UNIT-1 INTRO Ethical Processes in Life Corporate Governance

Definiton: OF BUSINESS ETHICS Ethical processes in life involve consistently aligning one's Corporate governance refers to the system by which companies
Business Ethics refers to the principles, values, and stan actions with moral principles, such as honesty, integrity, are directed and controlled. It establishes a framework of rules
dards that guide behavior in the world of business. It accountability, and fairness. These processes include: and prac ces that define the roles and responsibili es of the com
involves the applica on of ethical principles to business 1. Self-Awareness: Understanding one’s values and moral pany’s management, board of directors, shareholders, and other
opera ons and decision-making. @ KEY ELEMENTS OF responsibili es. 2. Cri cal Thinking: Evalua ng decisions to stakeholders to ensure accountability, fairness, and
BUSINESS ETHICS: 1. Integrity and Honesty: Maintaining determine their ethical implications. 3. Empathy: Consider transparency in business opera ons. Introduc on to Corporate
trust through transparent and fair prac ces. ing the impact of ac ons on others. 4. Consistency: Ensuring Governance Corporate governance provides a structure to balance
2. Accountability: Responsibility for ac ons and their that personal and professional behavior adheres to ethical the interests of a company's stakeholders, including shareholders,
impacts on stakeholders. 3. Fairness: Trea ng all stake standards. 5. Accountability: Taking responsibility for one's employees, customers, and society. It focuses on:
holders with equality and jus ce. 4. Compliance: Adhere actions and decisions. Ensuring ethical conduct and transparency in decision-making.
nce to laws, regula ons, and standards. 5. Corporate Code of Conduct Aligning corporate objec ves with societal goals.
Social Responsibility (CSR): Considering the impact of A Code of Conduct is a set of guidelines that outlines the Enhancing stakeholder trust through accountability and effec ve
business on society and the environment. IMPORTANCES ethical expecta ons for behavior in specific professions. management.
Builds trust with stakeholders. Enhances corporate It serves as a standard to uphold integrity, professionalism, Key Components:
reputa on. Promotes long-term success and sustain and accountability. Below are the ethical codes for various 1. Board of Directors: The governing body responsible for over
ability. Reduces legal risks. professionals: 1. Managers seeing management. 2. Shareholder Rights: Protec on of share
Honesty and Integrity: Transparent communica on with holder interests and ensuring their participa on in key decisions.
@ DEFINITION OF Corporate Governance @ employees and stakeholders. Fair Treatment: Equal 3. Disclosure Prac ces: Transparent repor ng of financial and ope
Corporate Governance refers to the framework of rules, opportunity and respect for all employees. rational activities. 4. Ethical Standards: Integra ng ethics into
practIces, and processes used to direct and control a Accountability: Taking responsibility for organiza onal business policies and decisionmaking.
company. It ensures that the interests of shareholders actions and decisions. Sustainability: Promo ng practices Importance of Corporate Governance
and other stakeholders are balanced. that benefit the organiza on and society. 1. Enhances Stakeholder Confidence: Ensures trust by demonstra
@KEY PRINCIPALS of Corporate Governance:@ Confiden ality: Safeguarding sensi ve informa on. ting accountability and ethical practices. 2. Promotes Long-term
1. Transparency: Open communica on about financial 2. Public Servants Sustainability: Encourages responsible decisionmaking to achieve
and opera onal performance. 2. Accountability: The Impar ality: Serving the public without bias or favoritism. sustained growth. 3. A racts Investments: Transparent governance
board of directors and management are accountable Accountability: Ac ng in the best interest of ci zens and builds investor confidence and access to capital. 4. Minimizes Risks:
to stakeholders. 3. Responsibility: Ensuring compliance adhering to laws. Integrity: Avoiding corrup on and misuse Reduces risks of corrup on, fraud, and financial mismanagement.
with legal and ethical obliga ons. 4. Fairness: Equal of power. Transparency: Providing clear and honest comm 5. Improves Organiza onal Performance: Ensures effec ve manage
treatment of all shareholders and stakeholders. unication about public policies. Service Orienta on: Prioriti ment and operational efficiency.
