ETHICS IN GOVERNANCE

ETHICS IN GOVERNANCE
Human civilization has covered a long journey to reach in this phase of prosperity and tranquility. After scrutinizing the basic elements in the stability of our civilization, we find our moral values, ethics and integrity working as an adhesive between the bricks and soil of it. Ethics is a system of accepted beliefs, morals and values which influence human behavior in every aspect. In other terms, ethics is the study of what is morally right and what is not. The Latin origin of the word ethics is ethicus which means Character. Ethics is not a new phenomenon but has its roots deep in every form of human culture. It has its traces from the very oldest scriptures like Ramayana, Mahabharata & Arthashastra to the newest texts of history.
In public life, ethics is very often used as a synonym or even an interchangeable expression for terms like values, norms, integrity, morality etc. In public administration, ethics focuses on how the public administrator should present himself to act responsibly. Ethics is an integral part of governance. An important dimension of ethics in governance is work ethics. It represents a commitment to fulfill ones official responsibilities with a spirit of dedication, involvement and sincerity. It also implies that a government functionary would love his work and not treat it as a burden or a load. And that efficiency, productivity and punctuality will be the hallmark of his administrative behaviour. Efficiency has been a constant concern of administrative analysis and good governance. Efficiency implies doing ones best in ones job, with a concern for maximum possible utilisation of human, material and financial resources and even for time frame to achieve the prescribed and desired objectives. When we see the quality standards of work and services of government sector in India, we find that the quality of services and goods produced by the government organisations are relatively poorer than normally observed in non-governmental sector. Government schools, government dispensaries and government offices provide an unsatisfactory look and render dissatisfactory services. In fact, the overall work culture in public systems in India is relatively lower than in most of the developing countries. The answer might lie in systemic flaws poor infrastructure, sloppy monitoring, lackluster control and evaluation and almost an absence of reward and punishment system. Yet, the major factor behind the poor quality of output of public systems is the carelessness and callousness on the part of government functionaries. One may very easily escape from the fact that he is not doing his work promptly and efficiently by pretending to be the victim of lesser infrastructure endemic present in the system. Most of the government officials do not have a feeling of `one-ness with their organisation and their job. They do not put their best in their work and are half-heartedly involved in their duties. Resultantly, there are unrealistic policies, irrational decisions, erratic changes in government systems and an indifference towards the beneficiaries of the system.
Work ethics though is an important dimension of governance but not the only one. There are various other forms of ethics related to the governance and personal behaviour which reflects ones own image as ethical or unethical. When we hear that on a mere train accident happened due to technical glitches and drivers mistake, the Prime Minister Lal Bahadur Shastri offered his resignation admittinig his governments failure on the front of protecting lives of common public, we get amazed by the level of ethics one can percolate into his character. There are many people who have set precedence in this area of human behavior. They are from every walk of life. When we talk about ethics in general, it is not mandatory that it should only be followed in governance but it should be followed in every kind of system, be it government or private and every kind of behavior, be it public or personal. Ethical behavior of an auto rickshaw driver who always goes with the meter reading while charging his customers is not in any form lesser than a president who denies to use his public status to manage a mere job for any of his relatives. There are many examples to quote on the integrity of various personalities by which one can be motivated. One can be motivated by the exemplary life of APJ Abdul Kalam or Atal Bihari Vajpayee. Another can be motivated by the ethics shown by Senior IAS officer Ajay Khemka throughout his career or newly appointed IAS Durga Shakti. These incidences clearly show that age, sex, caste, creed or type of post and kind of profession is not any kind of variable for the ethical behavior.
In general terms, lack of ethics & integrity is usually understood as corruption. In India, corruption is an all embracing phenomenon. Taking and giving bribes is the most common factor of it. It is now treated as our way of life. Though corruption is understood as giving bribes to government officials generally, it has broad meaning. Similarly, when we talk about lack of ethics, corruption is not an only attribute to it. Ethics, as whole, is a blend of many aspects. These are fairness & objectivity of governance, responsibility of public servant and his accountability towards public works, compassion of a public servant towards the public it serves, work commitment of public officials and transparency of the entire public machinery. A government official should always work in a symbiotic relationship to the public it deals with. He should be emphatic enough to think himself as a receiver of what he is the giver in present circumstances. A public official should always bear in his mind that he could be at the other end of this giver-taker chain of services.
