Corporate governance: the ethical shortfall within the business practice

M.Comm.Corporate governance has become a heated topic of debate when meetings arise and new legislation is drafted. It is also a means to mould new ways of doing business as more and more businessmen are found to be committing irregularities in their actions. Fraud has become rife with over 30 000-fraud cases reported annually. Where will it end and how to curb this? Within this study, a comparison is drawn between corporate governance and ethics. The interrelationship between the two is noted and compared. The differences are brought forward and similarities discussed. The study tries to define ethics and corporate governance. It then moves on to establish which are the principles of corporate governance. This is followed by an evaluation of ethics and corporate governance. Finally, recommendations are made to make corporate governance more effective. These are hard questions but ones, which need answering. The study concerns itself with the study of corporate governance and ethics. Corporate governance is not merely a theoretical tool but one, which needs to be practiced. The question concerning the fact that ethics is synonymous to corporate governance is questioned and answered. In question are the definitions of ethics and corporate governance. Each is defined but the realisation that there is more than one definition of each, which is widely used, is debated. Each definition brings its own problems but also proves that it is vital to the whole. Definitions are usually one-liners, which instil an author’s point of view. To complement each definition further elaborance is made. Each of these further defining statements are discussed and compared to the definitions. A comparison is sought and the purpose of these elaborances is discussed. The principles of corporate governance are documented and later discussed in detail. Comparisons with ethics are drawn and the principles are later discussed with practical examples to serve as guidelines and examples. The driving principles of corporate governance and the King report are debated and transparency proves to be the driving factor over and above all other principles. Within the study, it becomes apparent that corporate governance is only essential in big business. Small to medium business is left out. Why should this be? Another provocative question reviewed is the question of whether corporate governance is essential or not. Why all this fuss over a theoretical report. However, to discuss corporate governance without ethics is like using only half measures in a teacup. Defining ethics is easy but the real study comes forth when the true essence of what is ethics is debated. Morality is a factor but the inner soul’s consciousness of what is right or wrong is discussed. The laws of human nature serve all. The scales can be tipped either way if the price is perceived high enough. The rights and obligations of ethics are questioned together with the director’s responsibilities in determining the ethical climate in business