GOOD GOVERNANCE AND SOCIAL RESPONSIBILITY
-used interchangeably worldwide by individuals and
corporations to show their associations with the
activities carried out for the betterment of the society.
-to ensure that both work together, there is a wide range
of legal perspectives that have to be studied to
understand in detail the effectiveness of these policies.
-The government has to design Code of Governance for
various enterprises such as voluntary, commercial,
community and social that is developed on six basic
principles.
- inter-linked that aim to give protection to the interests
of the stakeholders so that they can get benefited from
the decision making processes of existing entities
especially corporations.
Social responsibility & its legal perspective
-an ethical or ideological theory in which an entity that
can be an individual or an organization has a
responsibility of acting on behalf of the society.
-Business ethics and social responsibility are closely
related concepts that address how companies should
conduct themselves. Business ethics is a general term
that comprises an overall approach to moral and ethical
decisions and activities.
 a term that is used to explain the contract, either
written or verbal, that a corporation is required to
accomplish in its business environment.
 Every company has to ensure compliance with
specific standards that are set by the customers,
society and investors. (Lockwood, 2010)
 It is an obligation of the firm’s management to
make decisions and implement actions that will
improvise the interest and welfare of the society.
Rules that are set by the government (Thomson, Panwar
& Hansen, 2010)
1) civil rights of the citizens,
2) provide human rights to the employees,
3) offer authentic and genuine products and services to
the customers,
4) make available their financial statements to the
investors for ensuring transparency
5) protecting the environment by carrying out activities
in an environmental-friendly way and
6) making valuable contribution in the country’s
economy
 an organization has to ensure that it does not
exploit the rights of its employees
 The government has to set laws related to industrial
relations, protection of employees, protection of
customers, tax compliance, quality standards
maintenance, competition policy, transparency
principle and others
Pyramid of Corporate Social Responsibility
four types of responsibilities
1. economic responsibility- to be profitable.
2. legal responsibility - to obey the laws set forth by
society.
3. ethical responsibility- to do what is right even when
business is not compelled to do so by law.
4. Philanthropic responsibility
(discretionary responsibility)- best described by the
resources contributed by corporations toward social,
educational, recreational and/or cultural purposes.
Good governance
-the complete set of principles or rules that have to be
developed with the passage of time for meeting new
challenges in various areas such as quality, commerce,
reputation, risk, probity, accountability and finance
(Charity Commission, 2010).
-the process of strategic decision making in which careful
analysis of available options is carried out and ensured
that the decision is implemented appropriately
(Kaufmann, Kray & Mastruzzi, 2010).
‘governance- can be applied to local, national, corporate
and corporate governance or even to the interactions
that take place between various sectors of the society
importance of good governance- deemed important in
all sectors of the country i.e. private, public and
voluntary. All the corporations especially voluntary and
community organizations are driven by the altruistic
values and they are working for the public benefit, they
need to be governed by appropriate code of ethics that
will ensure that they conduct their operations
appropriately and are held accountable as well (Bullivant
et al., 2012).
Principles of Good Governance
-government and other stakeholders have collectively
increase the efforts of improving the lives of citizens.
-good governance is not solely about the government; it
comprises of the political parties, the media, civil society
and the judiciary.
-leaders, citizens and public institutions work together to
bring changes within the community.
Corporate governance
-process and structure used to direct and manage the
business and affairs of the company towards enhancing
business prosperity and corporate accountability with
the ultimate objective of realizing long-term
shareholders value, whilst taking into account the
interest of other stakeholders.
-shareholders, creditors and other stakeholders of a
corporation ensure that management enhances the
value of the corporation , as it competes in an
increasingly global market place.
-system of rules, practices, and processes by which a firm
is directed and controlled
-balancing the interest of a company’s many
stakeholders, such as shareholders, senior management
executives, customers, suppliers, financiers, the
government, and the community. \

Fundamental objectives of corporate governance

1. Improvement of shareholders value Better relations
will lead to an increase in shareholders wealth and
expand their business and in turn become source of
competitive advantage.
2. Conscious Consideration of the interests of other
stakeholders. When a company meets the objective
of increasing the shareholders value it have a greater
internally generated resources improving its
commitment in meeting its environmental, community
and social obligations. It can pay taxes well; reward,
train and retain key staff, and enhance employee
satisfaction.

What Promotes Good Governance

1. Transparency- it maintains investors, consumers
and other stakeholders confidence.
2. Accountability- is the recognition and assumption
of responsibility for the decisions, actions, policies,
administration, governance and implementation of
programs and plans of the corporation and people
involved , including the obligation to report, explain and
be answerable for its resulting consequence.
3. Prudence- care, caution and good judgement as well
as wisdom in looking ahead. the board of directors , who
will be the body responsible in safeguarding the interest
of the organization through good planning and
management of finance and other resources of the
organization

BENEFITS OF Good governance

-To input it into perspective
-Reduced vulnerability
-Marketability
-Credibility