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Business Law, Ethics, and Governance

Topic 1 Introduction to the Course

COURSE LEARNING OUTCOMES

CLO1 Justify the roles and importance of legal framework provided by the
business laws in Malaysia in leading an organization. (C5, PLO3)
CLO2 Apply knowledge in law of contract, partnership law, agency law,
company law, consumer protection law, employment law, legal
provision of copyright and Cyberlaw to address business issues and
related managerial decisions. (C3, PLO1)
CLO3 Evaluate the principal elements that constitute corporate governance
frameworks across various level of the organisation by proposing the
possible legal outcomes and appropriate solutions arising from legal
disputes in business operations . (C4, PLO9)
CLO4 Integrate ethical principles and practices in all aspects of managerial
decisions. (C6, PLO10)

1.1 Course Outline

You will be learning in depth about the below shown areas :

1. Introduction to the Course

2. Introduction to Business Law, Contract Law and Sale of Goods
3. Commercial Laws
4. Company Law and Partnership Law
5. Employment Law, Consumer Protection Act and Alternative
6. Copyright Law, Law of Trade Marks and Cyberlaw
7. Introduction to Corporate Governance
8. Roles and Duties
9. Corporate governance mechanism
10. Overview of Business Ethics and Responsibility
11. Individual Issues in Ethics
12. Ethical issues in Employees Relationships
13. Market and Business Issues
14. Contemporary Issues in Business Law, Ethics and Governance

1.2 Course Guide

This subject will be assessed based on the below shown assessment methods:

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Business Law, Ethics, and Governance
Assessment Method %

Group Presentations 20

Term Paper 40

Final Examination 40

Total 100

Source: [Link]

This course aims to provide participants with an understanding of the legal environment within

which the Malaysian business operates by giving them an exposure to the various laws that

govern formation and performance of business contracts, operation of negotiable instruments

and organizations like partnership firms and companies. In addition, this course provides

participants with understanding of the developments in governance requirements that have

unfolded as a result of the shift from a controlled to market driven economy. Furthermore,

participants are equipped with the principles and practices of ethical conduct which they can

apply to their decision making.

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1) Lets’ watch the below shown videos about this topic.

Source: [Link]

2) Video on Malaysia Legal System.

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Business Law, Ethics, and Governance

Source: [Link]

3) Video on Business Ethics.

Source: [Link]

4) Video on Corporate Governance.

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Source: [Link]

After having watched these video, please write a short brief based on your understanding of

this video.

1.0 Introduction to Business Law, Ethics and Governance in Business

business law, also called commercial law or mercantile law, the body of rules, whether by

convention, agreement, or national or international legislation, governing the dealings

between persons in commercial matters.

Business law falls into two distinctive areas:

(1) the regulation of commercial entities by the laws of company, partnership, agency, and

bankruptcy and

(2) the regulation of commercial transactions by the laws of contract and related fields.

In civil-law countries, company law consists of statute law; in common-law countries it

consists partly of the ordinary rules of common law and equity and partly statute law. Two

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fundamental legal concepts underlie the whole of company law: the concept of legal

personality and the theory of limited liability. Nearly all statutory rules are intended to

protect either creditors or investors.

Business ethics are a set of moral values and corporate standards of conduct in any

business organisation. Business ethics are demonstrated both as written and unwritten

codes of moral standards that are critical to the current activities and future aspirations of

a business organisation.

In simpler terms, business ethics basically represent the organisation’s codes of corporate

governance. It requires the morality standards and behavioural patterns expected of the

individuals and business as a whole. Business ethics is more than just a concept used to

enhance the image of a corporation; ethics are the very foundation of success which

should be applied from the very beginning a firm starts its operation……

The subject of ethics is often considered abstract (existing in thought or as an idea but not

having a physical or concrete existence) by those who believe that rules do not always

apply to them. Fact is rules and laws apply to everyone, as do standards of right and wrong

behaviour. Each individual’s actions within the company affects both the individual and the

entire organisation. When an employee acts ethically and responsibly, it helps the entire

organisation to maintain a healthy reputation. It is most unfortunate when some employees

in the upper levels of the corporate ladder decide to act unethically, but it is a fact of

business and of life. For this reason, it is crucial for a business to be vigilant and rigorous

in promoting an employee to a higher position in order to uphold positive and practicing

good values in doing business.

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Business Law, Ethics, and Governance
(Source: [Link]

The Malaysian Business Code of Ethics (Rukun Niaga)

In line with the importance of practicing good ethics in business, the Ministry of Domestic

Trade and Consumer Affairs had released a bookentitled “Code of Ethics for Malaysian

Business.” The goal of publishing this book to the public is to encourage ethical business

practices in Malaysia.

