Corporate Ethics in the Post-Enron Era from the Role of a Policy Analyst (Name) (University) (Course) (Tutor) (Date) Introduction In the past ten year the issue on corporate governance has featured in the press over the world most importantly because of the effect it poses on public interest, the economy and the society in general…
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It evident that for those companies that collapsed, most of them exhibited symptoms like conflict of interest in dealings, exaggerated compensation packages, manipulation of voting rights etc. All these issues have renewed the need to strengthen corporate governance by inculcating business ethics in corporate dealings. Accordingly for us to tackle the issue of corporate governance, the basic principles and concepts in corporate governance need to be discussed (McDonald, 2007). Ethics as a concept refers to concepts or maxims of right or wrong behavior in the society. Ethics can be equated to morality. The critical question to be asked on ethics with regard to corporate governance is whether ethics has a place in this profit centered capitalist economy. The answer lies in the experiences highlighted above on business malpractices whose consequences have not only affected the shareholders only but also the general public at large. Corporate governance involves the assignment of duties and rights amongst all the participants in a corporation from the board of governors all the way to the stakeholders. It also provides for structures for achieving set objectives and decision making. At the same time the corporation exists within a society, thus societal ideals such as fair dealing, transparency, accountability and responsible citizenship must be upheld by the corporate entity. All these societal values have to be incorporated into the concept of corporate governance. This is to say that the corporation has to consider both the legal and social values in its pursuit of better corporate governance. Encompassing the aspect of societal values and norms dictates that the participants in the running of modern day corporations ascribe to the principle of corporate citizenship. The principle of corporate citizenship entails the commitment of individuals to unquestionable ethical behavior in corporate affairs (Cross & Miller, 2012). This principle sits well from the strategic and the operational levels of an organization as it is usually tied up with board leadership and corporate image. It is therefore imperative that for any business to be sustainable in these globalized and interconnected world all the corporate players have to recognize that the operating environmental, social obligations, and governance responsibilities are integral to corporate performance and sustenance (Cross & Miller, 2012). All these factors will determine company profits. The case of companies like Enron reflects a new dimension of corporate governance. This dimension entails strategic thinking by the board of directors in providing leadership beyond short term financial performance. The corporate leadership, boards of directors, shareholders, and the modern role of the CEO, must be prepared to provide strategic leadership and oversight on issues to do with the environment as this presents substantial reputation risk. They must also commit to creating shareholder value through engaging in activities which will increase access to markets while at the same time mitigating against immediate tangible and anticipated future risk (Bernstein, 2004). General Policy recommendations Several policies and strategic thinking
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