COPORATE GOVERNANCE AND BUSINESS
Corporate Governance In business is very crucial in today’s world for an organization. Stakeholders do not only check what business do but they more focus on the management team of the company and be biased to their decision according to the past performance of management. Corporate governance and business ethics are unforeseen principles of the stability and sustainability of business organizations in the present-day context. It encompasses all the principles, measures and rules that encompass the management as well as regulating of firms. It ensures that the businesses operate without being cloudy, risky, and bias and has close relationship with business ethics which are standards of moral character that define the right conduct of an individual or business entity (Tricker, 2019).
It is the unity of all and proper management of corporate organizations that maintain and uplift the stakeholders’ confidence. Board of directors also has duties of supervising management and the operation of the organization in addition to their legal and ethical duties (Tricker, 2019). Good corporate governance management tend to make decision staying in their boundaries and have ethical consideration before making any decision
The problems of business ethics are related to the norms and values defining the orientation of the business and its success to a great extent. Legal outcomes can also be a consequence of negligence on the part of the company, an ethical failure, which could entail for instance fraud or corruption erodes away the reputation of the business (Google Books, 2016). Ethical behavior is useful for achieving the relatively long-term objectives of a business venture and establishing credibility among the stakeholders.
A clear case, especially one that went under in 2001, is the Enron Corporation Company; this shows that poor corporation governance and unethical practices may lead to company issues. The corporate management of Enron had been posting bogus accounts with the purpose of concealing an organization operating loss and bringing about the collapse of the company and losses to shareholders. This case demonstrates why this kind of failure should have good governance, simple and strict ethical standards to be followed. Also, the Satyam Computer scandal can also be a great example of lack of corporate governance where the management and auditors show fake profit in the books of the company which later lead to collapse (Textbook, n.d.)
Also, daily effective management and high levels of ethical business practices are critical to the generation of sustainable worth since it considers ESG aspects. They are today of considerable importance to the investors and the consumers, and therefore entail that firms should develop sustainability strategies (Eccles, Ioannou & Serafeim, 2014).