Ethics and corporate governance Essay


Jacobs (2004, p. 17) defines corporate governance as an arrangement where organizations are guided and managed, and the emphasis of this description is generally accountability. During the last five years, corporate governance has attracted more concentration from public interest due to its evident significance for the economic stability of corporations and communities in general.

Likewise, corporate governance is the process in which corporate boards administer the operation of an organization by its managers, and the way the board members are held answerable to the organization and shareholders. This contains some inferences for organization or company behaviour not just to shareholders, but also to workers, clients, company’s sponsors, and the stakeholders, as well as the society where the company operates.

The corporate governance system states the sharing of roles and rights among various members in the corporation, for example managers, shareholders, corporate panel, and other groups. It also identifies the processes and guidelines for decision making in corporate issues.

Through this process, it also gives the arrangement where the organization goals are set and the way of achieving those goals and assessing performance (Solomon, 2011, p. 219). This paper discuses a corporate governance and its situation in an organization with studies of leadership behaviours that maintain and overcome the principles of corporate governance in particular company and society in general.


Corporate governance is mostly experienced in companies or organizations. Workplace behaviour is possibly among the most complex elements of the entire corporate governance interest to manage and monitor. However, leaders should have certain values, such as transparency, truth and integrity as a normal element of daily functions so that corporate governance will be achieved.

Company’s managers must start to focus critically on roles to manage efficiently with definite and perceived unsuitable and corrupt conducts if they want to prevent the possible effects and consequences of legal, society, company, and judicial impact.

The possible attack on corporate governance occurs in companies that employ particular number of workers that come from wide cross section of environment and cultures. A company may have a good status among its associates since it addresses the issues that govern the employees and truly kind with wage packages.

A good example occurs when particular employee is called to handle issues like sexual harassment plan since there have been incidences with certain employee or manager. A company may want to zip this issue and can expect that through training they could transform employee or manager’s behaviour and keep the person often considered helpful employee. Actually, the employee may have been set aside for the company’s leadership plan and may be in risk since the victim may affirm that he will resign if the incident is not tackled instantly.

It is possible that different situations of racial harassment or discrimination, similar to sexual harassment, are addressed since they are partly aligned. A company often recruits all workers from different races and cultures, which may cause hatred and discrimination.

Some employees often accuse other employees and request them to return to their home countries or regions. Certainly, managers or employers state that they declined to recruit based on nothing, but only that they did not want them since they identify them to be non-conformist to the company’s culture and principles.

Personally, I could advise the company that it should persist that the behaviour is illegal under the company’s Act. The situation may turn more complex if the clients, working with the section of the company, do not want certain employees to be recruited in its projects. Therefore, the companies should receive the explanation that as contractors they are often accountable based on the Act. The company should understand that it is poorly exposed and could undergo severe consequences.

They should eventually decide to assess and reform the company’s policies and to offer training for employees and level training for every operation they undergo. They should recruit extra employees to cope with the raised workload and to offer advice to administration to make sure that it abides by the company’s policies. The accused employee should leave the company and the victim should be promoted after the leadership training plan.

This incident is common in most companies since discrimination or harassment is common on an occasion where employees have different backgrounds, cultures, or nationalities. It may continue unless employees are provided with their rights and roles and are placed through an informative procedure. Companies can often focus on certain issue that has been exposed as bringing about a violation of the ethics Act of the company (Giroud & Mueller, 2011).

However, it is essential that managers in these companies assume holistic plans and address all issues that arise. They should examine all elements of the legislation and allocate an appropriate process, plan, and method ready to make sure that a violation should not happen under all other positions of the Act. Plans that comprise integrity and ethical decision making are essential as basis to follow and achieve appropriate corporate governance conducts (Klein, 2005).


Certain measures should be followed in all situations of corporate governance if the company needs to help employees and managers demonstrate and transform behaviour by using ethics and integrity. Consequently, they can follow acceptable corporate governance regulations.

Employees and managers are expected to translate policy and legislation into substantial activities and conducts. Formalised plans in themselves will never offer admirable results, mainly a sheep dip way, and it is immature for leaders to consider that this will provide the intended outcome.

Present employees in the organizations are required to be provided clear indications that describe unsuitable and corrupt conducts since they are not tolerable by management. A sticking point in the public sector is that employees are operating on an ethical stiff rope. This sector’s institutional environment creates it nearly impracticable for them to sustain a sturdy sense of ethics and resulting in a conduct that supports appropriate corporate governance.

Generally, the above approaches are among the main elements that I will use to tackle some instances of corporate governance in any company I will participate in. It is the similarity of legislation with workplace behaviour that in the future will attain achievement for corporate governance as a global project. This occurs when every sector of the society adopts certain values, such as transparency, sincerity, and truth as a common element of daily actions.

Decision Making

Corporate governance is among the major elements in decision making and supports the assessment and understanding of financial statements, as well as directs the sensible investment of finance to exploit net profits and income. Various ethical theories are present and can be used in various situations to update company’s thinking and to sustain acceptable decision making. The essential function of corporate governance is to make sure that tactical decision making is provided in the interest of people with a stake in thriving results.

These functions have an impact on the company’s decision making and important during assessment of the investment decisions and asset investment to a great coverage. Some major ethical theories involved in decision making are Consquentialism, Principlism, and Deontology.

Consquentialism proposes that the only element that matters ethically is the consequence of an activity in the company. Deontology states that the essential element is not the consequences of actions, but the moral responsibilities that make the people to do these actions. Principlism enables the people to address almost all ethical issues, and it involves four principles. The four principles include justice, respect for autonomy, non-malaficence, and beneficence.

The ethical virtues are implanted character traits that are considered socially important, such as honesty, reliability, humanity, and sincerity (Parnell, 2009, p. 99). Practical wisdom connects the manner in which virtues are used or passed, and virtue focuses on a person of good character performing an appropriate action (Porta & Lopez-de-Silanes, 2008).


Failure in corporate governance is a serious risk to the opportunities of all companies or firms. Efficient corporate governance, which abides by the core values of reliability and honesty, helps firms have competitive benefit in drawing and sustaining talent, as well as producing constructive responses in the market.

If a company follows a status for ethical behaviour in the current market environment, it provokes not just customer loyalty, but also employee loyalty. Efficient corporate governance may be attained through following a range of guidelines and greatest practices. A great deal relies upon equality, truth, integrity, and the way the firms carry out their businesses. Ethics is really an important element for business success and will go on to act as the outline for success in the current competitive market setting.


Giroud, X., & Mueller, H. (2011). Corporate Governance, Product Market Competition, and Equity Prices. The Journal of Finance, 2(1): 563-600.

Jacobs, J. (2004). Corporate Governance Reform: What It Means for Associations. Association Management, 56(1): 1-36.

Klein, P. (2005). Entrepreneurship and Corporate Governance. The Quarterly Journal of Austrian Economics, 2(2): 19–42.

Parnell, J. (2009). Strategic Management: Theory and Practice. Mason, OH: Cengage/AtomicDog.

Porta, R., & Lopez-de-Silanes, F. (2008). Investor protection and corporate governance. Journal of Financial Economics, 58: 3-27.

Solomon, J. (2011). Corporate Governance and Accountability. New York: Solomon.

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