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Section B

Q-1- What is business ethics?

Ans :Business ethics refers to the principles and standards that guide
businesses in conducting their operations with integrity, fairness, and
responsibility. It involves making ethical decisions in areas such as
transparency, corporate governance, fair labor practices,
environmental sustainability, and consumer protection. Ethical
business practices help build trust with stakeholders, ensure legal
compliance, and promote long-term success. By following ethical
guidelines, companies foster a positive reputation and contribute to
a socially responsible and sustainable business environment.

Q- Why is ethics important in business ?

Ans : Ethics is crucial in business as it builds trust, enhances

reputation, and ensures long-term success. Ethical practices foster
transparency, fairness, and accountability, helping businesses
maintain strong relationships with customers, employees, and
investors. Companies that follow ethical guidelines avoid legal issues,
reduce risks, and create a positive workplace culture. Ethical
decision-making also promotes sustainability, corporate social
responsibility (CSR), and fair treatment of stakeholders. Ultimately,
ethical business practices contribute to a strong brand image,
customer loyalty, and long-term profitability.
Q- Define corporate governance ?
Ans: Corporate governance refers to the system of rules, practices,
and processes by which a company is directed and controlled. It
ensures accountability, transparency, and fairness in a company’s
relationship with its stakeholders, including shareholders,
employees, customers, and the community. Strong corporate
governance helps prevent fraud, promotes ethical decision-making,
and enhances investor confidence. It involves key elements such as
the Board of Directors, internal controls, and regulatory compliance,
ensuring that businesses operate responsibly and sustainably for
long-term success.

Q-4-What are the key principles of corporate governance ?

Ans: The key principles of corporate governance include:

Transparency – Ensuring clear and open communication with
stakeholders about financial performance and decision-making.
Accountability – Holding company leadership responsible for their
actions and decisions.
Fairness – Treating all stakeholders, including shareholders,
employees, and customers, with equity and integrity.
Responsibility – Ensuring ethical decision-making and compliance
with laws and regulations.
Independence – Maintaining an objective and unbiased Board of
Directors to oversee management.
These principles promote trust, sustainability, and long-term
business success.
Q-5- What is corporate social responsibility ?
Ans : Corporate Social Responsibility (CSR) is a business approach
that integrates social, environmental, and ethical concerns into
company operations and decision-making. It involves businesses
taking responsibility for their impact on society by promoting
sustainability, fair labor practices, environmental protection, and
community development. CSR initiatives include reducing carbon
footprints, supporting employee well-being, and engaging in
charitable activities. By adopting CSR, companies enhance their
reputation, build customer trust, and contribute to long-term social
and economic development while ensuring ethical and responsible
business practices.

Q-6-What is difference between ethics and law in business ?

And : Ethics and law in business differ in their nature and
enforcement. Ethics refers to moral principles that guide business
behavior, focusing on what is right and fair, even if not legally
required. It involves honesty, integrity, and social responsibility. Law,
on the other hand, consists of formal rules and regulations set by
governments that businesses must follow to avoid legal
consequences. While laws enforce minimum standards, ethics go
beyond legal requirements to promote fairness and trust. A business
can be legal but still unethical, making ethical decision-making
essential for long-term success.
Q-7-What is code of ethics ?
Ans: A Code of Ethics is a set of principles and guidelines that define
the ethical standards and expected behavior within an organization.
It outlines the company’s values, responsibilities, and commitments
to honesty, integrity, fairness, and transparency in business
operations. A Code of Ethics helps employees make ethical decisions,
promotes accountability, and ensures compliance with legal and
professional standards. It typically covers areas such as corporate
governance, conflict of interest, confidentiality, fair treatment, and
social responsibility. By following a strong ethical code, businesses
build trust with stakeholders, enhance their reputation, and create a
positive and ethical work environment.

Q-8-What are the responsibility of board of directors?