## Components: ## zing the welfare of the public over personal gain.
Board of Directors: Governs the company, sets strategic 3. Lawyers Issues in Corporate Governance
goals, and oversees management. Shareholder Rights: Jus ce: Ac ng in the best interest of jus ce and fairness. 1. Conflict of Interest: Arises when board members or executives
Ensures that shareholders can par cipate in key decisions. Confiden ality: Protec ng client informa on. prioritize personal gain over company interests. o EX-: Executives
Audi ng and Monitoring: Internal and external checks to Integrity: Upholding the law and ethical standards of the engaging in insider trading. 2. Lack of Transparency: Insufficient
ensurer compliance. Corporate Policies: Guidelines for legal profession. Loyalty: Represen ng clients with diligence disclosure of financial and opera onal activities. o Effect: Reduces
ethical and effective decision-making. and honesty. Avoiding Conflict of Interest: Ensuring no bias investor trust. 3. Board Composi on: Ineffec ve boards due to lack
####Importance: ##### in represen ng clients. of diversity or independence of members. EX-: Dominance of family
Enhances investor confidence. Promotes financial sta 4. Engineers members in family-run businesses. 4. Accountability Issues: Failure
bility and growth. Reduces risks of corrup on and fraud. Safety and Welfare: Ensuring public safety and environmental to hold management accountable for poor performance or unethical
Aligns business goals with societal expecta ons. Business sustainability. Honesty: Providing accurate technical information behavior. oEX-: Ignoring whistleblower reports.
Ethics and Corporate Governance are interlinked, as ethical and avoiding decep ve practices. Accountability: Taking respon 5. Poor Risk Management: Inadequate systems to iden fy and miti
practices strengthen governance frameworks and vice versa. sibility for engineering decisions and their impact. gate risks. o Effect: Exposure to financial crises or reputa onal dam
Competence: Maintaining technical skills and adhering to age.
Introduction to Business Ethics and Corporate professional standards. Respect for Laws: Following regula ons Obliga ons in Corporate Governance
Governance and standards in all projects. Corporate governance imposes obliga ons on key stakeholders to
Business Ethics and Corporate Governance are essen al for 5. Academicians uphold ethical and transparent practices. 1. Board of Directors:
ensuring sustainable business prac ces. While business eth Intellectual Honesty: Avoiding plagiarism and promo ng original Strategic Oversight: Ensure effec ve leadership and alignment
ics focuses on the moral principles guiding business conduct, research. Impar ality: Grading and mentoring without bias. of business goals with stakeholder interests.
corporate governance ensures accountability and transpar Commitment to Knowledge: Pursuing con nuous learning and Accountability: Monitor execu ve performance and safeguard
ency in organiza onal opera ons. Together, they promote teaching excellence. Respect for Students: Encouraging diverse shareholder interests. Risk Management: Iden fy, assess, and miti
trust and integrity in business. ideas and trea ng students with fairness. gate risks. 2. Shareholders: Participa on: Actively engage in voting
Concept of Business Ethics Ethical Mentorship: Guiding students towards ethical academic on major decisions. Accountability: Ensure their ac ons support
Business ethics refers to the applica on of ethical values, and professional behavior. long-term company success. 3. Management: Ethical Leadership:
principles, and standards in business opera ons. It governs
Integrate ethical prac ces into opera ons. Transparency: Disclose
how businesses interact with their stakeholders, including Environmental Ethics financial and opera onal performance accurately. Compliance:
employees, customers, suppliers, and society at large. Environmental ethics explores the moral rela onship between Adhere to legal and regulatory standards. 4. Regulators: Policy
Relevance in Business: 1. Trust Building: Ethical prac ces humans and the environment. It emphasizes the responsibility Formula on: Establish guidelines and standards for corporate govern
foster trust among stakeholders. 2. Sustainability: Promotes to protect and sustain the natural world while balancing ecolo ance. monitoring: Enforce compliance and take ac on againstti
long-term growth by addressing societal and environmental gical, social, and economic needs. Sustainable Development viola ons.
