Business Ethics Essay

417 Words2 Pages
Discuss the relationship between business ethics and corporate governance A simplified definition of business ethics and corporate governance is that business ethics represents values, principles or characteristics that an organization adheres to when transacting business in an economy. Corporate governance on the other hand is an internal framework that an organization establishes and implements for self-governance and to protect the interests of its stakeholders. Business ethics and corporate governance are related in the sense that those entrusted with the role of leading or governing an organization, determine which ethical principles to adhere to in the governing of the organization. In cases where the people entrusted with the governance of the organization are doing so on behalf of shareholders only, then the issue of the agency theory comes in and their ethics will be limited to how the activities they are conducting will advance the interests of the shareholders, while relegating other stakeholders’ interests. The relationship between business ethics and corporate governance can be seen by closely examining the core values that make up corporate governance which are i) Fairness ii) Accountability iii) Responsibility iv) Transparency. These core values give the impression that corporate governance imposes ethical obligations upon corporations (Rossouw, Van Der Watt & Malan 2002). An organization’s mission statement is another area in which the relationship between the business ethics and corporate governance can be seen. While the organization’s mission statement outlines its purpose and planned standard of excellence for operating in the business environment, the moral principles which is some cases is the policy of the organization, provide guidelines of the ethical approach the organization uses to achieve its mission or purpose. Business

More about Business Ethics Essay

Open Document