and tedious subject ~~ While the specie elements of corporate governance many hey general wae emphasis on creating and maintaining company direction and promoting goodwill wth sharcholders etic staked, The key pnciple of goed ‘corporate governance ifr depending on the county, industry, regulator and td, exchange. However, mot codes of governance i tmchange Hon codes of include several major 1. Direction ~ Prov roving ove direction forthe bu leaders and employees. oveman ina major prof corporate govemence Making stg deci and docuig fren ants concer of te cmp ae aco ths lem Company : ison sateen sm fom Une governance Of funnest proven purse ed state primary motives for te companys busines sein 2 emi he crore govemane ae ho provides ont right in companies In pai erad sean ms Sepa anton a This ensures that leaders act inthe bes interes e® icess 2 cher sleet pr sce onePen ween to ch power ig SerRSiage MM EEE a int tanner — Corpo isiiess’s account ch of emance Statens acount nh eRe ncmpas Tradl thr has largely contre Sakcholder groups. and communication of company decisions. Tr rel fed come inormaton er bt Hor a ain company ; eee sos een ney en as sap 1 a yaa and business partners. Governance ages often indicate specific things companies do to meet corporate citizenship ~ Another major evolution in the early GiPrcentury is. increased focus on corporate citizenship. 2st panies commonly include a corporate citizenship statement Comfeporate governance oF investor Telationships web pages of Sratatements communieate the business's intent to act with Sasth and environmental responsibility: Philanthropy and other ecstable contributions are among common things noted within chortate atizenship statements, In general, governance includes ‘orpetareness that companies should balance proSt-generating Siyuiies with zesponsible policies and practices 4 independence of directors ~ ifthe directors ofa company, ave ase owners and/or their family members, entrepreneurs 2 ted by friends or individuals who are inwoived inthe Ay appeitement ofthe company, the boards unlikely tebe impa mand ajo of non-executive independent ivetors wil Py prejudice and confit of lteest between the boars a eo agement, independent judgment i almost aways ie best interest of the company. if a company implements 6 bifectve sake management ~ lee ective eke maneeors ight stl steal customers smart alert igh cpl operations and unexpected de erode the buying capabilities of 1s, very facuatons ih Cope vot ik cots wilt MST frFor instance, a company’s ‘Hecive strategic risk mansoemen mea nana erty operation sothe business age ih ee ier mise BN ‘epend on just one sation ~ A solid structure ard nator ig eovenial 10 aidly = mate governance objectives: ge monitor ala thee dealings Hayne of the Fundamental 7 Solid structure and oF8 organisation within Implementing, and dispe Companies will need t0 De interactions, and transactionssennetngnnyovtecseentiney Aut a am alts ic Sh a ey ie ctor gant FHamewor through which trace all such activity elena 1 Teansparency ~ Managers sometimes keep thelr ovn cous limiting the information that filters down to employees se corporste transparency helps unify an organisation. Whe employees understand managements strategies and are alloyey tomonitor the company’s nancial performance, they understasy theirroles within the company. Transparency is also impor {he public who tend nolo tust secretive corporations 9 SeltEvaluation = Mistakes will be will be made, no matter how ou manage your conpany-The Ky isto perform rego sl aston deity td iat boing bln Enpione stout the efecveness of the current poles ng ous om lants to analyze the operations also can help identify wa 7 prove a company’s efficiency and performance, ne ‘Whos Responsible for Corporat Governance? ‘The board of directors is pivo company. The board's role isto set the com for the governance of its lochaves and how it ats the ‘mansgement nae ngement ofthe company by executives = SM Operations! Shanti py ue corporate govemance fort to have any bite Thely wy pereibate thet decent have any te. Telok to appt Severs Si eee deo area igainst a company that does not exercise good governs JeBHl action rom a ey perspective, cor Philipines is regulated by the Secures and Exchoe ins rl curites and Exchange Cheney (SEC) nee onthe Secures Regulation Cade and ie Co fe. Together, these codes apSiyto regone apenas to branches or subsidiaries of foreign corporations? orations foreign corporations pace and ating in Securities "I ure to fallow the seulations cou ree company to lars ¥ 7 and fines joreNTIAL CHALLENGES IN CORPORATE GOVERNANCE ‘Good governance i an ideal which i dificult to achieve in ts sali, Conporotepovernancels the term used to describe the balance javilcipants in the corporate stsuctre who have an interest rant ay in which the corporation is run, such as executive staf ints Siders and members ofthe community. Corporate governance aeecmpacts the profits and reputation of the company, and dey ocr policies can expose the company to lawsuits, fines, Joon damage, and lets of capital investment. Here are five ern pitfalls your corporate governance policies should avokd 1 Confit of interest ~ Avolding conflict of interest is