BUSINESS ETHICS AND CORPORATE GOVERNANCE – SET 1

PART A (5*8=40)
1. Examine the role of Ethics in Business. Why does it matter in Business?
2. How does the Indian Legal System support Business Ethics? Explain
3. Explain Utilitarianism and Kantianism theories
4. Elaborate the areas in HRM which are more prone to unethical practices.
5. Ethics impacts the culture of the Organization - Discuss
6. Explain how CSR Strategies help in Corporate Brand Building
7. Explain the role of CII in Corporate India
8. Examine SEBI Listing Obligations and disclosure 2015

PART B (3*20=60)
1. Elaborate on the theories that facilitate the understanding of Business Ethics
2. Prepare a code of conduct for a HR Manager of an agency supplying security personnel
to industries. State your assumptions if any.
3. Narrate the provisions of the New Companies Act 2013 relating to changes in Corporate
Governance issues.
4. Evaluate the CSR Practices of FMCG and Manufacturing Companies. Justify your
answers with examples from the Corporate.
5. Criticize the Demand and need for Transparency and Disclosure in Corporate
Governance.

BUSINESS ETHICS AND CORPORATE GOVERNANCE – SET 2

PART A (5*8=40)
1. Explain the Code of Conduct and ethics for Managers.
2. What are the conflicts that arise due to ethics in Managerial Practices? Explain with
examples
3. Examine the elements and types of Utilitarianism
4. Examine the ethical dilemmas that arise in different functional areas of HRM
5. Discuss how India’s CSR Rules ensured strict compliance to Industries
6. Explain the concepts of Whistle Blowing
7. Describe the meaning and need for Corporate Governance
8. Describe the roles and responsibilities of the CSR Committees

PART B (3*20=60)
1. Explain the process of developing code of conduct of executives in an IT Company
2. Do work ethics enhance Productivity? Explain
3. Evaluate the CSR Practices of FMCG and Manufacturing Companies. Justify your
answers with examples/cases/scenarios from the Corporate.
4. Elaborate on the Role of Directors and the Powers of the Board of Committee of
Corporate Governance.
5. Criticize on the Disclosure and Transparency in terms of Companies Act 2013.
BUSINESS ETHICS AND CORPORATE GOVERNANCE – SCHEME 1

PART A (5*8=40)

1. Examine the role of Ethics in Business. Why does it matter in Business?

Control Business Malpractices: Better Relation with Employees Improves Customer

Satisfaction Increase Profitability: Improves Business Goodwill: Better Decision
Making: Protection of Society: 

2. How does the Indian Legal System support Business Ethics? Explain

Through various Laws. Eg: Laws on Equal Opportunity, Reservations, MRTP etc. Marks
can be awarded if the student throws light on various other laws enforced by the country
to curb unfair trade practices,laws governing managerial practices, recruitment etc.

3. Explain Utilitarianism and Kantianism theories

Kantianism and utilitarianism have different ways for determining whether an act we do
is right or wrong. According to Kant, we should look at our maxims, or intentions, of the
particular action. Kantians believe “human life is valuable because humans are the
bearers of rational life” (O’Neill 414). In other words, humans are free rational beings
capable of rational behavior and should not be used purely for the enjoyment or
happiness of another.  On the other hand, Utilitarians believe that we should do actions
that produce the greatest amount of happiness. 

4. Elaborate the areas in HRM which are more prone to unethical practices.
(i) Creating split in union leaders by inducing regionalism, casteism or ego problems
(ii) (ii) Not caring for just demands of the Trade Union and not behaving respectfully
with union leaders.
(iii) (iii) Trying to create rift between different unions if there are more than one
recognised union.
(iv) (iv) Biased attitude in selection, transfers, promotions, and training and
development activities.
(v) (v) Giving different treatment and facilities to different people in the same level
posts.
5. Ethics impacts the culture of the Organization – Discuss
The ethical culture in an organization can be thought of as a slice of the overall organizational
culture. So, if the organizational culture represents “how we do things around here,” the ethical
culture represents “how we do things around here in relation to ethics and ethical behavior in the
organization.” The ethical culture represents the organization’s “ethics personality” 
From an ethical systems perspective, creating and sustaining a strong ethical culture is
fundamental to creating an organization that supports people making good ethical decisions and
behaving ethically every day. There are several forces and factors that lead people to take ethical
shortcuts. But when all relevant organizational systems are pushing people in the same ethical
direction, ethical failure is much less likely.

