Examining Challenging Issues In Corporate Governance Essay Example

practices such as window dressing and concealing facts in reporting. These deceptive behaviors include corporate frauds, large-scale misreporting, security frauds, and other similar practices. Such pervasive patterns have consequences such as disregard for shareholders' investments, growing public mistrust, and directors behaving irresponsibly without fear of punishment.

There has been an increase in awareness and emphasis on the importance of good corporate governance, ethics, code of conduct, moral values, social responsibility, and legal improvements. These factors contribute to accountability, transparency, fairness, and competitiveness in corporations' operations and interactions with stakeholders. This trend towards corporate governance is also observed in our country. The board of managers in corporate sectors holds the responsibility for ensuring good corporate governance. Comprehensive guidelines are established for the selection, compensation, and responsibilities of these managers.

The demand for audit commissions and supervisory boards has been determined, and it is expected that through these statutory and voluntary demands, the Indian corporate sector will improve its corporate administration. Corporate administration is seen as a complex and multidisciplinary concept. It aims to establish trust and confidence among stakeholders, who have competing and conflicting interests. Corporate administration encompasses a set of rules that regulate corporate behavior, including laws, procedures, practices, and implicit rules that guide managerial decisions concerning stakeholders' interests.

The approach to corporate governance requires transparent and fair behavior in achieving the goals of the corporate sector and the methods to accomplish them. Corporate administration focuses on governing the actions of the corporate sector. The term 'governance' can be defined as the customs and institutions that determine how authority is exercised. It includes:

• The process by which authority is selected, held accountable, monitored,

and replaced;

The concept emphasizes that nothing illegal or unethical should be done, while advocating for the principle of enlightened self-interest to further governance. This way, it encompasses ethical issues as well. In this context, ethics refers to the system of moral rules (DO's and DON'TS) and guidelines of behavior that are considered self-imposed within a specific framework and environment.

The text emphasizes the importance of conducting operations in a way that does not harm stakeholders' interests. While corporate governance is considered crucial in today's globalized and liberalized context, attempts to implement it have mainly remained theoretical. As a result, researchers are now reassessing what is necessary to make it a practical reality. The primary requirement is to redefine Business Ethics and Social Responsibility based on the values and principles that drive entrepreneurial endeavors.

Ethics, Values, and Social Responsibility:

The term "Ethics" originates from the Greek word "ethicos," which means accepted conduct or customary behavior. Going against this norm is deemed unacceptable.

In ancient Greece, the term "ethos" pertained to the spirit and temperament of a civilization, encompassing its customs, habits, and overall character. This concept is akin to what historians and philosophers refer to as a civilization's "values." The Oxford Advanced Learner's Dictionary defines "ethics" as the moral principles that guide an individual's conduct. Establishing ethics serves as a means to

set standards for human behavior. Both emotions and actions in particular circumstances shape people's behavior.

The ethical procedure consists of two steps. The first step involves having knowledge of what is right and wrong, while the second step requires possessing personal discipline, integrity, and motivation to act in accordance with that knowledge. Society implements penalties and punishments as a means to protect the innocent and encourage individuals lacking self-discipline, personal integrity, or sound judgment to adhere to accepted practices. Determining what is right can be difficult due to the existence of multiple correct approaches in most situations. Therefore, it is beneficial to establish a set of guiding principles that aid in making the most "right" decision. This concept's significance within human communities can be referred to as social systems and organizations.

The text emphasizes the importance of the system in relation to all those involved. In today's world, this includes various stakeholders such as investors, clients, employees, providers, authorities, and the community. The ethical values of the system or organization are determined by the relative priorities given to these stakeholders.

The criteria or ideals we uphold determine how an individual, object, event, or activity should be. For instance, we endorse sincerity and honesty in people and expect parents to guide their children. When these expectations are not met, terms like 'bad', 'awful', and 'wicked' are employed to describe them or the events. Thus, values indicate a perception of what is right or wrong, good or bad, and other judgmental criteria stemming from our steadfast belief in the ideal.

Values encompass attitudes, perceptual experiences, involvements, and ultimately personality. Value represents a developed belief in a particular doctrine that triggers a

person's mind to determine their course of action in life. Value solely affects the mental aspect and is not directly connected to one's performance. It is not the nature of the business itself that is unethical but rather the individual actions that influence business activities and place it in an unethical situation. Values at the individual level encompass faith, self-respect, resilience, creativity, and dedication. At the workplace level, it includes tolerance, sacrifice, courtesy, fairness, civic sense, honesty, humility, simplicity, rationality, truthfulness, forgiveness, determination, cleanliness, absence of egoism, withdrawal, composure, and so on.

Shared values that can be imparted to members of an organization include harmoniousness, resourcefulness, subject, Dharma, equity, brotherhood, integrity, peace, societal scruples, cooperation, unrecorded and allow live, concern, attention, common trust, love, squad spirit, efficiency, effectivity, excellence, morale, productiveness, duty, risk-bearing, answerability, sharing, forfeit etc.