When we talk about ethics & integrity, we confine our thoughts only to moral obligation of public officials and their administrative system. While most of our focus on administrative morality is on the aspect of probity within the administrative system, there is a need to consider the issue of the responsibility of the governance system to create and sustain an ethical ambience in the socio-economic system that would nurture and protect the basic moral values of the society as a whole. Moral political philosophy assumes that the rulers will not only be moral themselves, but would also be the guardians of morality in a society. In other words, government officials, being on top of the social chain of supremacy, should not only be the actor and protector of ethical values but should also be the guardian of ethics in their society. Frankly speaking, most of the public figures-elected and selected- including politicians of the very top level, top bureaucrats and a common peon do not know the objective behind their existence as a public official. The overall motive of any kind of public job in any part of the world is to serve the public. But we as public official forget this and behave in erratic manner all the time. We cheat our own kinds to establish the fact that we are superior to the others.
The governance is like a giant food web in which each unit complements other units. In governance, the responsibility of ethical behavior and to maintain integrity does not fall only upon the top of chain of command but on every single unit of the entire system. A babu is also equally responsible to act ethically on his part like the head of the department. One need not to put super efforts in his work but by doing merely his job with true morality and responsibility, one can set examples of high ethical values.
It is a well known fact that lack of ethics & integrity in government functions in day to day life has led India towards the ineffectiveness on various social and economical fronts. Most of the other countries which got their independence at the eve of our freedom or even after that, have marched way ahead of us because of their public performances. India lacks at every front today. The reason behind this may be many but lack of ethical approach in our public behavior is one of them for sure. India can grow faster, our economy can boost further, if we can implement proper ethics in our governance. To enforce & implement ethical values and to check corruption in governance, there are uncountable legislation and agencies- both constitutional & legal. But, legislations alone are not enough, along with these, the will; of public servant is also necessary. Therefore, there is a lesser need for new legislation. Instead, we should be able to incorporate such tools in public governance which can curb the corruption at the very beginning of its happening and also which can restrict the public officials to do such unethical behavior even if they are well committed to do it.
Fostering sunshine in governance is one of the finest methods of ensuring higher standards of administrative ethics. Openness is the enemy of corruption. Almost all the leading countries of the world today have Right to Information. India adopted it in the year 2005 and after that we have seen scams after scams to have been surfaced one after another in so lesser years, which, in absence of RTI Act, could have easily been concealed. Another remedy to the enforcement of ethics in governance may be the full fledged implementation of e-governance in public domain. The presence of electronic media in governance can restrict the public official to being unethical.
Mahatma Gandhi while saying, Be the change what you wish to see in the world, have assumed that one should act ethically on his part if he expects ethical behavior from the others. In my opinion, being ethical is not the responsibility of few persons but it is the absolute responsibility of all and further, being ethical should not be an option because it is the necessity of the governance & society to grow as a whole. To talk about ethics is generally considered as an alien element in our behavior. But actually speaking, ethics is not something out of this world phenomenon. To adopt ethics in ones attitude is not a difficult task. By merely doing ones routine work with responsibility and empathy, one can set high measures of ethics before the department. For example if a doctor is treating his patients properly and on time, he is playing his part for creating an ethical world without putting herculean efforts. Similarly, we can create an ethical ambience in governance by doing our normal routine work with sincerity. Ethics, in my opinion, is pure image of what is one from inside. Ethics is something like electricity, not apparent to the naked eye, but felt instantaneously when power is switched on.