6. Explain how CSR Strategies help in Corporate Brand Building

Corporate Social Responsibility (CSR) is all about stakeholder accountability, transparency in all
dealings and sustainability. All this creates a 'responsible' halo around the business and helps
companies build trust. It provides a platform of moral uprightness and establishes a company's
reputation in the minds of customers and employees. And this is absolutely crucial for brands as
it helps to attract and engage with customers on a continuous basis.

There are many such companies all over the world whose experiences show that integrating
branding and CSR can build a corporate culture around responsibility leading to business
sustainability.

7. Explain the role of CII in Corporate India

The primary goal of CII is to develop Indian industry and to ensure that government and society
as a whole, understand both the needs of industry and its contribution to the nation's well being.
For this, we work

 To identify and strengthen industry's role in the economic development of the country
 To act as a catalyst in bringing about the growth and development of Indian Industry

 To provide up-to-date information and data to industry and government

 To create awareness and support industry's efforts on quality, environment, energy

management, and consumer protection

 To identify and address the special needs of the small sector to make it more competitive

 To promote cooperation with counterpart organisations

 To work towards the globalisation of Indian industry and integration into the world
economy
This is done by adopting a proactive and partnership approach with the government on various
national and international issues concerning the Indian economy. It closely interacts on policy
issues at both the central and state levels. Extensive dialogue and interaction with members and
all sections of the community to build consensus are held.

8. Explain SEBI Listing Obligations and disclosure 2015

Definitions, Applicability of the regulations, , the rights of stakeholders

PART B (3*20=60)

1. Elaborate on the theories that facilitate the understanding of Business Ethics

The three main business ethics theories are deontological theory, utilitarianism, and
norm theory.
Deontological theory states that ethical behavior should follow an established set of rules
or principles in all types of situations. Even though the actual outcome of following
established moral principles may differ, the result does not determine whether the action
is ethical. For example, according to deontological theory, it would always be unethical
to lie even if lying would prevent an unfavorable consequence, such as death.
Utilitarianism is the idea that business conduct should take into account the consequence
that would benefit the largest amount of people. As far as business ethics theories are
concerned, it is one that is probably open to a great amount of interpretive differences.
For example, in international commerce, the consequences of the decision to impose
tariffs might be more beneficial to the group of people on one particular side of the
transaction. In addition, it could be argued that the decision's consequences might benefit
the largest amount of people in the short-term, but harm a greater amount in the long run.
Norm theory states that certain standards of moral conduct should be followed by the
entire group. The acceptable forms of conduct are typically defined for a variety of
probable situations. A prime example of norm theory in the business world is the idea of
employee handbooks or corporate codes of conduct. These usually provide a framework
for how employees should respond and behave in given circumstances, with deviation
from the code resulting in disciplinary action.
2. Prepare a code of conduct for a HR Manager of an agency supplying security personnel
to industries. State your assumptions if any.

Gather Information, Create the draft, Review the draft, Formally adopt the code,
Introduce the code. Enforce the code
  High Standards of Professional and Personal Conduct
 Continuation of Personal Growth in the Field of Human Resources
 Uphold all Laws and Regulations Relating to Employer's Activities
 Maintain the Confidentiality of Privileged Information
 Refrain from Using Personal Position for Inappropriate Gain

3. Narrate the provisions of the New Companies Act 2013 relating to changes in Corporate
Governance issues.
 CA 2013 introduces significant changes to the composition of the boards of directors.
 Every company is required to appoint 1 (one) resident director on its board.
 Nominee directors shall no longer be treated as independent directors.
 Listed companies and specified classes of public companies are required to appoint
independent directors and women directors on their boards.
 CA 2013 for the first time codifies the duties of directors.
 SEBI amends the Listing Agreement (with prospective effect from October 01, 2014) to
align it with CA 2013.

4. Evaluate the CSR Practices of FMCG and Manufacturing Companies. Justify your
answers with examples from the Corporate.