Ans :The Board of Directors is responsible for overseeing a

company's management, ensuring ethical practices, and protecting
shareholders' interests. Their key responsibilities include:
Strategic Guidance – Setting the company’s vision, mission, and long-
term goals.
Corporate Governance – Ensuring transparency, accountability, and
ethical decision-making.
Financial Oversight – Approving budgets, financial reports, and
ensuring legal compliance.
Risk Management – Identifying and mitigating business risks.
CEO Selection & Evaluation – Appointing, monitoring, and, if
necessary, replacing executives.
Stakeholder Interests – Balancing the needs of shareholders,
employees, and customers.
Q-9- What is whistleblowing in business ethics?
Ans: Whistleblowing in business ethics refers to the act of reporting
unethical, illegal, or fraudulent activities within an organization. A
whistleblower is an employee or insider who exposes wrongdoing,
such as corruption, fraud, safety violations, or discrimination, to
internal authorities or external regulators. Whistleblowing helps
maintain transparency, accountability, and ethical business practices.
Companies often have whistleblower protection policies to prevent
retaliation, ensuring a safe reporting process. Laws like the Sarbanes-
Oxley Act in the U.S. protect whistleblowers. Encouraging ethical
reporting fosters a culture of integrity, helping businesses avoid legal
consequences and maintain public trust.

Q-10 –How does transparency impact corporate governance ?

Ans :Transparency is essential for effective corporate governance, as
it ensures openness, accountability, and trust between a company
and its stakeholders. By providing clear and accurate information
about financial performance, decision-making, and business
operations, transparency helps prevent fraud, corruption, and
mismanagement. It allows shareholders, investors, and regulators to
make informed decisions and hold the company accountable.
Transparent corporate governance improves a company’s
reputation, strengthens investor confidence, and promotes ethical
behavior. It also fosters fair competition and compliance with legal
standards. Ultimately, transparency builds long-term sustainability
by encouraging responsible management and stakeholder trust in
the organization.
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Section C

Q-1-Explaiin the importance of corporate governance in modern

business and how it contributes to long term success ?
Ans : Importance of Corporate Governance in Modern Business and
Its Contribution to Long-Term Success
Corporate governance is essential in modern business as it
establishes the framework for ethical decision-making,
accountability, and transparency. It defines how companies are
directed, managed, and controlled, ensuring that the interests of
shareholders, employees, customers, and other stakeholders are
protected.
One of the key benefits of strong corporate governance is enhanced
investor confidence. When companies operate transparently and
follow ethical guidelines, investors feel secure, leading to better
capital access and financial stability. Good governance also ensures
regulatory compliance, helping businesses avoid legal penalties,
lawsuits, and reputational damage.
Additionally, corporate governance promotes strategic decision-
making by ensuring that the Board of Directors and executives act in
the company’s best interests. It helps in risk management by
identifying potential threats and implementing policies to mitigate
them. Businesses with strong governance structures are more
resilient during economic downturns and crises.
From an ethical perspective, corporate governance fosters fairness,
integrity, and responsibility, leading to a positive corporate culture.
Companies that treat employees, customers, and suppliers ethically
build trust and long-term relationships, resulting in higher
productivity and brand loyalty.

In the long run, corporate governance ensures sustainable growth by

aligning business objectives with social responsibility and
environmental considerations, making companies more adaptable,
reputable, and successful in an evolving global market.
Q-2-Discuss the impact of ethical decision making on business
performance, providing real life examples
Ans: Impact of Ethical Decision-Making on Business Performance
Ethical decision-making plays a crucial role in shaping a company’s
reputation, financial success, and long-term sustainability.
Businesses that prioritize ethics build trust with customers,
employees, and investors, leading to higher brand loyalty,
productivity, and profitability.
One major impact of ethical decision-making is improved brand
reputation. Companies known for ethical practices attract more
customers and investors. For example, Patagonia, a leading outdoor
clothing brand, emphasizes environmental sustainability and fair
labor practices. Its ethical approach has strengthened customer
loyalty, resulting in continued financial growth.
Another impact is employee satisfaction and retention. Ethical
workplaces foster a positive culture, leading to higher employee
morale and reduced turnover. Google is recognized for its ethical
leadership and inclusive work environment, making it one of the best
places to work, attracting top talent globally.
Ethical decision-making also reduces legal and financial risks.
Companies that engage in unethical practices face fines and lawsuits.
For example, Volkswagen suffered massive losses and reputational
damage due to its emissions scandal, where it manipulated diesel
engine test results. The scandal led to billions in fines and loss of
consumer trust.
In contrast, companies that integrate ethics into their decision-
making, like Unilever, experience long-term success by balancing
profit with social and environmental responsibility, proving that
ethical business practices drive sustainable growth.