Source: A pdf file on internet named as Unit-21- Ethical Concerns in Public Administration
Name: Amit Saini

CORPORATE GOVERNANCE :

CORPORATE GOVERNANCE :
-VINAY KUMAR THAMMI

* DEFINITION: its a system by which corporations are direscted and controlled.

* The system of rules, practices and processes by which a company is directed and controlled. Corporate governance essentially involves balancing the interests of the many stakeholders in a company - these include its shareholders, management, customers, suppliers, financiers, government and the community.

THE ROLE OF CORPORATES IN INDIA:

1. Economic growth and development.

2. Government services and schemes implemnted via the publivate partnership(PPP) mode and hence has a mjor hand in the shaping of indias future

3. Role in improvement of social indicators like education, health, water, basic services.

4. Role in imports and exports and fortifying the ties with our major trading partners

5. Role of corporates in disaster risk managemnet and post disater relief managemnet.

6. Corporate social responsibility to remove the inequalities and develop those areas not being concentrated by the government.

7. With the uhering in of LPG, corporates have undeniable role in trade and commerce and basic service provider

8. With the governmnet moving away from its role in service providing by the way of disinvestments , corporates have a greater role to play.

9. Bridges the gender justice and encourages the merit and skill development.

10. Dividents of demography can be fructified with active intervention of corporates.

11. Helps in inclusive growth and financial inclusion, this being reflected in PC emphasizing its role in 12th five year plan.

12. Helps the economies in coping up with the financial crisis


* The governance structure specifies the distribution of rights and responsibilities among different participants in the corporation (such as the board of directors, managers, shareholders, creditors, auditors, regulators, and otherstakeholders) and specifies the rules and procedures for making decisions in corporate affairs.

* PRINCIPLES OF CORPORATE GOVERNANCE: TheCadbury Report(UK, 1992), the Principles of Corporate Governance (OECD, 1998 and 2004), theSarbanes-Oxley Actof 2002 (US, 2002) has speicified following principles;

* Rights and equitable treatment of shareholders

* Interests of other stakeholders

* Role and responsibilities of the board

* Integrity and ethical behavior

* Disclosure and transparency

* NEED FOR CORPORATE GOVERNANCE:

* The presence of an active group of independent directors on the board contributes a great deal towards ensuring confidence in the market.

* Corporate governance is known to be one of the criteria that foreign institutional investors are increasingly depending on when deciding on which companies to invest in.

* It is also known to have a positive influence on the share price of the company.

* Having a clean image on the corporate governance front could also make it easier for companies to source capital at more reasonable costs.

* It matters for both the clients (in the form of Improving access to capital, Improving performance) and the corporate (for value addition, Reducing investment risk, Avoiding reputational risk, Developing capital markets )

* Dynamic changing structure of ownership




* Importance of social responsibility

* Proliferation and ubiquitous corporate scams in corroboration with state and nonstate entities.

* Regulate acquisition, mergers, takeovers.

* Liberalization and its associated developments, i.e. deregulation, privatization and extensive financial liberalization has made it important.

* Greater role of corporate in the presnt world effecting wider array of public. Hence their regulation and control takes primacy over all others.



* EVOLUTION OF CORPORATE GOVERNANCE FRAMEWORK IN INDIA:

* Companies act of 1956 provided for basic framework for regulation of all the companies in india.

* Securities Contract Regulations Act, 1956 provided for rules and provisions to be complied by the companies.

* SEBI Act, 1992 empowered it to control the corporate in listings and recognitions and enforce discipline in the share markets.

* A separate ministry of corporate affairs has been set up in the government to look into such issues.

* A committee set up under the chairman ship of rahul bajaj by CII , the CII released the code called Desirable Corporate Governance. It looked intovarious aspects of Corporate Governance and was first to criticize nominee directors and suggested dilution of government stake in companies.

* SEBI had set up a Commission under Kumarmanlagam Birla. This committee covered issues relating to protection of investor interest, promotion oftransparency, building international standards in terms of disclosure of information.

* The Department of Companies Affairs (DCA) modified the Companies Act, 1956. It undertakes periodic review and brings about amendments in the Companies Act, 1956. In 1999, the Act introduced the provision relating to nomination facilities for shareholders and share buybacks and for formation of Investor education and protection fund.

* The Department of Corporate Affairs constituted Naresh Chandra Committee in 2002. The committee talks extensively about the statuary auditor-company relationship, rotation of statutory audit firms/partners, procedure for appointment of auditors and determination of audit fees, true and fair statement of financial affairs of companies.

* SEBI appointed Narayan Murthy Committee in 2002. Its report mainly focuses on and makes mandatory recommendations regarding responsibilities of audit committee, quality of financial disclosure, requiring boards to assess and disclose business risks in the companys annual reports.

