BECSR concepts rapid review

Meaning	Business Ethics: In a broad sense, ethics in business refers to the application of day-to-day moral and ethical norms to business. Business ethics are the principles and standards that determine acceptable conduct in business organisation.  Requirements: Being ethical in business requires acting with an awareness of - (a) The need for complying with rules (e.g) (i) laws of the land, (ii) customs and expectation of the community (iii) principles of morality (iv) policies of the organization and (v) general concerns such as the needs of others and fairness. (b) How the products, services and actions of a business enterprise, can affect its stake holders (i.e. employees, customers, suppliers, shareholders and community I society asa whole) either positively or negatively.
Determinants	Individual factors,  Organizational factors/relationships, Organizational culture,  Ethical climate,  Opportunity/environment,  What encourages or discourages unethical behavior? Thus, business ethics deals with morality in business environment. It involves moral judgment based on understanding of the society. It extends beyond the legal questions and involves goodness and badness of an act. 1. Business ethics refers to the application of everyday moral or ethical norms to business. It requires an awareness of how the products and services of an organization and the action of its employees, can affect its stakeholders and society as a whole, either positively or negatively. 2. Ethics in business organization relates to a corporate culture of values, leadership, p rograms and enforcement. 3. It is that set of principles or reasons which governs the conduct of business at the individual or collective level by the application of ethical reasoning to specific business situations and activities.
Increasing Importance	Importance of Business Ethics in Organisation: Improves Standard of behavior, True North principles leads to a more effective business practices, Short term gain and long term pain can be avoided and lead to short term pain and long term gain, Value bases leadership creates ethical practices, Improves moral values of employees, Helps in creating strong independent Board, Regulates Ethical behavior of industry as a whole,  Helps in regulating IT security and private confidentiality
Definition	Definition: According to “William Shaw” business ethics is the study of what constitutes right and wrong or good and bad human conduct in business context.
Functional aspects of business ethics	o   Ethics of Accounting Information o  Ethics of HRM o  Ethics of Sales & Marketing o  Ethics of Production o  Ethics of Intellectual Property, Knowledge and skills
Advantages	The advantages or benefits of business ethics are as follows: 1. Improvement of society:  2. Maintaining moral course in turbulent times: 3. Strong teamwork and productivity:  4. Employee growth:  5. Ensure that policies are legal:  6. Compliance with law:  7. Total quality management:  8. Diversity Management:  9. Strengthens the organization: i. Managing ethical value in business legitimizes managerial actions. ii. Strengthens the coherence and balance of the organization’s culture. iii. Improves trust in relationship between individuals and groups iv. Supports greater consistency in standards and qualities of products v. Cultivates greater sensitivity to the impact of the enterprise’s values and messages.
Need & Increasing significance	There is a ‘social contract’ between society and shareholders, under which society bestows upon business firms the authority to own and use its natural and human resources. In return society expects that productive organizations will enhance the general interests of consumers, employees and community. In conduct of their activities business firms are expected to honour social rights, justice, equity and fairness. Business ethics provides a set of moral principles which should govern the conduct of business. These moral principles help business people to judge the social consequences of their decisions and actions. In general, ethical behaviour is becoming increasingly significant in business due to the following reasons: 1. Moral Consciousness: 2. Self-interest: 3. Environmental pressure: 4. Legal imperative:

