Made By: Ayush Singhal(22) Shobhit Gupta (34) Anurag Jain (48)

The concept of governance is not a new one but nowadays we hear words as corporate governance, organizational governance or good governance frequently. Actually corporate governance or, as defined in ISO FDIS 26000, organizational governance is the system by which an organization makes and implements decisions in pursuit of its objectives. Simply put governance means: the process of decisionmaking and the process by which decisions are implemented (or not implemented). And according to ISO FDIS 26000, it is the most crucial factor in enabling an organization to take responsibility for the impacts of its decisions and activities and to integrate social responsibility throughout the organization and its relationships.

Every organization has its own decision-making processes and structures according to its structure and objectives which may range from formal and sophisticated ones subject to laws and regulations, to informal ones rooted in its organizational culture and values. The world has now realised the importance of harmonised codes of governance and considerable effort has been put into developing such codes Systems of governance.

It is founded on rules which must be codified and can therefore be subject to a standard interpretation by the appropriate adjudicating body. It has a tendency to be hierarchical and therefore imposed from above; and along with this imposition is an assumption of its efficacy and a lack therefore of considerations of alternatives. In this model therefore the issues of governance, politics and power become inseperably intertwined. The abuses which have been revealed within this system of governance have exposed problems with the lack of separation.

The Latin model of governance tends to be less codified than the Anglo Saxon model and finds less need for procedures for adjudication. This is because it is founded in the context of the family and the local community. In some respects therefore it is the opposite of the Anglo Saxon model, being based on a bottom up philosophy rather than a hierarchical top down approach. Thus this model is based on the fact that extended families are associated with all other family members and therefore feel obligated.

The Ottoman Empire existed for 600 years until the early part of the twentieth century. Throughout Europe, at least, the reality is obscured by the various myths which abound and were mostly created during the latter part of the nineteenth century primarily by rival states and for political propaganda purposes. The reality was of course different from the myths and the empire had a distinct model of governance which was sufficiently robust to survive for 600 years, although much modern analysis suggests that the lack of flexibility and willingness to change in the model was one of the principle causes of the failure of the empire.

Transparency:Transparency, as a principle, necessitates that information is freely available and directly accessible to those who will be affected by such decisions and their enforcement. Rule of Law:- It is apparent that good governance requires a fair framework of rules of operation. These rules must be enforced impartially, without regard for power relationships. Thus the rights of minorities must be protected. Additionally there must be appeal to an independent body as a means of conflict resolution, and this right of appeal must be known to all stakeholders.

Participation:- The ability of all to participate if so desired is an essential principle. Participation includes the freedom of association and of expression that goes along with this. Depending upon the size and structure of the organisation, participation can be either direct or through legitimate intermediate institutions or representatives, as in the case of a national government. Responsiveness:Responsiveness implies that the governance regulations enable the institutions and processes of governance to be able to serve all stakeholders within a reasonable timeframe. Equity:- This principle involves ensuring that all members of society feel that they have a stake in it and do not feel excluded from the mainstream.

Efficiency & Effectiveness:- Efficiency of course implies the transaction cost minimisation whereas effectiveness must be interpreted in the context of achievement of the desired purpose. Thus for effectiveness it is necessary that the processes and institutions produce results that meet the needs of the organisation while making the best use of resources at their disposal.
Sustainability:- This of course requires a long-term perspective for sustainable human development and how to achieve the goals of such development. Accountability:- Accountability is concerned with an organisation recognising that its actions affect the external environment, and therefore assuming responsibility for the effects of its actions.

Ethics shows a corporation how to behave properly in all its business and operations. Business ethics is characterised by conflicts of interests. Businesses attempt to maximize profits as a primary goal on one hand while they face issues of social responsibility and social service on the other. Ethics is the set of rules prescribing what is good or evil, or what is right or wrong for people. Ethics is the values that form the basis of human relations, and the quality and essence of being morally good or evil, or right or wrong. Business Ethics means honesty, confidence, respect and fair acting in all circumstances. Ethics can also be defined as overall fundamental principles and practices for improving the level of wellbeing of humanity.

Globalisation can be defined as the free movement of goods, services and capital. This definition does not cover all the aspects of globalisation or global changing. Globalisation also should be a process which integrates world economies, culture, technology and governance. This is because globalisation also involves the transfer of information, skilled employee mobility, the exchange of technology, financial funds flow and geographic arbitrage between developed countries and developing countries.

Globalisation affects the economy, business life, society and environment in different ways:

Increasing competition, Technological development, Knowledge/Information transfer, Portfolio investment (fund transfer between developed countries and emerging markets), Regulation/deregulation, International standards, Market integration, Intellectual capital mobility, Financial crisis-contagion effect-global crisis.

Global governance can be considered as the management of global processes in the absence of any form of global government. There are some international bodies which seek to address these issues and prominent among these are the United Nations and the World Trade Organisation. Each of these has met with mixed success in instituting some form of governance in international relations but is part of a recognition of the problem and an attempt to address worldwide problems that go beyond the capacity of individual states to solve. The term global governance is a descriptive term, recognising the issue and referring to concrete cooperative problem-solving arrangements.

Corporate governance protects firms against some long term loss. When corporations have social responsibilities, they calculate their risk and the cost of failure. Firstly, a company has to have responsibility to shareholders and also all stakeholders which means that it has responsibility to all society. Corporate failures have an important impact on all society also. In particular, big scandals such as Enron have sharply affected the market and the economy. Various stakeholders (e.g. employee, customer, consumer, suppliers etc) as well as shareholders and regulators of the firm have a responsibility to ensure good performance. Therefore, corporate governance is not only related to firms but also related to all society.