CODES OF

CONDUCT
CODES OF CONDUCT
Codes of conduct govern actions. A code of
conduct defines how a company's
employees should act on an everyday basis.
It reflects the organization's day-to-day
operations, core values and the general
company culture.
CODES OF CONDUCT
A code is a vital guide and reference for
employees to support routinary decision-
making. Thereby, empowering
employees to manage ethical dilemmas
they meet in everyday work.
CODES OF CONDUCT
The code of conduct contains definite
behavior that are necessary or banned as a
condition of continues engagement in work.
Sexual harassment, racial coercion or viewing
unsuitable or unapproved content on company
computers are some prohibited behavior inside
any company.
CODES OF CONDUCT
A well-written code of conduct explains
an organization's mission, values and
principles, connecting them with
standards of professional conduct.
CODES OF CONDUCT
A great code of conduct is:

1. Written for the reader - It is simple

to understand and does not contain any
technical or legal terminology.
CODES OF CONDUCT
A great code of conduct is:

2. Comprehensive - It covers all

significant details that may influence the
daily lives of employees and answers
common questions that arise.
CODES OF CONDUCT
A great code of conduct is:

3. Supported by leadership-It has been

recognized and ratified by the company's senior
management team. This is usually confirmed in
the form of a foreword written by the Chief
Executive Officer (CEO) or President.
CODES OF CONDUCT
A great code of conduct is:

4. Accessible- It is available to all

employees, current investors and
potential investors.
CODES OF CONDUCT
A great code of conduct is:

5. Visually appealing - It follows a

style that is clean and reflective of
the organization.
CODES OF CONDUCT
In the Philippines, Republic Act (RA)
6713 spelled out the conduct and ethical
standards for public officials and
employees. This is to back-up the "public
office being a public trust" principle in
the government service.
CORPORATE
GOVERNANCE
AND ETHICS
CORPORATE GOVERNANCE
Corporate governance is a system of
processes , policies and rules that direct and
control an organization’s conduct for the
good management of companies.
 CORPORATE GOVERNANCE
• The main objective of corporate governance is to put
an end to the abusive and somehow unlawful and
improper activities of some entrepreneurs and
business owners.
• To gain the trust of investors and other stakeholders
 CORPORATE GOVERNANCE
Some of the strategic aims of corporate governance
consist of:
1. Good corporate governance aims at ensuring a
higher degree of transparency in an organization by
encouraging full disclosure of transactions in the
company accounts.
 CORPORATE GOVERNANCE
Some of the strategic aims of corporate governance
consist of:
2. A strong corporate governance structure
encourages accountability of the management to the
company directors and the accountability of the
directors to the shareholders.
 CORPORATE GOVERNANCE
Some of the strategic aims of corporate governance
consist of:
3. A corporate governance structure ensures
equitable treatment of all the shareholders of
the company.
 CORPORATE GOVERNANCE
Some of the strategic aims of corporate governance
consist of:

4. Corporate governance allows firms to

evaluate their behavior before they are
scrutinized by regulatory bodies.
 CORPORATE GOVERNANCE
Some of the strategic aims of corporate governance
consist of:

5. The main objective of corporate

governance is to protect the long-term
interests of the shareholders.
ELEMENT OF CORPORATE GOVERNANCE

1. Direction - Providing overall direction for the

business, its leaders and employees is a major part of
corporate governance.
2. Oversight - The corporate governance role also
provides some level of leadership oversight in
companies.
ELEMENT OF CORPORATE GOVERNANCE
3. Stakeholder relations- this role has largely centered on
investor relations and communication of company
decisions.
4. Corporate citizenship - Companies commonly include a
corporate citizenship statement on corporate governance or
investor relationships web pages. Such statements
communicate the business's intent to act with social and
environmental responsibility.
ELEMENT OF CORPORATE GOVERNANCE

5. Independence of directors - Having a majority of

non-executive independent directors will help avoid
prejudice and conflicts of interest between the board
and the management. Independent judgment is
almost always in the best interest of the company.
ELEMENT OF CORPORATE GOVERNANCE

6. Effective risk management - Even if a company

implements smart policy, competitors might still
steal its customers, unexpected disasters might
cripple its operations and economy fluctuations
might erode the buying capabilities of its target
market.
ELEMENT OF CORPORATE GOVERNANCE