Individuals working in a professional capacity take on an additional burden of ethical duty. For example, professional associations have codes or ethics that dictate the necessary behavior within a specific profession like medicine, law, accounting or engineering. These written codes establish rules of behavior and standards based on the principles of Professional Ethics. These principles include:

- Impartiality; objectiveness.
- Openness; full revelation.
- Confidentiality.
- Due diligence/ responsibility of attention.
- Fidelity to professional duties.
- Avoiding potential or evident conflict of interest.Broader rules of moral values (to make or to forebear) include not leading on or ripping off, not resorting to stashing, black selling, profiteering and smuggling, not destroying or falsifying competition, ensuring earnestness and truth, not resorting to unjust practices, working as a good citizen, refraining from secret kickbacks/corruption, and fair treatment to workers etc.

Even when not written into a code, rules

of professional ethics are generally expected of people in business, employees, volunteers, elected representatives and so on.

Entrepreneurial Ethos:

For every type of corporate entity, commercial or otherwise, there are individuals responsible as entrepreneurs or as leaders. The philosophy of the functioning of these entities cannot be completely different from the attitudes and aspirations of the individuals working as promoters.

In essence, the ethos of booster individuals, which represents their attitudes and aspirations, plays a significant role in their decision-making and actions. Going against this ethos would result in failure or mere illusion. Therefore, when discussing various efforts and measures for corporate governance, it is important to objectively evaluate the extent to which they align with the prominent ethos of boosters, entrepreneurs, and leaders. This alignment is crucial in turning dreams into effective actions.

The cosmopolitan attitudes and aspirations of boosters, enterprisers, and leaders can be described by their focus on self-interest in terms of gain, popularity, and recognition. They possess a dominating spirit and desire for quick progress. They also have an inherent superiority instinct and a strong determination to achieve the end goal regardless of the means required. These individuals are attached to the philosophy of 'I am OK' and view success as a zero-sum game where one person's gain is another's loss.

Additionally, they prioritize personal fame or popularity and continuously strive to prioritize gain over loss with a micro-oriented approach. However, conflicts arise when these entrepreneurial values are applied at both micro and macro levels. As a result, this weakens the effectiveness of corporate governance measures.

There are various reasons for the lack of high standards in corporate governance:

- Feudal Mindset: The belief that the king's

son automatically becomes the next king is reflected in how succession works in corporations.
- Lack of concern for society: Being a good man does not necessarily equate to being a good citizen. Many individuals may be considered "good people" but fail to fulfill social responsibilities.In general, the lack of cosmopolitan attitudes among entrepreneurs leads to conflicts within organizations and a decline in effective corporate governance. This is due to factors such as feudal mindsets and a disregard for societal concerns. Some specific challenges include a highly controlled environment, enticing incentives for disregarding values, systematic jobs, links between business, auditors, bureaucrats and politicians, short-term positions that discourage long-term vision but encourage shortcuts, and both struggling and successful units. It is important to address these struggles at both micro and macro levels and promote public unity among those in power in order to achieve conclusive corporate administration. However, even with proper systems in place, fair norms of behavior and compliance with legal provisions are essential for success.The country's surrounding environment is marked by a lack of discipline and unchecked political actions, which demonstrate a glaring absence of fair conduct. There is also a prevalence of unethical practices such as Syco-Fancy, prioritizing profit over moral values, and selfish and greedy behavior. The responsible members of the management team continuously strive to benefit unscrupulous individuals while disregarding genuine claimants.

The lack of fear of facing penalties for engaging in various perverse actions is a notable issue. These issues serve as examples, and there are many more similar issues that can be considered. Given this context, the writer raises several questions, such as: Should we seriously examine the wisdom of adopting

the currently popular personalized model of canonized CEOs and their obscene compensation and lifestyle protection? Should leadership qualities be assessed based on short-term financial performance or contribution to building socially relevant and operationally efficient people-driven organizations? Is the desire of modern managers for financial rewards and managerial power indicative of a clear erosion of ethical (honesty and integrity) and social (trustworthiness and community spirit) capital in business matters? Can good governance be self-sustaining? Despite implementing the best management practices, can companies be shielded from the prevailing economic, political, and social environment? Can corporate governance establish a haven of purity amidst a cesspool filled with political corruption and sordidness? Is corporate governance possible in the absence of government administration? Do excessive mandatory provisions, guidelines, norms, and strict compliance ensure good corporate governance permanently?To what extent are the provisions, rules, and regulations regarding good corporate governance suitable and effective? These inquiries pose a significant challenge for modern management. In essence, how does management operate in a polluted environment to successfully ensure good corporate governance? Of course, the legal framework establishes mandatory requirements.

However, the execution of these tasks must be carried out by a group of directors who are essentially human beings living within the societal framework. It is impossible for their behavior to be entirely shielded from the corrupt practices mentioned earlier. In order to overcome this difficult obstacle, the researcher believes that public unity is essential. Public unity cannot be relied upon, it must be instilled and willingly embraced.

It is necessary to impart value instruction to individuals so that their character can improve and directors can better their activities. Value instruction for society as

a whole will also improve the surrounding atmosphere and make it more friendly, allowing the challenge to be easily met with success.

Decision:

To conclude, corporate administration is essential in today's world. Although it existed in the past as the concept of social responsibility of businesses and later the concept of social audit, it has become more significant recently due to faster integration of different countries globally. However, its success requires widespread impact of ethical and value instruction, which will greatly contribute to creating a more conducive environment and enable modern management to successfully meet the challenge.