Corporate governance and business ethics

Document Type:Thesis

Subject Area:Business

Document 1

It is a system that consists of processes, practices, and rules that balances the interest of various stakeholders such as employees, shareholders, clients, management, and the government. Andrei Shleifer and Robert Vishny assert that “corporate governance deals with ways in which suppliers of finance to corporation assure themselves of getting a return on their investment. ”2 Importantly, through corporate governance, companies set and achieve objectives within the regulatory, social, and market environment. Good governance ensures effective and ethical implementation of a company’s core functions. It also adds value to an organization by guaranteeing the equitable allocation of resources, service provision, and improved efficiency. Conversely, corporate management concerns the day to day operations of a company in a manner that ensures that the policies, strategies, procedures, and processes set by the governing body are followed to the latter. According to the World Bank Group, the core functions of governance are; strategic decision, management oversight, stakeholder participation, risk management, conflict management, and audit and evaluation. On the other hand, the primary functions of management are program implementation, regulatory compliance, reviewing and reporting, administrative efficiency, stakeholder communication, learning, and performance assessment. It should be noted that the management functions vary by the legal arrangement and the type and size of an organization. The stated functions of both governance and management are not exhaustive and may include other function depending on factors such as the industry in which the company operates. Continental European vs. Anglo-American Model of Corporate Governance The difference between the Continental European and Anglo-American model is that the former uses a unitary board while the latter uses a supervisory board.

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In the unitary board structure, both executive and non-executive directors are members of the board of directors. For instance, Tesla Inc. a New York Stock Exchange-listed company, uses the Anglo-American model. Elon Musk doubled up as the chairman of Tesla’s board and the chief executive officer (CEO) before being ousted as the chairman of the board. In the supervisory board structure, companies have two distinct tiers: the upper supervisory board and the lower management board. The supervisory board members are exclusively outsiders while the management board (lower board) consist entirely of executive directors. Deutsche Bank, the biggest in Germany, uses the two-tier structure. The supervisory board headed by Dr. Specifically, human resource departments do conduct background check on potential employees to decide on who to hire among a pool of candidates.

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Such measures are all in an effort to improve workplace productivity. It is the right of an employer to use surveillance to strengthen security. Monitoring employees through cameras and others means help prevent internal theft, ensures proper use of company resources, and improve employees’ productivity. For instance, the time and attendance systems helps monitor the time were fully engaged. In case the employer records or listens in to a conversation, both parties involved in the communication must be informed of the fact that their conversation is being recorded or monitored. Video Surveillance For both security and safety purposes, private firms have the right to surveil on their employees using cameras. In doing so, it is the right of employees to be notified that they are under camera surveillance. Camera surveillance should only record video and the audio bit as it amounts to wiring which is illegal.

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Employers must also have a valid reason to legitimize the need for surveilling on their customers. Additionally, FLO conducts inspections with their producers to ensures that they adhere to the standards. The Fair Trade Mark brings consumers and producers in a convenient manner that ensures that lives of producers are improved. It is an alternative to conventional international trade that exploits poor farmers. The Fair Trade has become a global phenomenon and over eight million Fairtrade hot drinks are consumed every day in Britain. In Belize, Brazil the Fairtrade have benefited over 6000 farmers and has allowed $4 million to be invested in the communities. However, producers have found a way to circumvent consumer sovereignty by employing specific strategies. The billion-dollar pharmaceutical industry has witness instance where the company exploit patients by charging high prices on drug which allows them to rake in billions in profits.

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In 2018, the industry made approximately US$ 23 billion in profits. Calls have been made to ban the interaction between drug representatives and physicians because of conflict of interest. The conflict arises when physician’s independent judgement is influenced in some way by drug representatives. The OECD principles of corporate governance.  Contaduría y Administración, (216). Shleifer, A. Vishny, R. W. Retrieved August 1, 2019, from https://www. investopedia. com/news/elon-musk-out-board-chairman-tesla-settles-sec/ 5. Supervisory Board. Retrieved from https://www. nytimes. com/1998/05/13/business/international-business-nike-pledges-to -end-child-labor-and-apply-us-rules-abroad. html 7. Chimonas, S. Brennan, T.

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