When investigating the possibility of doing business in Asia the owners of XYZ Construction Inc. must look at both the social and ethical issues that might arise along the way. The moral challenge for businesses in the United States it hard enough when balancing profit interests against the needs of workers, customers, governments and special interest groups. The moral challenge is even more severe for multinational companies who need to live up to moral potentials both in the US and in host foreign countries. In developed countries, the moral prospects of the host country are as stringent as in the US. With third world host countries, though, the moral expectations are frequently more lax and multinationals are enticed to lower their standards when circumstances allow (SKS 7000-Executive Concepts in Business Strategy, 2011).
Australia, Singapore, and India all have corporate governance regulatory systems that are based on corporation legislation that presents for mandatory minimum standards dealing with matters such as directors' duties, members' remedies, and shareholder rights at meetings, and default rules for company foundations. These obligatory rules may be compulsory by civil actions brought by injured parties and criminal proceedings brought by the respective regulators. These minimum obligatory requirements cannot successfully deal with issues relating to matters such as board role, structure, and make up. These purposeful matters are dealt with by codes of globally documented corporate governance best practice sanctioned by a variety of stock exchanges and directed at listed companies. This comprises an appearance of self-regulation because it is not compulsory for companies to follow the best practice principles. The universal approach is to necessitate listed companies to reveal in their annual reports the corporate governance practices they have agreed to throughout the relevant year. The listing rules set out comprehensive endorsed practices, and companies are required to state the degree to which they have taken on these practices. Those companies that go away from the suggested practices are required to make clear why they have done so (Kimber & Lipton, 2005).
The underlying principle behind this approach is to make sure that the market is knowledgeable about a company's corporate governance practices. At the same time, there is also acknowledgment that suitable practice may differ from company to company. In particular, smaller listed companies frequently find it hard to meet the terms of requirements such as foundation of several board committees where they have comparatively small boards (Kimber & Lipton, 2005).
Shivdasani, A., & Zenner, M. (2004). Best practices in corporate governance: What two decades of research reveals. Journal of applied corporate finance, 16(2/3), 29-41.
When travelling for business between different countries it’s very important to understand the different ethical practices. When looking into the different ethical business practices in organizations we will look at the four largest and fastest developing countries which are commonly known as BRIC; Brazil, Russia, India, and China. There are many similarities between these countries; however India and Brazil seem to have a more favorable ethics rating than China and Russia. While there are similar perceptions on ethical business practices, these ideas are not shared globally. As these four countries grow economically, it’s becoming more important for business leaders to understand their ethical differences.
Bibliography: Turnbull, S. (1997). Corporate governance: its scope, concerns and theories. Corporate Governance: An International Review, 5 (4), pp. 180--205.
Explain the role of the Australian Securities and Investments Commission (‘the ASIC’) and discuss the significance of this role for proper corporate governance in the twenty-first century.
Business ethics simply can be defined as the application of business values in the business practice of a company (Seawell 2010, p. 2). For a multinational company, business ethics is one of the critical aspects need to be taken into account in business decision-making processes. Failure to give attention on ethics may bring consequences on company’s reputation (Meyer & Jebe 2010, p. 159). The company is expected not only to pursue its own profits but also contributing to the environmental and social welfare of the community where it operates (Svensson & Wood 2008, p. 308).
Nottingham Trent University. (2013). Lecture 1 - An Introduction to Corporate Governance. Available: https://now.ntu.ac.uk/d2l/le/content/248250/viewContent/1053845/View. Last accessed 16th Dec 2013.
In conclusion, companies that seek to integrate into global markets usually encounter several problems because of the effect of globalization on business practices. The challenges originating from such integration is attributed to the differences in cultures in various societies across the globe. As evident in Google’s dilemma in China, there is no single set of universal ethics that are applicable to all settings and societies across the globe. Companies such as Google need to develop varying ethical standards that are relevant and appropriate to various nations and cultures in the world. This would enable the companies that are integrating into global markets to avoid ethical issues while maintaining effective business practices.
The Corporations Act 2001 (Cth) (the Act) places great emphasis on good corporate governance. Along with the rights and powers conferred by the Act, directors are also subject to a wide range of duties that are owed to the company, including members and shareholders. The duties mentioned in the Act occur concurrently with the general law duties. In order to ensure compliance with the legislation, the Act has implemented the use of civil penalty provisions to target the perceived shortfall of the previous methods of corporate law administration. Actions for contravention can only be brought forth by the Australian Securities and Investments Commission (ASIC) in its role as watchdogs of corporate law.
