Business and Economics Journal

A Focus on Corporate Governance and the Relationship with Business

Abstract

Vartikka Indermun and Mohamed Saheed Bayat

Corporate governance and business has become the focus for the 21st century. Corporate governance is about the way power is exercised over corporate entities. Business will ensure that the way companies are governed ethical dimensions and power is exercised over them. In other words, business ethics is inherently part of corporate governance. It is not an optional exercise in corporate citizenship. In today’s environment stakeholders have high expectations that companies should be run in accordance with good corporate governance practices. As a practical matter, many companies recognise that to encourage positive behaviours and repeat business with their customers, they need to undertake their business in the right way. Companies therefore draw up their values, embed them with their employees, and monitor that they do business according to them, knowing they will be held to account if they do not. The values espoused include for example integrity, honesty and openness. However not all companies do this. The questions of what is the “right way to run a business” are inherent in all aspects within corporate governance which will include an ethical focus. Corporate governance lies at the very heart of the way businesses are run. The extent to which business decisions reflect values and principles is a key to long term success. The article focuses on various dimensions and obligations and ultimately looks at different elements and stages in relationship to various practices. A focus of Friedman’s theory is also provided and ultimately the characteristics of the King Report on Corporate Governance is reflected and discussed.