Marks can be awarded if the student throws light on the different CSR practices and
examples not restricted to the below:

Hindustan Unilever

HUL is committed to operate and grow its business in a socially responsible way. Their vision is
to grow its business whilst reducing the environmental impact of their operations and increasing
the positive social impact. The company has spent more than 500 crores on its CSR activities in
the last 5 years and has always spent more than the amount mandated by the CSR law.

Hindustan Unilever Limited uses its CSR funds to work on issues that plague India’s
development. It has achieved huge successes in the areas of water conservation as well as
tackling health and hygiene issues at the grassroots level.

The company implements its CSR initiatives through Hindustan Unilever Foundation (HUF).
The non-profit acts as a vehicle to anchor water management related community development
and sustainability initiatives of Hindustan Unilever Limited. HUF operates the ‘Water for Public
Good’ programme, with specific focus to empower local community institutions to govern water
resources and enhance farm-based livelihoods through the adoption of judicious water
management practices. Since 2010, HUF has supported grassroots interventions in 53 districts
with 23 NGO partners across over 4,300 villages in India.
ITC

ITC has been focusing its CSR energies on rural development in India. The company spent Rs.
326.49 crores on CSR initiatives in 2019-20, surpassing its spending for previous years. The
conglomerate has active social projects in education, environmental conservation, sustainable
agriculture, healthcare, digital literacy, sports and culture.

ITC Choupal is a long-running flagship CSR programme by the company that has become the
gold standard on community development in international circles. Not only has ITC Choupal
impacted lakhs of farmers over the years through digital literacy and economic empowerment,
but it has also been replicated by scores of other corporates for social welfare in their own
communities.

In line with its commitment to put Nation First and responding to the needs arising out of the
lockdown implemented to contain the first wave of COVID-19 pandemic, ITC has spearheaded a
CSR initiative to enable the creation of an eco-system that would lead to significant livelihood
generation for farmers and daily wage earners under the ambit of the Government’s MGNREG
Scheme.

During the second wave, the company worked to mitigate the crisis by supplying oxygen
cryogenic containers to oxygen concentrators and generators. To serve the national priority of
easing the bottleneck of transporting medical oxygen, ITC tied up with Linde India to airfreight
24 cryogenic ISO containers of 20 tonnes each from Asian countries in order to transport
medical oxygen across India. The CSR initiative comes in the wake of an acute shortage of
medical oxygen, constraining the healthcare system’s ability to treat coronavirus patients.

In addition, ITC is airlifted a large number of oxygen concentrators for distribution. The group’s
paperboards unit in Bhadrachalam has commenced a supply of oxygen to neighbouring areas.

For some companies, CSR means manufacturing their products in a way that doesn't harm
the environment and protects the consumer from potentially hazardous materials. One such
company that has staked it reputation on ethical manufacturing is LUSH Cosmetics. What is
CSR activities with examples?

Tata Chemicals is one of the leading Sustainability Champions over the past few years. The
company has launched multiple initiatives and projects to conserve the environment and engages
with local communities toward building an ecosystem that is sustainable and eco-friendly. The
Company spent Rs. 21 crores on its CSR programs in FY21.
The company aided 6,878 farmers with capacity building, field demonstration and livestock
management through digital and physical interactions in the last financial year. Additionally, it
also provided support to rural women artisans of Okhai and transformed the region into a
marketplace connecting 25,190 artisans across India to customers. Under its greening
programme the company has planted 1.15 lakh mangroves across various sites along with
conservation of local plant biodiversity at Mithapur.

Overall, through its CSR initiatives the company was able to impact the lives of 2 lakh people in
the last financial year.

5. Criticize the Demand and need for Transparency and Disclosure in Corporate
Governance.
The purpose of corporate governance is to achieve a responsible, value oriented
management and control of companies. Corporate governance rules promote and
reinforce the confidence of current and future shareholders, lenders, employees, business
partners and the general public in national and international markets. Corporate
governance has evolved and grown significantly in the last decade. Numerous countries
have issued corporate governance codes, and the recommendations of these codes, that
typify "good" corporate governance, undoubtedly contribute towards increased
transparency and disclosure. By striving for better governance, firms are able to reduce
their cost of capital, mitigate risk, enhance investors’ confidence and enhance corporate
valuation.
BUSINESS ETHICS AND CORPORATE GOVERNANCE – SET 2

PART A (5*8=40)
9. Explain the Code of Conduct and ethics for Managers.

