Et
hicsandcor
por
ategov
ernance
Ethi
csincor
porategover
nancer
efer
stothemoralpri
nci
plesandv al
uesthatgui
deacompany'
s
behavi
oranddecisi
on-maki
ngpr
ocesses.I
t'
saboutdoi
ngt her
ightthi
ng,
ev enwhennoone'
s
watchi
ng.Thisincl
udes:
1.
Transpar
ency
:Bei
ngopenandhonesti
nal
ldeal
i
ngs,
financi
alandot
her
wise.
2.Account
abi
li
ty:
Taki
ngr
esponsi
bil
i
tyf
oract
ionsanddeci
sions.
3.Fair
ness:Treat
ingall
stakehol
der
s,i
ncl
udi
ngempl
oyees,
cust
omer
s,andshar
ehol
der
s,wi
th
fai
rnessandrespect.
Corpor
ategover
nance,ontheotherhand,i
sthesyst
em ofrul
es,
pract
ices,
andprocessesby
whichacompanyisdir
ectedandcont r
oll
ed.I
t'
saboutensuri
ngt
hecompanyisruneffici
ent
ly,
ef
fecti
vel
y,andi
nawayt hatbenefi
tsallst
akehol
der
s.
Somekeyaspect
sofcor
por
ategov
ernancei
ncl
ude:
1.
Boardcomposit
ion:
Ensur
ingt
heboar
dofdi
rect
orshast
her
ightmi
xofski
l
ls,
exper
ience,
and
i
ndependence.
2.Executi
vecompensat
ion:
Tyi
ngexecut
ivepayt
oper
for
manceandensur
ingi
t'
sfai
rand
reasonable.
3.Ri
skmanagement
:Ident
if
yingandmi
ti
gat
ingr
iskst
othecompany
'soper
ati
onsand
reput
ati
on.
Whenethi
csandcorpor
ategover
nancecometogether,
compani
escanbuildtr
ustwi
th
st
akehol
ders,
impr
ovethei
rreput
ati
on,andul
ti
matelydri
vel
ong-
ter
m success.
Et
hicaldeci
sionmaki
ngi
nst
rat
egi
cmanagement
1.St
akehol
deranal
ysi
s:I
dent
if
yandpr
ior
it
izest
akehol
der
saf
fect
edbyt
hedeci
sion.
2.
Mor alandethi
calpr
inci
ples:Appl
ypr
inci
plesl
i
ker
espectf
orhumanr
ight
s,f
air
ness,
tr
ansparency
,andaccountabil
i
ty.
3.
Long-ter
m consequences:
Consi
dert
hepot
ent
ial
long-
ter
m ef
fect
soft
hedeci
sionont
he
or
ganizati
onanditsst
akehol
der
s.
4.
Cor
por
atesoci
alr
esponsi
bil
it
y:I
ntegr
atesoci
alandenv
ironment
alconcer
nsi
ntot
hedeci
sion
Rol
esofcor
por
ategov
ernancei
npr
omot
ingCor
por
ateSoci
alResponsi
bil
it
y
1.Accountabil
it
y:Goodcorporat
egover
nanceensuresthatcompaniesareaccountabl
etoal
l
stakehol
ders,i
ncludi
ngsharehol
der
s,employ
ees,customers,andtheenvir
onment.This
accountabil
i
tyencouragescompani
estoadoptCSRpr acti
cesthatbenef
itboththebusi
ness
andsociety.
2.Tr
ansparency
:Transpar
entdecisi
on-
makingpr
ocessesandreport
ingenablest
akehol
der
sto
assessacompany '
scommi tmenttoCSR.Thi
str
ansparencyf
oster
st r
ustandencour
ages
companiestopri
ori
ti
zesocialr
esponsi
bil
i
ty.
3.Boar
dover
sight:
Anef f
ect
iveboardofdi
rector
scanensur
ethatCSRi
sintegratedi
ntot
he
company'
sstr
ategyandoperati
ons.TheboardcansetCSRgoal
s,moni
torprogress,
andhol
d
managementaccountabl
e.
4.St
akeholderengagement:Corporat
egovernanceframeworksthatencouragest
akehol
der
engagementcanhel pcompaniesunderst
andandaddr esssocial
andenv i
ronmental
concer
ns.
Thisengagementcanl eadt
obet t
erCSRpracticesandimprovedrel
ati
onshipswit
h.