concerns. 3. Risk Mi ga on: Reduces the risk of legal and Definition:
reputa onal harm. 4. Stakeholder Sa sfac on: Aligns business Sustainable development is the approach to growth and progress Consumer Protection
goals with the expecta ons of society and stakeholders. that meets the needs of the present without compromising the Consumer protec on refers to the measures and laws designed to
Importance of Business Ethics ability of future genera ons to meet their own needs. safeguard consumers from unfair, decep ve, and fraudulent prac ces
1. Enhances Reputa on: Companies with strong ethical practi Key Principles: by businesses. It aims to ensure consumers' rights are upheld, promo
ces a ract investors and customers. 2. Improves Decision- 1. Intergenera onal Equity: Ensuring resources are available for ng trust in the marketplace. @Who is a Consumer?A consumer is any
Making:Ethical frameworks guide managers in resolving future generations. 2. Environmental Protec on: Reducing ecolo individual who: 1. Buys goods or services for personal use, not for
dilemmas. 3. Compliance with Laws: Encourages adherence gical harm while promo ng growth. 3. Social Inclusion: Address resale or commercial purposes. 2. Uses goods or services with the
to regula ons and avoids penalties. 4. Employee Morale: ing inequality and ensuring all groups benefit. 4. Economic permission of the purchaser. Ex- of Consumers: A person purchasing
Creates a posi ve work environment, increasing loyalty Growth: Achieving prosperity while respec ng ecological limits. groceries for their household. A pa ent receiving healthcare services
and produc vity. 5. Social Responsibility: Demonstrates a Relevance: from a hospital. @@ Consumer Protection Consumer protec on involves
commitment to contribu ng positively to society. Promotes harmony between development and nature. policies and laws that empower consumers, ensuring:
Ensures long-term availability of natural resources. 1. Access to Informa on: Consumers are informed about the quality,
Ethical Principles and Their Relevance in Business Minimizes environmental degrada on and ecological price, and safety of products. 2. Fair Treatment: Businesses act ethi
Ethical principles serve as a founda on for fair and responsible imbalance. cally, avoiding unfair trade prac ces. 3. Compensa on for Grievances:
decision-making in business. 1. Integrity: Promotes honesty and Definition: pf Industrial Pollu on Mechanisms are in place for resolving disputes and providing compe
adherence to moral values. 2. Fairness: Ensures impar al treat Industrial pollu on refers to the contamina on of the nsa on. 4. Awareness: Educa ng consumers about their rights and
ment of all stakeholders. 3. Accountability: Holds individuals environment caused by industrial ac vi es, which can responsibilities. @@ Legal Protection to Consumers in India
and organiza ons responsible for their lead to air, water, and soil pollu on. India has several legal frameworks to safeguard consumers, with the
actions. 4. Respect for Stakeholders: Acknowledges and values Types of Industrial Pollu on: Consumer Protec on Act, 2019 being the cornerstone.
the interests and rights of employees, customers, and others. 1. Air Pollu on: Emission of harmful gases and par culates. 1. Consumer Protec on Act, 2019 Objec ve: To provide quick and
5. Transparency: Encourages open communica on and disclosure o Example: Smoke from factories causing respiratory issues. effec ve redressal of consumer grievances.
of relevant informa on. 2. Water Pollu on: Discharge of toxic chemicals into water Key Features:
Normative Ethics bodies. EX-: Untreated industrial effluents damaging aquatic o Rights of Consumers:
Norma ve ethics focuses on establishing ethical standards to ecosystems. 3. Soil Pollu on: Deposi on of hazardous waste Right to Safety: Protec on against hazardous goods.
determine what actions are morally right or wrong. It provides on land. EX-: Chemical spills affec ng agricultural produc vity. Right to Informa on: Access to accurate product details.
guidelines for behavior and decision-making in business contexts. 4. Noise Pollu on: Excessive noise from machinery and factories. Right to Choose: Freedom to select goods or services.
Key Approaches in Normative Ethics: EX-: Disturbances affec ng local wildlife and communi es. Right to Redress: Access to fair compensa on mechanisms.
