Answer to Question #218549 in Management for Astha

Question

Business ethics and corporate governance

Answer 1

Corporate governance represents the value framework, ethical framework and moral framework under which business decisions are taken. It is concerned with building a constructive relationship between various stakeholders of a corporate entity based on the principles of transparency, accountability and fairness. Business ethics is the application of moral or ethical norms to business - it encompasses standards and principles that guide behavior in the conduct of business. In relation to corporate governance, national and international codes lay emphasis on the ethical nature of good corporate governance. Business ethics helps to maintain relationships between society and company and to regain the stakeholders of company. It is therefore essential and vital for the smooth functioning of corporate governance. Business ethics helps integrate values such as honesty, transparency, trust and fairness to business policies, Due to changing values in society, it also encompasses processes such as assessing the impact of corporate on community and environment. Negligence of business ethics in corporate governance is a responsible factor for corporate failure.