PRESENTED BY

K.SUDHARSAN

&

P.SABARI SARAVANAN

MEANING OF ETHICS

THE DICTIONARY MEANING OF THE WORD ETHIC IS THE PRINCIPLE OF CONDUCT GOVERNING

ETICS IS A COLLECTION OF PRINCIPLES OF RIGHT CONDUCT THAT SHAPE THE DECISION PEOPLE OR ORGANISATION

SIMPLY STATED, ETHICS REFERS TO STANDARDS OF

BEHAVIOUR THAT TELL US HOW HUMAN BEING

OUGHT TO ACT IN THE MANY SITUATIONS IN WHICH

THEY FIND THEMSELVES AS FRIENDS,

PARENTS,SOCIETIES AND SO ON.

ETHICS IS NOT RELIGION, MANY PEOPLES ARE NOT

RELIGIOUS, BUT ETHICS APPLIES TO EVERY ONE.

A BUSINESS MAN HAS TO ACT ONLY AS A

TRUSTEE OF THE SOCIETY FOR WHATEVER HE HAS

GAINED FROM THE SOCIETY.

BUSINESS ETHICS PROVIDES THIS GUIDANCE,

INCLUDING THE CONSEQUENCES AND

COMPLICATIONS OF THEIR ACTIONS.

VARIOUS BENEFITS OF PAYING ATTENTION TO BUSINESS ETHICS ARE AS FOLLOWS: REDUCED REGULATORY SUPERVISION INCREASED BRAND IMAGE AND REPUTATION INCREASED SALES AND CUSTOMER LOYALTY REDUCED OPERATING COST/ INCREASED OPERATIONAL

EFFICIENCY IMPROVED FINANCIAL PERFORMANCE ACCESS TO CAPITAL INCREASED PRODUCTIVITY AND QUALITY INCREASED ABILTY TO ATTRACT AND RETAIN EMPLOYEES AVOID SCANDALS, UNETHICAL DECISIONS BY THE

EMPLOYEES

The Manner in which a Corporation is Run◦ Achieving its Objectives

◦ Transparency of its Operations

◦ Accountability & Reporting

◦ Good Corporate Citizenship

The Processes & Operating Relationships that Best Achieve

Organizational Goals

Corporate Governance is the application of

best management practices, compliance of law in true letter and spirit and adherence to ethical standards for effective management and distribution of wealth and discharge of social responsibility for sustainable development of all stakeholders”

ICSI

(INSTITUTE OF COMPANY SECARATARIES OF INDIA)

FINANCIAL COLLAPSES IN UK IN LATE 1980’SWORRIED THE SHAREHOLDERS ABOUT THEIRINVESTMENTS AND THE GOVERNMENT TOO.

THIS PAVED THE WAY FOR NEW SYNERGYWHICH IS TERMED AS “CORPORATEGOVERNENCE”

THIS WAS MAINLY ESTABLISHED ANDDEVELOPED BY THE RECOMANDATIONS OFVARIOUS COMMITTEES

CII (CONFIDERATION OF INDIAN INDUSTRY)

KUMARAMANGALAM AND BIRLA COMMITTEE

NARESH CHANDRA COMMITTEE

DR. J.J. IRANI EXPERT COMMITTEE

IN GENERAL ALL THE COMMITTEES CAME UP WITH THEIR RECOMMANDATIONS TO IMPROVE THE ETHICS AND MORALITY IN THE BUSINESS AND RAISED THE STANDARD OF BUSINESS

WHICH WILL HELP IN INCREASING THE SHAREHOLDERS VALUE.

TO INCREASE THE EFFECTIVENESS OF THE BOARD

TO HAVE AUDIT COMMITTEE AND SHAREHOLDERS REDRESSING COMMITTEE

TO SEPARATE THE ROLE OF CHAIRMAN AND MANAGING DIRECTOR IN WHAT SO EVER NAME CALLED (CEO AND COO)

INDEPENDENT DIRECTORS

OPTIMUM COMBINATION OF BOTH EXECUTIVE AND NON-EXECUTIVE DIRECTORS

Corporate

Board ofDirectors

Management

Shareholders Stakeholders Creditors

Supervisory &enforcementauthorities

Executivedirectors

Ownerdirectors

IndependentDirectors

AS FOR AS INDIA IS CONCERNED ONLY TWO COMMITEES

ARE MANDATORY

AUDIT COMMITTEE ( AS PER SECTION 292 A OF THE INDIAN COMPANIES ACT)

SHARE HOLDERS GRIEVANCE REDRESSAL COMMITTEE.

THOUGH OTHER COMMITTEES LIKE

REMUNARATION COMMITTEE

NOMINATION COMMITTEE

CORPORATE COMPLIANCE COMMITTEE

CORPORATE GOVERNANCE COMMITTEE

ARE NOT MANDATED.

Best Governed Companies excel even in turbulent times

For example, companies that have won

Infosys is amongst the best-governed companies in India and it

has grown significantly even when many IT companies have

vanished.

ICSI

NATIONAL AWARD

FOR EXCELLENCE

IN

CORPORATE GOVERNANCE

2001

ICSI

NATIONAL AWARD

FOR EXCELLENCE

IN

CORPORATE GOVERNANCE

2002

TISCO is one of the lowest cost steel producers in the world and is

amongst the most profitable steel companies. Its corporate

sustainability model and ethical dealings with customer,

government and business partners makes this possible.

ICSI

NATIONAL AWARD

FOR EXCELLENCE

IN

CORPORATE GOVERNANCE

2009

Maruti Suzuki was felicitated for practicing good corporategovernance principles and for implementation of innovativepractices, programs and projects that promote the cause ofcorporate governance. .

ICSI

NATIONAL AWARD

FOR EXCELLENCE

IN

CORPORATE GOVERNANCE

2010

Dr. Reddy Lab’s strong research and development, combined

technical excellence with professional management and best HR

policies has brought it amongst highly respected companies in

India.

These examples tell us

Growing Profits and Reputation

Good Corporate Governance

is key to