CORPORATE – latin term “corpus” which means body 5.
Reduced Risk of Corporate Crisis and Scandals Accountability
GOVERNANCE – “kubernain” “gubernare“ which means to steer 6. Increased Long-term Value - obligation and responsibility of the company to provide proper
justification for their every step to the stakeholders.
Corporate Governance is concerned with the systems of laws, Corporate Performance
regulations, and practices which will promote enterprise, ensure Transparency
- A corporation, which is a union of many stakeholders, such as
accountability and trigger performance. Source: World Council for
employees, customers, investors, vendors, and so on, must be fair and disclose information like financial data, risk details, and conflicts of
Corporate Governance
transparent to its stakeholders in all its dealings. interest in a timely and accurate manner.
Stakeholder Cooperation and Development Fairness
- Corporations should realize that it is necessary for all the stakeholders - ensure every decision with an independent mindset, ensuring that no
to cooperate in order to facilitate development. Such cooperation and personal interests come between them and their business decision.
support can only be possible by adhering to the best practices of
Responsibility
corporate governance.
- Directors should exercise due care in making decisions, and they should
Contributions to Society
BOARD OF DIRECTORS avoid conflicts of interest
Corporate governance also ensures that corporations consider the
• Highest policy making body in a corporation Risk Management
interests of a wide range of constituencies and also of the communities
• Primary responsibility: best interest of shareholder within which they function. - The Board and Management must determine all kinds of risks and how
to best avoid them.
PRESIDENT (CEO)
• Overseeing the operations of a company • Performing all areas of Enhanced Investor Trust
management CAUSES OF POOR CORPORATE GOVERNANCE
The confidence of both foreign and domestic investors is maintained and
upheld due to the trustworthiness that comes from good measures of 1. Agency problem
corporate governance.
STAKEHOLDERS 2. Shareholder activism
Reduced Risk of Corporate Crisis and Scandals
• Any individual, group, or party that has an interest in an organization 3. Modern Corporation and Private Property 1932
and the outcomes of its actions. - Corporate governance reduces the likelihood of corporate crises and
scandals, which can have severe financial and reputational
• Internal Stakeholders: shareholders, managers, employees, investors consequences.
• External Stakeholders: Customers, suppliers, partners, regulators, Increased Long-term Value
competitors, and the community.
- Corporate governance is aimed at increasing the long-term value of an
SHAREHOLDERS organization for not only its shareholders, but also partners. It
• Also called stockholders represents an amalgamation of all those involved in a process that is
socioeconomic.
• Elect the Board of Directors (BOD)
• Voting right for common shareholders.
The Need for Corporate Governance
1. Corporate Performance
2. Stakeholder Cooperation and Development
3. Contributions to Society
4. Enhanced Investor Trust
BUSINESS ETHICS
- Ethics in business refer to a code of standard by which one can
determine what is wrong and what is right for the business enterprise
Why Study Business Ethics
1. Reports of unethical behavior are on the rise
Shareholder Activism Reasons for shareholders’ activism: 2. Society’s judgment affects business goals
1. Dissatisfaction with the company's status quo 3. Personal ethics is not sufficient to handle business ethics
2. Financial reasons, such as cost-cutting, corporate restructuring, 4. Studying business ethics helps identify ethical issues to key
executive appointment, remuneration, etc. stakeholders 2021 and 2022: Russia's Olympic ban for state.
Drucker suggests three criteria for effective organizations:
1. They must be organized for business performance.
2. Their structure should contain the least number of management
levels.
3. Organizational structure should facilitate training and testing of future
organization leaders.
ORGANIZATIONAL STRUCTURE
M2 • Organization structure is the pattern of relationships among positions
ORGANIZATIONAL THEORY in the organization and among members of the organization.
BUSINESS • The purpose of structure is the division of work among members of
• The study of how organizations function and how they affect and are
affected by the environment in which they operate. the organization, and the coordination of their activities so that they are
• Old English word “bisignes“
directed towards achieving the same goals and objectives of the
• It combines the term busy, meaning “engaging in work,” and the suffix • It assesses "what works where - and why!". organization.
–ness, which turns adjectives into nouns related to quality or state.
ETHICS • defines the standards that bear on right and wrong issues of
Objectives of Organizational Structure
society
1. accountability for areas of work undertaken by groups and individual
members of the organization
2. coordination of different parts of the organization and different areas
of work
3. effective and efficient organizational performance including resource
utilization 4. monitoring the activities of the organization
5. flexibility in order to respond to changing environmental factors
6. the social satisfaction of members of the organization.
4. Privacy
• The Republic Act 10173, officially known as the Data Privacy Act of
2012 (DPA), is Philippine's data privacy law, aiming to protect the
personal information of customers by regulating how businesses can
collect, store, and use their data.
5. Safety and Health
• The Department of Labor and Employment (DOLE) is the primary
government agency responsible for enforcing occupational safety and
Imposition of Legal and Administrative Barriers
health (OSH) standards in the Philippines.
1. Disproportionate Licensing and Regulatory Requirements
• The Department of Health (DOH) plays a role in ensuring the health of
2. Excessive, Complex, and Arbitrary Taxation workers, particularly in relation to workplace health hazards.
3. Inadequate Banking System and Poor Banking Practices
4. Lack of Government's Commitment to Reduce Administrative Barriers.
Regulations Relevant to The Conduct of Business
2. Employment and Labor
The government has set many business regulations in place to protect
• These laws pertain to minimum wages, benefits, safety and health
employees’ rights, protect the environment and hold corporations
compliance, working conditions, equal employment opportunity, and
accountable for the amount power they have in this business-driven
privacy regulations cover the largest are of subjects of all the business
society. Some of these regulations stand out more significantly than the
regulations.
others because of their relevance to every employee consumer and
society in general. • The Department of Labor and Employment (DOLE through the
Regional Tripartite Wages and Productivity Board (RTWPB) set the
1. Advertising
minimum wage for workers in the Philippines, there are also several
• The advertising law in the Philippines is primarily governed by Republic required benefits, including unemployment insurance, workers'
Act 7394, also known as the Consumer Act of the Philippines. compensation insurance and employee security assistance which is
mandatory and applicable generally to all employee.
• This law aims to protect consumers from false, deceptive, and
misleading advertisements. 3. Social Environmental
• The Department of Trade and Industry (DTI) is responsible for • The Department of Environment and Natural Resources (DENR)
enforcing advertising laws in the Philippines. enforces environmental laws passed by the government.
• The Ad Standards Council (ASC) is the advertising industry body in • The Environmental Management Bureau (EMB) and other offices and
charge of reviewing advertising content of materials across all media. bureau exist to help businesses small and large alike achieve passed by
the compliance, and should serve as a resource more than an enforcer