vital. A Gitte ofinterest within the framework of corporate governance Satis when an officer or other controlling member of a Seperation has other financial interests that directly conflict with ncobjectiver ofthe corporation. For example, a board member cra aeksr company who owns a significant amount of stode in an SStcompany has a conflict of interest because, while the board fh serves om represents the development of clean energy, they faves personal financial stake in the success of the oil industry. When conilcts of interest are present, they deteriorate the trust Urshrcholders and the public while making the corporation ‘ulnerable to litigation 2 Oversight lssues ~ Effective corporate governance requires the boned ff itectore to have substantial oversight of the company’s Procedures and practices, Oversight is a broad term that Encompasaes the executive staff reporting to the board and the board's awareness of the daly operations ofthe company and the ‘nay in which its objectives are being achieved. The board protects the interests of the shareholders, acting as a check and balance ‘gainat the executive staff. Without this oversight, corporate staf mnight violate state or federal law, facing substantial fines from ‘egulaory agencies and suffering reputational damage wth the publicpcan nue ACUI cen for > Accountby eme, From te toprevel executives foo porte Sve cand dive ofthe corporation emp acto another es 4 yoeh of ches ene ete acon teach of he come dees rte saris and’ e pustcDaey 1 eu dn den a he corporation right cn the ate of ete company or hue stckhelders oe om echrnree 4 Transparency ~ In oder to be anaparent corporation maa SSIS) peti rie andes and ma se abe thse wo ivet i thir company. Over nt Pris or innings can seriy danage te company ‘hsp wth sade in tht hy are ne ie Under abe pret lack of anaes expose Company tines rom epultory agencies pene 5 Libis violations — Members of th board © executive board have an si ty tae done aed onthe bes rent of ochhlders Further a corporation hasan eth duty topsetey the social wel a other including the greater compen in wich ty pet Minig pluton navy ulctring in eountles that do Rot adhere to se standards are both exampes of ® way th while nae ‘Boverance, ethics, and social welfare interlink, iam « Somos - 4 SEP tt to pate ene eat se ers that may sabotage good corporate gover onthe eee a” ae tes tee t Lumprotected against law violations and damage fo eke ee (ePatation, Hence, there must bea clear enforcement mercer {onsistently applied as way to check and balance agaiee ions of the operational managers. ee 2 Se corpo in order to implement ef ean sg on continuing years to produce sustainebie ea8e HE aa 8 Trout possess a B00 cms Reply nnd ewan a tao directors to seat a8 part of the board. ‘The result ofthe edn would determine wheter directors would rman cfed orto leave if ot given the chance fr another term. The seo es could deprive tne baad of longterm overnight and Mhnespertie ~ Based on good judgment and practaiy, boards oa J eeiion of xls and perspectives ine suc of any organization, However onl for ont of ts mis and nea only Nave a ender and race, The le of eed to generate mite he for the boards are very observ sear satan sucha th ge mi re tough pacar beeuse te the bor Jon hence thy matt be god mx ot boardroom. He TWO DISTINCT APPROACHES TO CORPORATE (GOVERNANCE Corporate governance all management decisions and strategies Tompany’s stakeholders about monitoring nd controlling tit tothe best interest of the ies going bankruptin winding UP pea esltof many compaies gong bauptin wing seg geralt cf mary pnancalsatement, Coes Fr corporate despite producing iged and companies were expected Spy with them ce regulations proaches to corporate governance regulation ne ee wn of hve sles © aPPY- TY Mery asco ere bw rer Based approach ima ratebose, a Prov Soop ee are the usual carats vam rovisions are legal rules, supported by rom the law, i there is failure ‘of a ales-based approach, 2 approved set of requirements i BeeSpproach of ensuring conformitycoe es tse implements a checklist me ‘dear difference betes tensy to observe that {essening of flexibility of ccallerging to set rules ent fikely tg misunderstand rules sloilar rales entity hod en conform fs conforming the p rely forall situations apply to al, whatsoever ity and non- conformity orient management and autor their sizes are ‘vantages [Companies do not have the choice of ignoring the rules Tine me les might Wot be Pe die for every, company, BERNE he Greumstances bees pany are diferent. A stun of corporate governance {Yin agi if he same rls are pple fo all companies. “il companies are required fovmeet the same. minimam Mandards of corporate governance. There are some aspects of corporate governance that eannot be regulated easily, such as negotiating the remuncration| of directors, eciding. the mest suitable range of skills and| Jexperience for the board of eirectors, and assessing. the performance of the board andi Blrectors, Tivestor confidence Ih he sock market might be impeoved if the sock market companies required to. comply with “recognized corporate fovernance rules, je # Advantages and Dissvanta Fear itera abatabengtsre Gren Governance bomen arene