The Australian Stock Exchange’s (ASX) Corporate Governance Council (2014) defines corporate governance as “A framework of rules, relationships, systems and processes within and by which authority is exercised and controlled within corporations”. One goal of corporate governance is for the board members to increase shareholder value (Tricker 2015). In order to achieve this, it is important that the board act appropriately and justly so that the best interest of investors are protected. This report will explore the effectiveness of JB Hi-Fi’s corporate governance. JB Hi-Fi is Australia’s largest home entertainment retailer, selling a variety of products at discounted prices. Over the years, they have maintained a substantial
With good corporate governance, the costs of capital are lowered, transaction costs are reduced and firms are encouraged to use resources optimally (Balgobin 2008). The board comprises of 11 members, the chairperson, seven independent directors, two non-executive director, and one executive director (Chief Executive Officer). This is reflective of a unitary board with majority non-executive directors which is typical of significant listed companies in the United States of America and is in compliance with NYSE requirement for listing. In addition, the size of the board is similar to most publicly-traded companies in the US which was discovered to have between 8-11 members. By-law of the Company however, provides for a larger number at the discretion of the board.
Prior to the mid 1960’s: Although many philosophers and business leaders emphasized the importance of implementing business ethics in companies, but it had not been taken seriously by the Japanese business community. Japan’s attention after WW2 was its economic development, and this explains why its companies never seemed to address any social or environmental
Based on this article, Malaysia involved in the economic crisis in the end of 1997. The Malaysian economic downturn exposed the consequences of poor corporate governance and prompted the formation of a high level Finance Committee on Corporate Governance (FCCG). The main focus of FCCG is to review and reform corporate governance in Malaysia comprehensively. In order to make a reformation, FCCG has played their role by sets out the principles of good corporate governance for Malaysia as a guideline and also proposes the code of best practice for companies. All of the recommendations of these principles are to strengthen laws, enhance disclosure and transparency, promote effective enforcement and emphasis on training of directors. Malaysian Code emerged from an urgent demand for businesses to exhibit greater transparency and accountability as it is largely modeled after the UK Codes. In UK, listed company under London Stock Exchange must disclose in their annual report the extent of compliance. The Hampel report’s main objective is to produce a set of general principles that allow flexibility in interpretation. Then the UK Code Combined derived from the Hampel report. So, there are similarity that we can see here when all companies in Bursa Malaysia are al...
As far as the Asian countries concern regarding the corporate governance issues, they started to enforce their own Code of Corporate Governance to avoid any financial crisis in the future. Among the countries that established the Code of Corporate Governance after the financial crisis were Malaysia and Singapore, which in the year 2000 and 2001 respectively (OECD, 2014). In contrast, Hong Kong has become the first Asian country that produced the Code of Best Practice, which was officially released in 1993 (ACGA, 2012). By having the Code before 1997 Asian financial crisis, Hong Kong became a top-ranked country with strong corporate governance practice in early 2000s. However, as the development of corporate governance practices were actively took place in Asia, Singapore replaces Hong Kong at the top in 2010 while Malaysia shows good performance in improving its corporate governance practices (Lees, 2010). The improvement of corporate governance among these three countries can be seen by the revision of their ‘Code’. Hong Kong Stock Exchange revised the Corporate Governance Code in 2004, followed by Singapore in 2005 and Malaysia in 2007 (OECD, 2014). In 2012, these three countries faced t...
The ethics and moral obligations of multinationals doing business in a repressive regime has been debated for decades as there are ongoing violation for human right such as limiting human freedom and development; social, economic, and environmental practices.
The office of the Director of Corporate Enforcement (ODCE, 2015), Ireland defines Corporate Governance as “the system, principles and process by which organisations are directed and controlled. The principles underlying corporate governance are based on conducting the business with integrity and fairness, being transparent with regard to all transactions, making all the necessary disclosures and decisions and complying with all the laws of the land”. It is the system for protecting and advancing the shareholder’s interest by setting strategic direction for the firm and achieving them by electing and monitoring the capable management (Solomon, 2010). It is the process of protecting the stakes of various parties that have their interest attached with a company (Fernando, 2009). Corporate governance is the procedure through which the management of the company is achieving the goals of various stake holders (Becht, Macro, Patrick and Alisa,