Corporate Governance and Ethical Leadership

These flashcards cover key vocabulary and concepts related to corporate governance, organizational culture, and ethical leadership in the business context.

Corporation

A legal entity created by individuals or groups to conduct business, recognized as separate from its owners.

Governance

The set of rules, controls, policies, and resolutions put in place to direct corporate behavior.

Corporate Governance

The system of rules, practices, and processes by which a company is directed and controlled.

Shareholder

An individual or entity that owns shares in a corporation.

Stakeholder

Individuals or groups affected by a company's policies and actions.

Primary Stakeholders

The main entities directly affected by a company's operations, such as shareholders, employees, and customers.

Secondary Stakeholders

Entities indirectly affected by a company's operations, such as government and society.

Limited Liability

A legal structure where a shareholder's financial liability is limited to their investment in the corporation.

Access to Capital

The ability of a corporation to obtain financial resources for business operations and growth.

Risk Diversification

The practice of spreading investments to reduce risk.

Perpetual Existence

The concept that a corporation continues to exist regardless of changes in ownership.

Separate Legal Entity

A corporation is regarded as a distinct entity separate from its owners.

Transferability of Ownership

The ability to transfer shares of the corporation to others.

Centralized Management

A management structure where key decisions are made at the top level.

Fairness

Equal treatment of all stakeholders in corporate decision-making.

Transparency

Openness and clarity in company operations and decision-making processes.

Risk Management

The identification, assessment, and prioritization of risks followed by coordinated efforts to minimize, monitor, and control the probability of unfortunate events.

Responsibility

The duty of corporate officers to act in the best interest of the company and its stakeholders.

Accountability

The obligation of individuals or organizations to accept responsibility for their actions.

Volkswagen AG

An automaker involved in a major scandal known as 'Dieselgate', related to emissions cheating.

Anglo-American Model

A corporate governance system with one board focused on protecting stakeholders.

Continental Model

A two-board system that balances interests of shareholders and employees.

Board of Directors (BOD)

A group of individuals elected to represent shareholders and oversee the management of a corporation.

Supervisory Board

The board that oversees the management board in a two-board governance structure.

Trade Unions

Organizations that represent workers and advocate for their rights and interests.

Japanese Model

A corporate governance system characterized by strong internal relationships and group decision-making.

Ease of Doing Business (EODB)

Refers to the simplicity, efficiency, and transparency with which businesses can operate in a regulatory environment.

RA 11032

A law that aims to improve the ease of doing business for all government offices.

Starting a Business

The process of creating a new enterprise.

Dealing with Construction Permits

The procedures required to legally build or modify structures.

Getting Electricity

The process and requirements to provide electrical services to a business.

Registering Property

The legal process of recording property ownership.

Getting Credit

The means by which a business can obtain funds for operations.

Protecting Minority Investors

Policies aimed at safeguarding the interests of investors who own less than a controlling share.

Paying Taxes

The act of fulfilling financial obligations to the government.

Trading Across Borders

The exchange of goods and services globally.

Enforcing Contracts

The process of ensuring compliance with the terms of a legal agreement.

Resolving Insolvency

Handling situations where a company cannot pay its debts.

Organizational Culture

The collection of attitudes, convictions, and practices that shape an organization’s ethical climate.

Ethical Practices

Business conduct based on principles of fairness, justice, and integrity.

Unethical Practices

Actions that violate moral principles, leading to negative consequences.

Patagonia

A company known for its strong ethical culture and commitment to sustainability.

Johnson & Johnson

A company that has faced ethical issues and has a reputation for credibility.

Enron

A corporation that underwent a scandal due to unethical practices leading to its bankruptcy.

Wells Fargo

A bank involved in a scandal that damaged its reputation due to unethical behavior.

Financial Performance

A measure of a company's profitability and financial health.

Brand Reputation

The perception of a company's brand in the marketplace.

Employee Morale and Retention

The level of satisfaction and commitment employees feel toward their employer.

Customer Trust and Loyalty

The confidence and repeat patronage a business earns from its customers.

Code of Conduct

A set of guidelines outlining the ethical standards for a business.

Ethical Leadership

Leadership that prioritizes moral principles and stakeholder welfare.

Ethics in Business

The moral principles guiding conduct and decision-making within organizations.

Utilitarianism

An ethical framework focused on maximizing the overall happiness or utility.

Deontology

An ethical belief that some actions are inherently right or wrong.

Virtue Ethics

An approach emphasizing moral character and the development of virtues.

Stakeholder Theory

A framework advocating for considering the interests of all stakeholders in business decisions.

Professional Integrity

Upholding honesty and ethical principles in professional conduct.

Confidentiality

The ethical obligation to protect sensitive information.

Objectivity

Making unbiased decisions and recommendations.

Professional Competence

The continual development of professional knowledge and skills.

Fair Dealing

Ensuring fairness in all interactions with stakeholders.

Transparency

Providing clear and open information regarding business practices.

Conflict of Interest

A situation where personal interests may improperly influence professional decisions.

Compliance

Adhering to laws, regulations, and ethical standards applicable to the business.

Ethical Leadership Theories

Theories that inform practices and beliefs surrounding ethical leadership.

Strategic Planning

The process of defining an organization's direction and decision-making on allocating resources.

Resource Allocation

The distribution of resources among various projects or business units.

Risk Management

The identification and prioritization of risks followed by coordinated efforts to minimize their impact.

Stakeholder Engagement

The process of involving stakeholders in decision-making and organizational activities.

Managing Conflicts of Interest

Identifying and addressing situations where personal interests conflict with professional duties.

Organizational Sustainability

The capacity of a business to operate in an ethical and responsible manner over the long term.

Applying Ethical Standards

Implementing clear ethical guidelines and regulations within business practices.

Rewarding Ethical Behavior

Recognizing and incentivizing actions that align with ethical standards.