Lecture 5: 12 January 2009

We discussed ethics and Governance, labour issues and human rights issues before proceeding further to ISO-14001, Environmental Management Systems.

We discussed briefly the Satyam scam - how Corporate Governance failed here and how ethical priciples were not followed. Other examples of failure of Corporate Governance principles are Enron, Worldcom etc. While ethics (business) is about the values of the company and individuals, what is right or what is wrong (the main question of ethics) can be debated based on the context. We discussed about tellig a lie; in absolute terms telling a lie is not RIGHT, that is what you have been taught. But when you play Pokker, you are required to lie. Ethics is related to the value system.

As for Corporate Governance, we discussed about the Board, Board Composition - independent directors, Board committees like the Audit Committee, Remuneration Committee, Appointment Committee etc.

Quite a few companies follow a code of conduct for employees, requiring ethical behaviour and following principles of corporate governance. (e.g. see the Tata Code of conduct; Philips General Business Principles in the next blog post).

We also discussed how many of the topics covered under Sustainability or CSR are derived from codes/guidelines agreed internatioally. We discussed Clause 23 and Clause 24 of the UN Declaration on Human Rights, dealing with employment and employment conditions. We also touched up the ILO Declaration on Fundamental Principles and rights at work, UN Convention against Corruption, OECD Guideline for Multinational companies etc.

(Read the additional information given on the above subjects in the next blog post - these were not discussed in the class; but will help you understand some of the subjects touched up on better)

We completed the reading of the Porter & Kramer article on Strategic Philanthropy.