Corporate Governance and Ethical Considerations
Corporate Governance and Ethical Considerations
Ethical Considerations
Reported and Presented by:
Group 3
01 02 03
Elements and Corporate Corporate
Concepts of Governance and Governance and
Corporate the Agency the Stewardship
Governance Theory Theory
01
04 02
05 03
06
Corporate Individual and Potential
Governance and Situational Problems in
the Stakeholder Influences on Corporate
Theory Ethical Behavior Governance
1.Elements and Concepts
of Corporate
Governance
• Director Independence and
Performance
• A Focus on Diversity
• Regular Compensation Review and
Management
• Auditor Independence and
Transparency
• Shareholder Rights and Takeover
Provisions
• Proxy Voting and Shareholder
Influence
2. Corporate
Governance and the
Agency Theory
• It involves the problem of
directors controlling a company
while the shareholders own the
company.
• Agency theory identifies points of
conflict among corporate interest
groups.
• Corporate governance holds that
firms are basically units of conflict
rather than unitary profit-seeking
machines.
3. Corporate
Governance and the
Stewardship Theory
Stewardship theory of corporate
governance is a normative alternative
to agency theory. This article argues
that the stewardship behavior of
managers results in exemplary
corporate governance practices when
the espoused values of the firm are
aligned with the enacted values.
4. Corporate Governance
and the Stakeholder
Theory
The stakeholder theory of corporate
governance focuses on the effect of
corporate activity on all stakeholders of
the corporation, as opposed to focusing
on the corporate effect on the
shareholders. The theory also
incorporates the interests of any third
parties that have some level of
dependence on the corporation.
5. Individual and
Situational Influences on
Ethical Behavior
• Individual Factors:
- Moral Development
- Personal Values and Personality
- Family Influences
- Peer Influences
- Life Experiences
• Situational Factors
6. Potential Problems in
Corporate Governance
• Conflicts of Interest
• Oversight Issues
• Accountability Issues
• Transparency
• Ethics Violations