1. Deontology: Focuses on du es and rules. Ac ons are judged Effects of Industrial Pollu on: Right to Consumer Educa on: Awareness of rights and
based on adherence to rules rather than outcomes. Health hazards like respiratory problems and skin diseases. remedies.
o Example: A company strictly following labor laws regardless Loss of biodiversity and destruc on of ecosystems. o Consumer Disputes Redressal Commissions (CDRCs):
of profit implications. 2. Utilitarianism: Focuses on the conseq Contribu on to climate change through greenhouse gas District, State, and Na onal levels handle consumer complaints
uences of ac ons, aiming to maximize overall happiness or benefit. emissions. Environmental Issues based on the value of the dispute.
o Example: Implemen ng a policy that benefits the majority of Major Environmental Issues Caused by Industrial Activities:
stakeholders. 3. Virtue Ethics: Emphasizes moral character and 1. Climate Change: Employee Issues
virtues such as honesty and courage. o Caused by greenhouse gas emissions. Employee issues involve challenges and concerns related to work
o Example: A leader ac ng with integrity and empathy in decision o Effects: Rising global temperatures, mel ng glaciers, and place rights, responsibili es, ethical conduct, and privacy. Addressing
making. sea-level rise. 2. Deforestion: these issues ensures a fair and produc ve work environment while
Justice and Fairness o Driven by industrial expansion and raw material extrac on. fostering mutual respect and trust b/w employers and employees.
Jus ce and fairness are central to ethical business prac ces, o Effects: Loss of habitats, decreased carbon absorp on, and Rights and Responsibili es of Employees
ensuring equitable treatment for all stakeholders. soil erosion. 3. Water Scarcity: o Overuse and contamina on
Types of Justice: of freshwater resources. o Effects: Water shortages and health Key Rights:
1. Distribu ve Jus ce: Fair alloca on of resources and benefits. crises in communi es. 4. Biodiversity Loss: o Habitat destruc Right to Fair Compensa on: Employees should be paid wages
o Example: Equal pay for equal work. on due to industrial ac vi es. o Effects: Ex nc on of species and according to agreed terms and legal standards.
2. Procedural Jus ce: Fair and transparent processes in decision- disrup on of ecosystems. 5. Waste Management Issues: Right to a Safe Workplace: Protec on from physical and psychol
making. EX( A clear and unbiased employee grievance policy. ) o Improper disposal of industrial waste. ogical harm at work. Right to Privacy: Safeguarding personal
3. Interac onal Justice: Trea ng stakeholders with respect and o Effects: Soil contamina on and increased landfill problems. informa on and monitoring boundaries. Right to Freedom from
dignity. EX- Open and respec ul communica on with employees. Balancing Industrial Growth and Environmental Ethics Discrimina on: Equal treatment regardless ofrace,gender,religion, etc.
To address these challenges, industries must adopt sustainable Right to Organize: Forming or joining unions to represent employee
Relevance in Business: practices: 1. Pollu on Control Measures: Installing filters and interests. 2. Responsibili es of Employees
Promotes trust and loyalty among stakeholders. Reduces treatment plants. 2. Resource Efficiency: Using renewable Adherence to Policies: Complying with workplace rules and regula
conflicts and promotes harmony within the organization. energy and reducing waste. 3. Environmental Regula ons: ons. Performance and Produc vity: Delivering assigned tasks with
Enhances the organizati on’s reputa on and legi macy in Adhering to laws and standards. 4. Corporate Social Respon diligence. Ethical Behavior: Avoiding dishonesty, the , and harass
society. By incorpora ng ethical principles and focusing on sibility (CSR): Investing in community and environmental ment. Respect for Colleagues: Fostering a coopera ve and inclusive
justice and fairness, businesses can achieve sustainable welfare projects. 5. Green Technologies: Using eco-friendly work environment. Confiden ality: Safeguarding sensi ve company
success while contributing posi vely to society. processes and materials. informa on.
Ingraining Ethics in Life
Ingraining ethics in life means embedding ethical principles into
daily ac ons, decisions, and behavior. Ethical living ensures harm
ony b/w personal values and societal expecta ons, promo ng trust
and mutual respect in personal and professional interactions.