Ethics Of Corporate Governance

1147 Words5 Pages
1. INTRODUCTION Corporate governance is becoming an issue of global importance, but there is currently no clear distinction exactly what constitutes corporate governance and where the boundaries lie which are still subjects of debate. It is a fairly new and emerging subject and little has been written about it especially with regards to developing economies prior to the Second King Report on Corporate Governance that was written for South Africa and released in 2002. In South Africa, corporate governance was only institutionalized formally when the King 1 (IOD 1994) report was published in November 1994. It was compiled by the King committee which was formed in 1992 with the main objective of focusing on the improvement of the state of corporate…show more content…
• While King III was based on “apply or explain” principle, King IV assumes that principles will be applied and requires that companies explain how the principles are applied. Business Ethics and Corporate Governance is very important for companies that want to set up operations abroad. Some companies are finding it difficulty in complying with corporate governance regulations especially if there seems to be no initiative towards improving the overall legal and regulatory climate in that specific country. At the same time, corporate governance cannot exist in a vacuum. There are certain principles like ethics, morals and values that serve as a guide on how corporate governance needs to be implemented in order for it to be beneficial to the business as well as to the society at large. 3. THE NEED FOR CORPORATE GOVERNANCE • The Impact: Economic and Social - Businesses that establish other operations in foreign countries need to ensure that they develop, produce or sell things that will be contributing to the social advancement of that country and create productive employment including assisting in raising the purchasing power of their…show more content…
• Respecting the environment - In every country that a business operates in they must ensure that they protect and promote sustainable development while also preventing the waste of the country’s natural resources. • Avoiding illegal operations - The business must take every precaution possible to ensure that they do not participate or come across as condoning bribery, money laundering or any other corrupt practice that will put their reputation into question. 4. KING IV PRINCIPLES The King 4 principles need to be considered with regards to governance codes when setting up these companies as follows: Principle 1 1.1 The governing body should set the tone and lead ethically and effectively. 1.2 The governing body should ensure that the organization’s ethics is managed
Open Document