Business Ethics &
Corporate Governance
MODULE 4
Rohan Patwardhan,
Advocate
[Link], LLM (V.U. Pune) LLM (K.C.L., U.K.)
Founding & Managing Partner, LexRobe Legal®
Founder, The Juris Chronicles
Business & Society:
• Social Responsibility of Business Towards Different Groups shows the
responsibility of Business owners for the business’s performance.
• This includes ensuring a fair return on capital, consolidating the business’
financial position, and capital appreciation to allow owners to weather any
eventuality.
• Let’s now look at the different responsibilities a business has towards its
associations.
• The business is generally associated with owners, investors, workers, suppliers,
consumers, competitors, the government, and the community.
• So they are called business associations because, by every business activity, these
groups’ profits may be affected directly or indirectly
Responsibility towards Stakeholders, owners:
• Run the business well-organized,
• Proper usage of assets and other resources,
• Expansion and appreciation of assets,
• A consistent and reasonable return on capital invested,
• Assuring the safety of their investment,
• Fixed retrieval of interest, and
• On-time compensation of the principal amount.
Responsibility towards Employees:
• On-time and regular payment of salaries and wages,
• Proper working conditions and well-being facilities,
• Opportunity for better job possibilities,
• Job safety and social security include provident funds, group insurance, pensions,
and retirement privileges.
• Proper living conditions like home, transportation, restaurant, etc.; and
• Timely education and improvement
Responsibility towards customers and consumers:
• Goods and services should be able to meet the needs of customers,
• Goods and services should have a high quality,
• Regularly supplement of goods and services,
• There should be a reasonable and affordable price for goods and services,
• All profits and losses of goods and procedures to use the goods must be informed
to the consumers,
• Proper function of after-sales service, Prioritize the grievances of the consumers
and quick settlement,
• Unlawful means like under weighing the goods, corruption, etc., must be
avoided.
• CSR and Ethics:
• Corporate social responsibility (CSR) is a self-regulating business model that helps a
company be socially accountable to itself, its stakeholders, and the public.
• By practicing corporate social responsibility, also called corporate citizenship, companies
are aware of how they impact aspects of society, including economic, social, and
environmental.
• Engaging in CSR means a company operates in ways that enhance society and the
environment instead of contributing negatively to them.
Corporate social responsibility is a business model by which companies make a concerted effort
to operate in ways that enhance rather than degrade society and the environment.
CSR can help improve society and promote a positive brand image for companies.
CSR includes four categories: environmental impacts, ethical responsibility, philanthropic
endeavors, and financial responsibilities.
Types of CSR:
• Environmental responsibility: Corporate social responsibility is rooted in preserving the
environment. A company can pursue environmental stewardship by reducing pollution and
emissions in manufacturing, recycling materials, replenishing natural resources like trees, or
creating product lines consistent with CSR.
• Ethical responsibility: Corporate social responsibility includes acting fairly and ethically.
Instances of ethical responsibility include fair treatment of all customers regardless of age,
race, culture, or sexual orientation, favorable pay and benefits for employees, vendor use
across demographics, full disclosures, and transparency for investors.
Types of CSR:
• Philanthropic responsibility: CSR requires a company to contribute to society, whether a
company donates profit to charities, enters into transactions only with suppliers or vendors
that align with the company philanthropically, supports employee philanthropic endeavors, or
sponsors fundraising events.
• Financial responsibility: A company might make plans to be more environmentally, ethically,
and philanthropically focused, however, it must back these plans through financial
investments in programs, donations, or product research including research and development
for products that encourage sustainability, creating a diverse workforce, or implementing
DEI, social awareness, or environmental initiatives.
• Suggestive Readings:
1. Opinions of Professional Cases discussed in class.
2. Reading material as prescribed in the Course Outline