Q1) WHAT DO YOU MEAN BY BUSINESS ETHICS?

WHAT ARE ITS

FEATURES AND ADVANTAGES?
Ans - Business ethics refers to the set of principles or standards that govern the
moral conduct of business. It is concerned with the relationship between the
techniques, practices, and objectives of an organization. Business ethics says that
businesses have to be honest with themselves and society.
Some examples of business ethics are treating workers fairly, charging fair prices from
customers, providing good quality goods and services, earning reasonable profits,
using accurate and fair weights of the goods, etc. However, unethical behaviour
involves corrupting public servants to get favours, defrauding customers through
misleading advertisements, providing a false image of the business in its books of
accounts and financial statements, using the properties and assets of the business for
personal use, revealing trade secrets to competitors, etc. A businessperson is said to
be ethical if he/she acts upright and serves society’s interests. An ethical business is a
good business as it works for the interests of society. Ethical businesses have a good
image in the eyes of the public, as people have confidence in the business, which
leads towards greater success. Ethical activity is not only good for society, but also for
businesspeople and businesses as it helps them enhance the quality of their lives and
the work they do.
Features of Business Ethics
Corporate Responsibility: The organization works as a separate legal entity with
certain moral and ethical obligations. Such ethics safeguard the interest of all the
internal and external parties associated with the firm. This includes the employees,
customers, and shareholders.
Social Responsibility: Making profits should not be at the cost of society. Therefore,
corporate social responsibilities (CSR) have been a common practice where
businesses work towards environmental protection, social causes, and spreading
awareness.
Personal Responsibility: Employees are expected to act responsibly with honesty,
diligence, punctuality, and willingness to perform excepted duties. Individuals should
settle dues in time and avoid criminal acts.
Technology Ethics: In the 21st century, companies have adopted e-commerce
practices. Technology ethics includes customer-privacy, personal information, and
intellectual property fair practices.
Fairness: Favouritism is highly unethical. Every individual possesses certain personal
bias. But at the workplace, personal beliefs and biases should not affect decision-
making. The firm has to ensure fair chances of growth and promotion for all.
Trustworthiness and Transparency: Businesses should maintain transparency in
business practices and financial reports.

Advantages Of Business Ethics

Draws more investors towards the business: Investors are a big part of any business
for growth and raising funds. If the investors of an organization realize that the
company they are working with is working ethically and prioritizes high morale in the
business, they will feel safe knowing that their money is being used responsibly and
for good purposes. Also, they can feel comfortable knowing that they are not entering
into anything unethical indirectly. Besides, companies with strong ethics get more
attention from investors.
Provide a competitive advantage in terms of customers: Like investors, customers
are also a huge part of a business as they are the reason for the sales and revenue of
a company. When an organization behaves ethically, it can gain customer loyalty and
attract them to their goods and services. It ultimately helps the business in fulfilling
its profit-earning motive.
Enhance a company’s reputation: A company behaving ethically can create a positive
image in the eyes of the public, which can help the business retain its existing
customers by ensuring them that they are spending their hard-earned money on an
ethical business and bringing in new customers. Besides, today’s world is highly social,
and dissatisfied customers can easily and quickly give reviews about the negative
experience and unethical behaviour of the business, which can be bad for the
company and its growth.
Stronger collaboration: Team members or staff of the company working together on
business ethics have respect for each other, which leads them to work together
effectively. The practice of ethics not only creates a good work environment, but also
helps the members collaborate and bring productivity.
Avoid lawsuits: Behaving ethically may be expensive for an organization, but
unethical behavior can be more expensive as an organization involved in unethical
practices may face lawsuits and will have to pay huge fines.
Q2) WHAT IS CORPORATE GOVERNANCE? DISCUSS THE OBJECTIVE
AND IMPORTANCE OF CORPORATE GOVERNANCE
Ans - Corporate Governance is a continuous process of applying the best management
practices, ensuring the law is followed the way intended, and adhering to ethical
standards by a firm for effective management, meeting stakeholder responsibilities, and
complying with corporate social responsibilities.
It contains policies and rules to maintain a strong relationship between the owners of
the company (shareholders), the Board of Directors, management, and various
stakeholders like employees, customers, Government, suppliers, and the general public.
It applies to all kinds of organizations-profit or not-for-profit.

Objectives of Corporate Governance

Enhancing Corporate Performance: Effective corporate governance aims to optimize the
performance of the company by ensuring that resources are utilized efficiently, risks are
managed effectively, and strategic objectives are pursued.
Protection of Stakeholder Interests: Corporate governance seeks to safeguard the
interests of stakeholders by ensuring transparency, accountability, and fairness in
decision-making processes. This involves protecting shareholders' rights, promoting
employee welfare, and considering the impact on the broader community.
Risk Management: Good corporate governance helps identify, assess, and manage risks
faced by the company. By implementing robust risk management practices and internal
controls, governance frameworks reduce the likelihood of financial, operational, and
reputational losses.
Compliance with Legal and Regulatory Requirements: Corporate governance ensures
compliance with laws, regulations, and ethical standards governing corporate behavior.
By adhering to applicable legal requirements and industry standards, companies can
avoid legal liabilities, fines, and reputational damage associated with non-compliance.
Building Trust and Reputation: Strong corporate governance fosters trust and
confidence among stakeholders, including investors, customers, and employees. A
positive reputation for ethical conduct and responsible behavior can enhance the
company's competitiveness and long-term sustainability.
 Importance of Corporate Governance
Accountability: Corporate governance establishes mechanisms for holding management
accountable to shareholders and other stakeholders. By defining clear roles,
responsibilities, and decision-making processes, governance practices ensure
transparency and integrity in corporate actions.
Protection of Stakeholder Interests: Effective corporate governance safeguards the
interests of stakeholders by promoting fairness, ethical behavior, and compliance with
regulations. This helps prevent conflicts of interest and ensures that the company
operates in the best interests of all stakeholders.
Decision Making: Well-defined governance structures facilitate informed decision-
making within the organization. By establishing oversight mechanisms, such as boards of
directors and committees, corporate governance ensures that decisions are made in the
best interests of the company and its stakeholders.
Risk Mitigation: Strong corporate governance helps identify, assess, and manage risks
faced by the company. By implementing robust risk management practices and internal
controls, governance frameworks reduce the likelihood of financial, operational, and
reputational losses.
Attracting Investment: Investors often consider the quality of corporate governance
when making investment decisions. Companies with sound governance practices are
perceived as more reliable, transparent, and trustworthy, which can attract capital and
lower the cost of capital for the company.
Long-Term Sustainability: Corporate governance promotes sustainable business
practices and responsible decision-making that considers environmental, social, and
governance (ESG) factors. By focusing on long-term value creation and stakeholder
engagement, governance frameworks contribute to the company's sustainability and
resilience.
Reputation Management: Good corporate governance is essential for maintaining a
positive reputation in the market. By promoting ethical conduct, integrity, and
accountability, governance practices help protect the company's brand and credibility,
which are vital assets in today's competitive business environment.