The legislation of this Malaysian Business Code of Ethics is based on the teachings of

religions, philosophy and tradition of the plural society in Malaysia. It is an initiative by the

National Consumer’s Protection Consultative Council and Ministry of Domestic Trade and

Consumer Affairs to develop self-regulation among traders in Malaysia.

The Malaysian Business Code of Ethics was formulated with the objectives of:

· Preparing the main principles to be applied by all traders for the benefit of consumers

as well as traders;

· Assisting traders in practising a high standard of business ethics among themselves

to safeguard the interests of all parties in order to boost the national economic growth; and

· Representing the universal values gleaned from the doctrines and beliefs of the

various religions, philosophies and cultures found within Malaysia.

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To achieve this means, six (6) principles of The Malaysian Business Code of Ethics (Rukun

Niaga) have been established as follows:

1. Honesty in Business Dealing

The tendency of a businessperson towards honesty including the intent and declaration of

the business transaction as well as in his thoughts, action and speech.

For instance: The businessperson should not try to cover-up the defect found on the

product for the sake of making a profit. Similarly he should not purposely manipulate the

supply of an item with undue profit as the motive.

2. Responsible Towards Customers, Society and Environment

Responsible towards the customers, society and the environment for every action and

decision made.

For instance: Offering products at fair prices and ensuring that services offered are equal

with the quality of services provided. It is important that goods or services befittingly

sold/offered must not be socially or environmentally detrimental.

3. Geniality Towards Fellow Humans

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Compassionate and respectful towards other humans, courteous and generous with

mutual cooperation. Actions and decisions taken must take into account the interest of all

parties and not solely on the interest of the trader.

For instance: In instances when a customer had made an error purchase, and wishes to

exchange it with other items or wants a refund in cash, the trader must accommodate the

request to fulfil the social responsibility towards the society as a whole.

4. Moderation In Business Dealing

Adopt a humble, reserved, modest, moderate, charitable approach and be frugal in all

areas of life.

For instance: A successful businessperson should be mindful and considerate as well as

provide contribution and be supportive to those in need.

5. Fair Treatment of Customers

There should not be double standards and actions taken must not benefit one party only,

equitable treatment irrespective of race, class or status and is not selective of any one side

more than the other should be practised.

For instance: A businessperson should not practise discrimination amongst customers,

regardless whether the customer is a dignitary or an ordinary person in business practices,

as the value of the money is still the same.

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6. Zeal in Making the Business a Success

Execute something with tenacity, diligence and patience, as well as never giving up,

having the courage to take risks and ready to put the utmost efforts to achieve the goals.

For instance: When entering a business field, the businessperson should not be

intimidated by existing businesses, what is important is how the success of other

businesses could be a motivation for success.

(Source: [Link])

The Rukun Niaga Malaysia should be adopted as a good principle and guidance for all

businesses in Malaysia. By practicing this Rukun Niaga, companies and businesses in

Malaysia are poised to achieve positive impact in cultivating business integrity in line with

the aspirations of Pelan Integriti Nasional (PIN).

For further information on business ethics, please click on the link

[Link]

You can also refer to the below stated webpages:

1. [Link]

2. [Link]

3. [Link]

Corporate Governance

The term Corporate Governance refers to the mechanisms and processes which

determine how a company is controlled and managed. In general, there are multiple

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sources of corporate governance rules, depending on the particular legal entity. Since

most subsidiaries of European holding companies are operating in Malaysia in the legal

form of a Private Limited Company or Sendirian Berhad (hereinafter referred to as

"company"), this article focusses on the applicable sources of corporate governance of

such legal entities.

Source: [Link]

association-corporate-

law#:~:text=The%20main%20body%20of%20corporate,articles%20of%20association%2

0(MAA).

The main body of corporate governance rules for a company in Malaysia is the Companies

Act 2016 (CA 2016). In most jurisdictions, next to the statutory rules, a company would

also pass its constitution, also referred to as memorandum and articles of association

(MAA). Under the old Companies Act 1965, a company had to pass an MAA in the course

of its incorporation to bind the members and the company. The new CA 2016 does not

require a company to pass a constitution or MAA. Section 32 of the CA 2016 states that a

company may adopt a constitution and that if it does, such constitution shall have no effect

to the extent it contravenes or is inconsistent with the CA 2016.

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Self Assessment:

Question 1

List the areas that you will study in this course.

Question 2

What does dynamic business mean?

Question 3

Present about the Importance of Technology and Information Systems Management to

Managers.

Your presentation must be within 15 to 20 minutes.

Question 4

Discuss the fundamentals of Technology and Information Systems Management.

References

Lee, M. P. and Detta, I. J. (2018). Business Law. 3rd Edition. Oxford

Malaysia.

Khalidah Khalid Ali et al. (2018). Business Ethics. Oxford Malaysia.

Larcker, D. & Tayan, B. (2021) . Corporate Governance Matters, 3rd

Edition, Pearson

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