Honesty

Managers in every industry must understand their company’s policies and guidelines, as well as its mission,
and how they are expected to go about accomplishing their goals. They also need to know and follow the
laws of the government, particularly as they pertain to business.

Accountability

Good managers expect their workers to take responsibility for their actions and overall performance, and
demand the same of themselves.

Integrity

Managers who perform their jobs with a high level of integrity are widely the best type of supervisors to work
for. That’s because managers who possess integrity are often consistent in their decision-making and
resolution of issues.

Respect

Appropriate behavior is a key factor in a code of conduct for a manager, who must demonstrate acceptable
behavior in the workplace

Flexibility

While most companies don’t expect their managers to display sympathy to employees who aren’t meeting
expectations, most businesses prefer leaders who are patient and work with those in need of assistance.
 10. What are the conflicts that arise due to ethics in Managerial Practices? Explain with
examples

Unethical Leadership
This may come in an obvious form, like manipulating numbers in a report or spending company
money on inappropriate activities; however, it can also occur more subtly, in the form of
bullying, accepting inappropriate gifts from suppliers, or asking you to skip a standard
procedure just once. With studies indicating that managers are responsible for 60% of
workplace misconduct, the abuse of leadership authority is an unfortunate reality.
Toxic Workplace Culture

Organizations helmed by unethical leadership are more often than not plagued by a toxic
workplace culture. Leaders who think nothing of taking bribes, manipulating sales figures and
data or pressuring employees or business associates for “favors” (whether they be personal or
financial), will think nothing of disrespecting and bullying their employees.

Discrimination and Harassment 

Laws require organizations to be equal employment opportunity employers. Organizations must
recruit a diverse workforce, enforce policies and training that support an equal opportunity
program, and foster an environment that is respectful of all types of people. Unfortunately, there
are still many whose practices break with EEOC guidelines.  
Unrealistic and Conflicting Goals

Your organization sets a goal—it could be a monthly sales figure or product production number
—that seems unrealistic, even unattainable. While not unethical in and of itself (after all, having
driven leadership with aggressive company goals is crucial to innovation and growth), it’s how
employees, and even some leaders, go about reaching the goal that could raise an ethical red flag

Questionable Use of Company Technology

While this may feel like a minor blip in the grand scheme of workplace ethics, the improper use
of the internet and company technology is a huge cost for organizations in lost time, worker
productivity and company dollars. One survey found that 64% of employees visit non-work
related websites during the workday.

11. Examine the elements and types of Utilitarianism

All ethical theories belonging to the utilitarian family share four defining elements: (i)
consequentialism, (ii) welfarism, (iii) impartiality, and (iv) aggregationism.
 
Consequentialism is the view that one morally ought to promote just good
outcomes.

Welfarism is the view that only the welfare (also called well-being) of individuals
determines the value of an outcome.

Impartiality is the view that the identity of individuals is irrelevant to the value of
an outcome. Utilitarians hold, more specifically, that equal weight must be given to
the interests of all individuals.

Aggregationism is the view that the value of the world is the sum of the values of
its parts, where these parts are local phenomena such as experiences, lives, or
societies. 5

Hedonism is the view that well-being consists in, and only in, the balance of
positive over negative conscious experiences.

12. Examine the ethical dilemmas that arise in different functional areas of HRM

Recruitment

1. Posting a job ad for a position that does not exist. ...

2. Misrepresenting the duties or requirements of an open position. ...
3. Unethical employee referral practices. ...
4. Unethical use of social media.

Other Areas

1. Unethical Leadership.
2. Toxic Workplace Culture.
3. Discrimination and Harassment.
4. Unrealistic and Conflicting Goals.
5. Questionable Use of Company Technology.

13. Discuss how India’s CSR Rules ensured strict compliance to Industries
The CSR rules in India came with many guiding principles and requirements around constitution
and functions of CSR committees, responsibilities of the board of directors and around utilisation
of the CSR funds and certification by CFOs. To counter this challenge and demonstrate
leadership at a global platform, on April 1, 2014, India became the first country to mandate rules
around CSR. These rules were incorporated in the Companies Act to ensure strict compliance
and cover a large population. While the provisions were mandatory, the applicability of the
various sub sections was spread over few years providing the companies adequate time to absorb
and implement the new rules.