5.Ri
skmanagement:
Goodcor por
ategovernancehelpscompaniesidenti
fyandmanageri
sks
associ
atedwi
thCSR,suchasenvi
ronmentaldegradati
on,l
aborpract
ices,andsuppl
ychai
n
management.
6.I
ncent
ivi
zingresponsibl
ebehavi
or:
Corpor
ategovernancemechani
sms,suchasexecuti
ve
compensati
onandper formancemetr
ics,
canbedesignedtoi
ncenti
vi
zeresponsi
blebehav
ior
andCSRper for
mance.
7.Compli
ancewi
thregul
ati
ons:Ef
fect
ivecorpor
ategover
nanceensur
escompli
ancewi
thl
aws
andregul
ati
onsr
elat
edtoCSR,suchasenv i
ronment
alprot
ecti
onandlaborl
aws.
Tr
anspar
encyandaccount
abi
li
tyi
nst
rat
egi
cdeci
sionmaki
ng
Tr
anspar
ency
:
1.
Clearcommuni
cat
ion:
Stakehol
der
sshoul
dbei
nfor
medaboutt
hedeci
sion-
maki
ngpr
ocess,
i
ncl
udi
ngt
hef
act
orsconsi
der
edandt
her
ati
onal
ebehi
ndt
hef
inal
deci
sion.
2.
Accessi
blei
nfor
mati
on:Relev
antdat
aandi
nfor
mat
ionshoul
dbeav
ail
abl
etot
hosewhoneed
i
t,i
natimel
yandunder
standabl
emanner.
3.Openchannel
s:Encour
agefeedbackandquest
ionsf
rom st
akehol
der
s,f
ost
eri
ngan
envi
ronmentofopennessandtr
ust.
Account
abi
li
ty
1.Def
inedrol
esandr esponsibi
li
ti
es:Cl
ear
lyout
li
newhoi
sresponsi
blef
ormaki
ngdeci
sions
andwhoi saccount
ablefortheoutcomes.
2.
Performancemetrics:
Est
abl
i
shmeasur
abl
egoal
sandbenchmar
kst
oev
aluat
ethesuccess
ofst
rategi
cdeci
sions.
3.
Regularr
evi
ewandassessment
: Per
iodi
cal
lyr
evi
ewdecisi
onsandt
hei
rout
comes,
ident
if
ying
ar
easforimpr
ovementandadj
ust
ingstrat
egi
esasneeded.
Bal
anci
ngst
akehol
der
svsshar
ehol
der
s'i
nter
est
s
St
akehol
der
s
-Empl
oyees
-Cust
omer
s
-Suppl
i
ers
-Env
ironment
-Communi
ty
Shar
ehol
der
s
-I
nvest
ors
-Owner
s
TheChal
l
enge
Busi
nessesmustbalanceshor
t-
ter
m gai
nsforshar
ehol
derswithlong-
ter
m sust
ainabi
l
ityf
or
st
akeholder
s.Pr
ior
it
izi
ngoneovertheot
hercanhaveconsequences:
St
rat
egi
esf
orBal
ance
1.
Int
egr
atedr
epor
ti
ng:
Consi
derbot
hfi
nanci
alandnon-
fi
nanci
almet
ri
cs.
2.
Stakehol
derengagement
:Regul
arf
eedbackandcommuni
cat
ion.
3.
Long-
ter
mthi
nki
ng:
Pri
ori
ti
zesust
ainabl
egr
owt
hov
ershor
t-
ter
m gai
ns.
4.
Cor
por
atesoci
alr
esponsi
bil
it
y:I
nvesti
nini
ti
ati
vesbenef
it
ingst
akehol
der
s.
5.
Gov
ernancest
ruct
ure:
Ensur
eboar
drepr
esent
ati
onr
efl
ect
sdi
ver
sei
nter
est
s.
Ref
erence
Dol
nar
dekonl
i
brar
y.
Busi
nesspol
i
cyt
extbook.
Mar
ket
ingst
rat
egyandmanagement2ndEdi
ti
onby
OnuohaA.Onuoha.
Busi
nesspol
i
cyandst
rat
egymanagementBy
I
saacO.chukwumaEdwi
nah.
cBansal ,
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eved
2008- 09- 30.Sacconi ,L.( 2004) ." ASoci al Cont r
actAccountf orCSRasExt endedModel of
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Ethi
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many ,J.( Sept ember2007) ."Suppor t
ingEt hical
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ber g,S.;Tul lberg,J.(1996).
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