7. Solid structure and organisation - A solid structure

and organisation within the company is essential to
fluidly implementing and dispersing corporate
governance objectives.
ELEMENT OF CORPORATE GOVERNANCE
8. Transparency - Corporate transparency helps unify an
organization. When employees understand management's
strategies and are allowed to monitor the company's
financial performance, they understand their roles within
the company. Transparency is also important to the
public, who tend not to trust secretive corporations.
ELEMENT OF CORPORATE GOVERNANCE

9. Self-Evaluation - Mistakes will be made, no

matter how well you manage your company. The
key is to perform regular self- evaluations to
identify and mitigate brewing problems.
 WHO IS RESPONSIBLE FOR CORPORATE
GOVERNANCE?

The board of directors is pivotal for the

governance of its company. The board's role is to
set the company's strategic direction, provide the
leadership to put those strategies into effect and
supervise the management of the company.
 WHO IS RESPONSIBLE FOR CORPORATE
GOVERNANCE?
Shareholders play a role, too, and must actively
participate in corporate governance for it to have any
bite. Their role is to appoint the right directors and
approve major decisions such as mergers and buyouts.
Shareholders have the collective power to take legal
action against a company that does not exercise good
governance.
 WHO IS RESPONSIBLE FOR CORPORATE
GOVERNANCE?

From a legal perspective, corporate governance

here in the Philippines is regulated by the
Securities and Exchange Commission (SEC)
based on the Securities Regulation Code and the
Corporation Code.
POTENTIAL CHALLENGES IN CORPORATE
GOVERNANCE
1. Conflict of interest - 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.
POTENTIAL CHALLENGES IN CORPORATE
GOVERNANCE

2. Oversight issues - 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.
POTENTIAL CHALLENGES IN CORPORATE
GOVERNANCE
3.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. Without
accountability, one division of the corporation might
endanger the success of the entire company or cause
stockholders to lose the desire to continue their investment.
POTENTIAL CHALLENGES IN CORPORATE
GOVERNANCE

4. Transparency - In order to be
transparent, a corporation must
accurately report their profits and losses
and make those figures available to
those who invest in their company.
POTENTIAL CHALLENGES IN CORPORATE
GOVERNANCE
5. 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, including
the greater community in which they operate.
POTENTIAL CHALLENGES IN CORPORATE
GOVERNANCE

6. Governance standards - A board should

always produce unbiased rules and policies and
disseminate those standards in the business.
POTENTIAL CHALLENGES IN CORPORATE
GOVERNANCE

7. Short-termism - In order to implement

effectively good corporate governance, it must
need boards that can manage the company on
continuing years to produce sustainable value
for the company.
POTENTIAL CHALLENGES IN CORPORATE
GOVERNANCE

8. Diversity - Based on good judgment and

practicality, boards should possess a good
combination of skills and perspectives to
ensure the success of any organization.
 THE TWO DISTINCT APPROACHES TO
CORPORATE GOVERNANCE

Rules-Based Approach
In a rules-based, all provisions are legal rules,
supported by law which attracts punishment from
May
the law, if there is failure to comply.
 Rules-Based Approach

Here are the usual characteristics of a rules -based

approach, namely:
a. approved set of requirements
b. fast approach of ensuring conformity
c. implements a checklist method
May

d. clear difference between conformity and non-

conformity
 Rules-Based Approach

Here are the usual characteristics of a rules -based

approach, namely:
e. easy to observe that entity is conforming
f. lessening of flexibility on the part of management and
auditors May
g. challenging to set rules entirely for all situations
h. likely to misunderstand rules
i. similar rules apply to all, whatsoever their sizes are.
 Rules-Based Approach

Rules-Based Approach
Advantages:
• Companies do not have the choice of
ignoring the rules.
• All companies are required
May to meet the same
minimum standards of corporate governance.
 Rules-Based Approach

Rules-Based Approach
Disadvantages
• The same rules might not be suitable for every
company, because the circumstances of each
company are different.MayA system of corporate
governance is too rigid if the same rules are
applied to all companies.
 Rules-Based Approach
Rules-Based Approach
Disadvantages
• There are some aspects of corporate governance that
cannot be regulated easily, such as negotiating the
remuneration of directors, deciding the most suitable range
of skills and experience forMaythe board of directors, and
assessing the performance of the board and its directors.
 END OF SLIDES
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