14. Explain the concepts of Whistle Blowing

The classic definition of whistleblowing specifies that it is about 'illegal, immoral or

illegitimate practices'. Many issues that could affect care quality and patient safety, and about
which we would hope staff would raise any concerns, do not necessarily come under any of
those headings.

Marks can be awarded if the student throws lights on concepts, characteristics and types of
whistle blows

15. Describe the meaning and need for Corporate Governance

Corporate governance is important because it creates a system of rules and practices that
determine how a company operates and how it aligns the interest of all its stakeholders.
Good corporate governance leads to ethical business practices, which leads to financial viability.
Corporate Governance deals with the manner the providers of finance guarantee themselves of
getting a fair return on their investment. Corporate Governance clearly distinguishes between the
owners and the managers. The managers are the deciding authority. In modern corporations, the
functions/ tasks of owners and managers should be clearly defined, rather, harmonizing.

Corporate Governance deals with determining ways to take effective strategic decisions. It gives
ultimate authority and complete responsibility to the Board of Directors. In today’s market-
oriented economy, the need for corporate governance arises. Also, efficiency as well as
globalization are significant factors urging corporate governance. Corporate Governance is
essential to develop added value to the stakeholders.

16. Describe the roles and responsibilities of the CSR Committees

 The CSR Committee shall formulate and recommend a CSR policy to the Board.
CSR policy shall point out the activities to be undertaken by the company as
enumerated in Schedule VII.
  CSR Committee shall recommend the amount of expenditure to be incurred on the
CSR activities to be undertaken by the company.
 CSR Committee shall monitor the CSR policy of the Company from time to time.
 The committee shall establish the transparent controlling mechanism for the
implementation of the CSR projects or programs or activities undertaken by the
company.

PART B (3*20=60)

6. Explain the process of developing code of conduct of executives in an IT Company

Gather Information, Create the draft, Review the draft, Formally adopt the code, Introduce the
code. Enforce the code

 Company core values and vision

 Bans on illegal activities: activities including smoking, drinking, foul language
 Internet usage: Cyber security; corporate email; social media
 Discrimination and harrassment
 Confidentiality procedures
 Dress code
 Community involvement
 Gift and entertainment policies
 Meal and rest break policies
 Relationships in the workplace
 Violation of the code of conduct
 Compliance program

7. Do work ethics enhance Productivity? Explain

An ethical culture driven by core values of integrity, respect, accountability, fairness and
compassion not only empowers a company to attract and retain quality employees, it can also be
a potent driver of productivity. Good ethics increases credibility, employee engagement and
commitment.

Productivity also helps to motivate the workplace culture and boost moral, producing an
even better company environment. More often than not, when a firm is highly productive, it
eventually becomes successful, and because of this, incentives are bound to be made available to
the employees.
Organizations with happy, stress-less, and creative work settings improve mental wellbeing
and productivity. Therefore, foster a good workplace culture to promote good work ethics. A
professional employee is trustworthy, hard-working, and disciplined.

Marks can be awarded if students throws light on Strategies on improving work ethics and
productivity also.

8. Evaluate the CSR Practices of FMCG and Manufacturing Companies. Justify your
answers with examples/cases/scenarios from the Corporate.
Marks can be awarded if the student throws light on the different CSR practices and
examples not restricted to the below:

Hindustan Unilever

The company has spent more than 500 crores on its CSR activities in the last 5 years and has
always spent more than the amount mandated by the CSR law.

Hindustan Unilever Limited uses its CSR funds to work on issues that plague India’s
development. It has achieved huge successes in the areas of water conservation as well as
tackling health and hygiene issues at the grassroots level.

The company implements its CSR initiatives through Hindustan Unilever Foundation (HUF).
The non-profit acts as a vehicle to anchor water management related community development
and sustainability initiatives of Hindustan Unilever Limited. HUF operates the ‘Water for Public
Good’ programme, with specific focus to empower local community institutions to govern water
resources and enhance farm-based livelihoods through the adoption of judicious water
management practices. Since 2010, HUF has supported grassroots interventions in 53 districts
with 23 NGO partners across over 4,300 villages in India.

