Friday, January 17, 2020

Ethical behavior is legally governed rather volunteered by organizations

Corporate Organizations, in today’s cut- throat competition and globalized economy are forced to focus to improve their bottom line. Corporate governance or ethical practices are limited to a level which is mandatory as per laws. Genuine commitment to ethics is like a needle in haystack. There are various elements to ethical behavior expected from the organizations Accounting transparency: Enron and Worldcom are glaring examples where ethics were compromised to maintain profitable image of the organization.Accounting firm Arthur Anderson’s creative accounting and ulterior motives of management crippled investor’s confidence to the nadir, resulting in bankruptcy/ closure of all three organizations. Leading by example: As per data, US CEOs were paid 42 times the average worker's pay in 1980, to 85 in 1990, and then skyrocketed to 531 times by 2000. Leadership teams of organizations are paid everything to show healthy growth in turnover and profits, for shareholder to be exited at stock markets.No CEO is paid to exemplify ethical leadership at Wall Street. Child labor: Many corporate, primarily in apparel segment, overlook the extreme levels of child exploitation in third world countries. In absence of strict law or policy, child labor is another big area which is not effectively monitored and contained. Summary: Though state (U. S. Securities and Exchange Commission) try to put accounting and auditing system, Corporate Ethics remain an Oxymoron.Ethics, like democracy, is a lot easier in theory than in practice. It would be imperative on regulatory bodies and responsible corporations to take lead in showing value in becoming ethical organization. Moreover, shareholders also should reward organization which exhibit transparency and good quality corporate governance. References: Munzig P G, â€Å"Enron and Economics of Corporate Governance† Stanford University, (June 2003), (http://www-econ. stanford.edu/academics/honors_theses/theses_200 3/Munzig. pdf) Holmstrom, Bengt and Steven N. Kaplan, â€Å"The State of US Corporate Governance: What’s right and What’s wrong? † National Bureau of Economic Research: Working paper 9613, (2003) Jense, Michael and Kevin Murphy, 1990, â€Å"Performance Pay and Top Management Incentives†, Journal of Political Economy, (1990) September/October 1996 edition of At Work [email  protected] com, byBerrett-Koehler Publishers. Jon Entine is a writer and Emmy

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