Corporate governance

Meaning	Corporate Governance is about promoting corporate fairness, transparency and accountability.
Concern	It is concerned with structures and processes for decision making, accountability, control and behaviour at the top level of organization.
Influences	It influences (i) The organization’s objectives (ii) risk monitoring (iii) performance optimization.
Definition	Corporate Governance can be defined as “ the formal system of accountability and control for ethical and socially responsible organizational decisions and use of resources”. The World Bank defines CORPORATE GOVERNANCE as it is about promoting corporate fairness transference & accountability
Main objectives	i) To confirm that rules are followed. (ii) To confirm that proper accounting is done. (iii)To confirm that responsibilities are followed (iv) To confirm that proper control is created In simple words it’s a team of management keeping control & management.
Good Corproate governance Objectives	A properly structured board capable of taking independent and objective decisions is in place at the helm of affairs; The board is balance as regards the representation of adequate number of non-executive and independent directors who will take care of their interests and well-being of all the stakeholders; The board adopts transparent procedures and practices and arrives at decisions on the strength of adequate information; The board has an effective machinery to subserve the concerns of stakeholders; The board keeps the shareholders informed of relevant developments impacting the company; The board effectively and regularly monitors the functioning of the management team; The board remains in effective control of the affairs of the company at all times.
Scope:	Corporate Governance arrangements are key determinants of an organizations relationship with the world. It encompasses the following aspects: (i) The power given to management and control over management’s use of power (ii) Management’s accountability to stakeholders (iii) The formal and informal processes by which stakeholder’s influence management decisions
Advantages	:- i) It takes care of all stake holders i.e. share holders, creditors, debtors holders, workers, customers etc. ii) It avoids to disturb the ethics iii) It creates transparency in all activities. iv) It crates goods image of organization. In this way, CORPORATE GOVERNANCE is the team which creates & maintains corporate social responsibility in organization.
Principles	Key elements of good corporate governance principles include honesty, trust and integrity, openness, performance orientation, responsibility and accountability, mutual respect, and commitment to the organization. Commonly accepted principles of corporate governance include: ·         Rights and equitable treatment of shareholders, ·          Interests of other stakeholders, ·         Role and responsibilities of the board, ·         Integrity and ethical behavior, ·         Disclosure and transparency
Good CG characteristics	Good Corporate Governance has some major characteristics. They are as follows:- 1. Participatory 2. Consensus oriented 3. Accountable 4. Transparent 5. Responsive 6. Equitable and inclusive 7. Efficient and effective; and 8. Follows the rule of law.
Role of committies	Role of different committees in regulating corporate governance: The core roles of the various committees in regulation of corporate governance are as follows: 1. Board of Directors: 2. Audit Committee: 3. Compensation Committee: 4. Nomination Committee:  5. Investor Services Committee: 6. Corporate Management Committee:  7. Divisional Management Committee:
Issues	Issues involving corporate governance principles include: ·         internal controls and internal auditors ·         the independence of the entity's external auditors and the quality of their audits ·         oversight and management of risk ·         oversight of the preparation of the entity's financial statements ·         review of the compensation arrangements for the chief executive officer and other senior executives ·         the resources made available to directors in carrying out their duties ·         the way in which individuals are nominated for positions on the board ·         Dividend policy
Legal framework in india	In India section 229 of the companies Act, 1956 and clause 49 of listing agreement with SEBI contains the legal frame work of Corporate Governance. Corporate governance in India is evident from the various legal and regulatory frameworks and Committees set relating to corporate functioning comprising of the following: Companies Act, 1956 dealing with Governance of Companies, especially in Part VI dealing with management and administration of companies.,  Monopolies and Restrictive Trade Practices Act, 1969 (replaced by new Competition Law), Foreign Exchange Management Act, 2000, Securities and Exchange Board of India Act, 1992, Securities Contract Regulation Act, 1956, The Depositories Act, 1996, Arbitration and Conciliation Act, 1996, SEBI Code on Corporate Governance, CII Code of Desirable Corporate Governance (1998), UTI Code of Governance (1999), Kumar Mangalam Birla Committee on Corporate Governance (2000), Naresh Chandra Committee (2002), N.R. Narayanamurthy Committee (SEBI-2003), Has been there in one form or another ever since the advent of Joint Stock Companies, Provisions dealing with Accounts & Audit, Directors, Prevention of Oppression and Mismanagement are noteworthy

CSR

Meaning	The concept of corporate social responsibility means that organizations have moral, ethical, and philanthropic responsibilities in addition to their responsibilities to earn a fair return for investors and comply with the law.
Need	Need for social responsibility: 1. The iron law of responsibility 2. To fulfil long term self-interest 3. To establish a better public image 4. To avoid government regulation and control 5. To avoid misuse of National Resources and Economic Power 6. To convert Resistances into Resources 7. To minimise Environmental  damage.
Increasing Influences	The key developments have taken place over the last decade to increase focus on social responsibilities 1. Increased stakeholder activism:  2. Engagement of stakeholder: 3. Proliferation of codes and guidelines: 4. Concept of value chain: 5. Transparency and reporting: 6. Corporate Social Responsibility & corporate governance: 7. Growing pressure from investors and markets: 8. Information technology: 9. Pressure to quantify Corporate Social Responsibility “ROI”:
Definition	Corporate social responsibility (CSR) can be defined as the .economic, legal, ethical, and discretionary expectations that society has of organizations at a given point in time. (Carroll and Buchholtz 2003, p. 36).
Main objectives	The concept of Corporate Social Responsibility (CSR) focuses on the idea that beyond making profit, a business has social obligations. It is the responsibility of the companies to produce an overall positive impact on the society. CSR is pursued by business to balance their economic, environmental and social objectives while at the same time addressing stakeholders’ expectations and enhancing shareholders’ values. Stakeholders, including shareholders, analysts, regulators, labour unions, employees, community organisations and mass media expect companies to be accountable not only for their own performance but for the performance of their entire supply chain. Issues such as peace, sustainable development, security, poverty alleviation, environmental quality and human rights have a profound effect on business and its environment. Corporate Social Responsibility is the continuing commitment by businesses to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.
Advantages	The benefits of Corporate Social Responsibility, i.e. “good corporate citizenship” are :1. Achievement of long term objectives: 2. Improved financial performance 3. Reduction in operating costs: 4. Brand image and reputation: 5. Increased sales and customer’s loyalty: 6. Ability to attract and retain employees: 7. Reduced regulatory oversight: 8. Access to capital: 9. Helps minimize ecological damage: 10. Increased productivity and quality of work life: