Corporate Goverance and Code of Ethics Article Example | Topics and Well Written Essays - 750 words - 1

Corporate Goverance and Code of Ethics - Article ExampleThis essay will focus on the role of bodily governing in creation and adoption of the corporate code of ethics. It is factual that the quality of management in an plaque is determined by the effectiveness of its system of corporate governance. Proper corporate governance should aim at bringing on control panel honest and competent employees. Besides, it should be geargond towards instituting a framework that will ensure seemly employees compensation so that they are motivated to give their best to the company. Corporate governance together with codes of ethics plays a crucial role in the achievement of a business because it shapes the way the company is viewed by the stakeholders. This article shall focus on the factors that influence the creation and adoption of the corporate code of ethics by a firm as well as those that determine its effectiveness. Some of these factors include the effects of the board diversity, board s tock ownership and the constituent of the board directors on the creation of the corporate code of ethics. High profile scandals that involve corporate officers have in the recent years led to an increased management on the subject of corporate governance. Research reveals that board of directors plays a significant role in establishing the code of ethics in a firm. Thus, it is necessary for an organization to engage the services of the directors that have the competence of planning and overseeing the corporate code of ethics. Studies show that researchers, government regulators, and practitioners are all in agreement that independent directors are more than suitable than the insiders in championing the interests of the shareholders and other stakeholders because in most cases they possess vast experience and it is also presumed that the may make the board be more independent. In addition, they tend to have a higher degree of awareness on their moral and legal commitment.