* Clause 49 of the Listing Agreement : has enlisted following requirements for the corporate governance;

* Independence of board

* Independence of directors

* Duties and remuneration of board and directors

* Role of audit committee and auditors.

* Appointments and powers of independent directors.

* In December 2009, Ministry of Corporate Affairs specified Voluntary Guidelines on Corporate Governance. These guidelines provide for a set of good practices, which will 8help the companies to strengthen their internal governance processes and may be voluntarily adopted by the Indian Public companies.

* In March 2012, Ministry of Corporate Affairs constituted a committee under the Chairmanship of Mr. Adi Godrej, Chairman, Godrej Industries Limited, to formulate policy document on Corporate Governance. In September, 2012 the Committee submitted its document, specifying seventeen guiding principles on corporate governance.

* The Companies bill waiting to become companies act 2013, mandates the novel CORPORATE SOCIAL RESPONSIBILITY principle. This would enhance the corporate governance.




ISSUES IN CORPORATE GOVERNANCE:

* Value based corporate culture

* Holistic view

* Compliance with laws

* Disclosure, transparency, & accountability

* Corporate governance and human resource management

* Innovation

* Necessity of judicial reforms

* Globalization helping Indian companies to become global giants based on good corporate governance

* Lessons from Corporate failure
Inclusion of ethics in corporate governance is the important aspect in the improvement of corporate governance.
ETHICAL CORPORATE GOVERNANCE

1. shortest - definitions is, to quote Lord Moulton, "obedience to the unenforceable".

2. Business ethics(alsocorporate ethics) is a form ofapplied ethicsorprofessional ethicsthat examines ethical principles and moral or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations.
NEED FOR ETHICS IN BUSINESS:

* Ethics help make relationships mutually pleasant and productive- imbibes a sense of community among members- a sense of belongingness to society.

* Ethics are the guiding principles for any endeavour.

* To stop business malpractices

* Improve customers confidence

* Survival of business

* Safeguarding customer rights

* Protecting the interest of employees and shareholders

* Develop good relations

* Healthy competition and consumer satisfaction.


RECENT INITIATIVES TO ENHANCE CORPORATE GOVERNANCE IN INDIA:

1. Green Initiatives in the Corporate Governance :The Ministry of corporate affairs has allowed paperless compliances by the companies and Registrar of Companies under the provisions of the Companies Act, 1956 .

2. Simplification in Procedures and Process under Companies Act, 1956

3. e-Payments in the Ministry:The payment of filing fee by the companies has been made completely online

4. adoption of International Financial Reporting Standards (IFRS)

5. Investor awareness programmes

6. The Companies Bill, 2012

7. Reorganisation of field offices.

8. Easy Exit Scheme, 2011

9. Setting up of Indian Institute of Corporate Affairs (IICA)

10. Limited Liability Partnership Act

11. National Company Law Tribunal (NCLT)

12. New Bills on Multi State Societies and Multi State Partnerships

13. Various orientation programmes for Directors throughCentres of Excellence, seminars and conferences topropagate propagate the need for following following good corporate corporategovernance practices are being organized.

14. Setting up of NFCG in partnership withstakeholders CII, ICAI, ICSI & FICCI.

15. Setting up of Investor Education and Protection Fund.

16. Amendments to the Acts governing three professional institutes(ICAI/ICSI/ICWAI) (ICAI/ICSI/ICWAI) with a view to strengthen strengthen the disciplinary disciplinarymechanism and bring transparency in their working.

17. Empowering SEBI under the SEBI Clause 49 for greater regulation and monitoring of companies

18. Mandatory corporate social responsibility (CSR) under the companies act 2013.


THE ULTIMATE AIM OF CORPORATE GOVERNANCE IS FOR A PROSPEROUS INDIA








BIBLIOGRAPHY
http://www.sebi.gov.in/cms/sebi_data/attachdocs/1357290354602.pdf
http://psrcentre.org/images/extraimages/312018.pdf
Wikipedia
Voluntary Guidelines on Corporate Governance, The Ministry of Corporate Affairs, December 2009


By,
Vinay kumar thammi,