1.9 Corporate Governance and Business Ethics

How do the owners of a company support management activities that benefit the employees, suppliers, customers, or surrounding community of the firm and encourage management to act in an ethical manner? Such is the realm of corporate governance, an area that deals with how a company conducts its business and implements controls to ensure proper procedures and ethical behavior.

Although many companies and managers do operate with a fair and honest philosophy, others will try to exploit the temporary benefits of actions that fall outside ethical behavior. Companies do not always adhere to laws. In the news, you may have seen or read stories about false reporting of earnings, failure to reveal financial ...

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