ITC

ITC has been focusing its CSR energies on rural development in India. The company spent Rs.
326.49 crores on CSR initiatives in 2019-20, surpassing its spending for previous years. The
conglomerate has active social projects in education, environmental conservation, sustainable
agriculture, healthcare, digital literacy, sports and culture.

ITC Choupal is a long-running flagship CSR programme by the company that has become the
gold standard on community development in international circles. Not only has ITC Choupal
impacted lakhs of farmers over the years through digital literacy and economic empowerment,
but it has also been replicated by scores of other corporates for social welfare in their own
communities.

In line with its commitment to put Nation First and responding to the needs arising out of the
lockdown implemented to contain the first wave of COVID-19 pandemic, ITC has spearheaded a
CSR initiative to enable the creation of an eco-system that would lead to significant livelihood
generation for farmers and daily wage earners under the ambit of the Government’s MGNREG
Scheme.

During the second wave, the company worked to mitigate the crisis by supplying oxygen
cryogenic containers to oxygen concentrators and generators. To serve the national priority of
easing the bottleneck of transporting medical oxygen, ITC tied up with Linde India to airfreight
24 cryogenic ISO containers of 20 tonnes each from Asian countries in order to transport
medical oxygen across India. The CSR initiative comes in the wake of an acute shortage of
medical oxygen, constraining the healthcare system’s ability to treat coronavirus patients.

In addition, ITC is airlifted a large number of oxygen concentrators for distribution. The group’s
paperboards unit in Bhadrachalam has commenced a supply of oxygen to neighbouring areas.

For some companies, CSR means manufacturing their products in a way that doesn't harm
the environment and protects the consumer from potentially hazardous materials. One such
company that has staked it reputation on ethical manufacturing is LUSH Cosmetics. What is
CSR activities with examples?

Tata Chemicals is one of the leading Sustainability Champions over the past few years. The
company has launched multiple initiatives and projects to conserve the environment and engages
with local communities toward building an ecosystem that is sustainable and eco-friendly. The
Company spent Rs. 21 crores on its CSR programs in FY21.

The company aided 6,878 farmers with capacity building, field demonstration and livestock
management through digital and physical interactions in the last financial year. Additionally, it
also provided support to rural women artisans of Okhai and transformed the region into a
marketplace connecting 25,190 artisans across India to customers. Under its greening
programme the company has planted 1.15 lakh mangroves across various sites along with
conservation of local plant biodiversity at Mithapur.

Overall, through its CSR initiatives the company was able to impact the lives of 2 lakh people in
the last financial year.
 9. Elaborate on the Role of Directors and the Powers of the Board of Committee of
Corporate Governance.
Corporate boards have many duties and responsibilities. In every decision the board makes, they
must consider how it will affect their employees, customers, suppliers, communities and
shareholders.

Good corporate governance relies on distinct differences in the roles between board directors and
managers. It was never intended for board directors to be directly involved in the daily
operations of a corporation, and they certainly shouldn't engage in micromanaging the
management. The main role of board directors is oversight and planning. Despite the differences,
board directors may delegate certain powers to the CEO or CFO under certain circumstances.

Boards also regularly delegate some of their duties to board committees. Corporate board
committees act as a subset of the full board. Committees devote the necessary time and resources
to issues for which the full board doesn't have time. Committees delve deep into issues, often
calling in experts to assist them. Committees provide regular reports to the board on the matters
they're charged with handling.

10. Explain the Disclosure and Transparency in terms of Companies Act 2013.

The corporate governance framework should ensure that timely and accurate disclosure is
made on all material matters regarding the corporation, including the financial situation,
performance, ownership, and governance of the company. 

Transparency is a critical component of corporate governance because it ensures that all of a

company's actions can be checked at any given time by an outside observer. This makes its
processes and transactions verifiable, so if a question does come up about a step, the company
can provide a clear answer.

(i) the extract of annual return; (ii) number of Board Meetings; (iii) Directors Responsibility
Statement; (iv) Details of frauds reported by the Auditor in his Report u/s 143(12), other than
frauds reportable to the Central Government; (v) If the company has independent Directors, a
statement on declaration.