Ethics In Corporate Governance

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WHAT IS ETHICS Ethics is a reflection on moral practice that concerns with customary practice and social in defining what is wrong and rights. Based on the public asking, ethics has to do with the feelings tell although it right or wrong or being ethical in what the law requires. Many meanings can use as long it good for the companies and other people. INTRODUCTION OF CORPORATE GOVERNANCE The global financial crisis starting in 2007 added further strands to corporate governance policy and practice. Based on the definition of corporate governance is corporate governance refers to a system that firms are directed and organized (Cadbury Report, 1992) or also define the connection between stakeholders, management, and board of directors of a company and effect how that company is working. Governance structured specifies the distribution of rights and responsibilities among the different participants in the firms. Now days, shareholders have a higher expectations that companies must be run in accordance with a transparent and fair in corporate governance. The corporate governance become more important in company because many shareholders consider lack of true and fair in corporate governance, it became one of the main challenges how to overcome it. The corporate governance framework should ensure the company’s strategic guidelines, effective monitoring of management by the Board, and the accountability of the Board to the shareholders and the company. Corporate governance as involving a set of relationship between a company managements, Shareholders, Boards of Director and monitoring company’s performance. Governance is about seeing that it is run properly (Professor Bob Tricker, 1984). Malaysia start the code on Corporate Governance ... ... middle of paper ... ...ebate on separation of powers by severe the position of the chief executive directors and the chairman, due to huge power that could be centered in a single person having the two positions. Excessive Business Risk Taking and Lack of Risk Control To taking higher business risk, investors are expected higher rewards to compensate. Sometimes the director of companies might take decision planned. Profits and dividends should be expected to go up if company makes decision that increases the scale of the risk it faces. Ethical Issues and Corporate Governance Corporate governance only can provide a system or guidelines that is seen to be ethical, true and fair to shareholders. Important company to be aware of the need to maintain a culture of good corporate ethics and the perception of ethical issues by external pressure groups can affect the reputation of the company.
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