Directors Code Of Ethics Case Study

CHAPTER 1: INTRODUCTION

The director’s code of ethics is a major part of corporate governance in Malaysia. Actually it is not only in Malaysia, because code of ethics of the directors is very important for every single director in the world in sense of corporate governance. First of all, corporate governance refers to the process and structure by which the business affairs of the company are directed and managed in order to enhance long term shareholder value through enhancing corporate performance and accountability, as well as taking into account the interest of other shareholder. Generally director is known as the one who supervise, regulate as well as controls an organization but the simplest definition of directors is he or she is the

It concerns with the discipline of an individual as well as the society. The origins of the words ethics are from Aristotle where he stated that, ethics was more than a moral as well as legal or religious concept. In legal perspective, legislation of ethical behavior has their ancient roots. For example, the Code of Hammurabi is one of the earliest law codes developed during the eighteenth century. This code has made Bribery as a crime in Babylon back then. The system of law in our life today is closely related to ethics where the law is used to enforce definite rights and duties. As ethics is one of the most important things, most of the company in Malaysia have implement and listed down the code of ethics of their directors. Moreover, Code of Ethics for Company Directors also has been listed down in the portal of Suruhanjaya Syarikat Malaysia. This is because; a position of trust with the public, stakeholders, officers and the employees of the corporation is hold by the director. So that, an appropriate standard of conduct as well as the ethical behavior is the most important things for the sake of a corporation reputation. As a conclusion, the Code of Business Conduct and Ethics for Directors is established in order to reflect the Board’s commitment to such

Achieving excellence in corporate governance by promoting good compliance and corporate governance culture as well as strengthening self and market discipline is one of the objectives of MCCG. The MCCG 2012 had sets out for about eight principles which followed by 26 corresponding recommendations. The principles mentions above are an establishment of clear roles and responsibilities, strengthen composition, reinforce independence, foster commitment, uphold integrity in financial reporting, recognize and manage risks, ensure timely and high quality disclosure and lastly strengthen relationship between company and shareholders. The first principles of MCCG which is roles and responsibility of the board shows that director’s code of ethics is a major part in corporate governance in Malaysia. where in this principles, formalizing ethical standards through a code of conduct and ensuring that company strategies promotes sustainability is required to be done by the directors. Moreover, this principle also is being expected also to formalize a Board charter. In sense of ethical issue, the director required to questioning themselves about the