Balberan, Jan Maxin R.             ITETHIC                                 April 3, 2008

ETHICS, GOVERNANCE & ACCOUNTABILITY

a Professional Perspective

Dellaportas, Gibson, Alagiah, Hutchinson, Leung, Homrigh

Chapter 2: Understanding ethics and moral judgment

“Justice is often described as fairness”

Fairness alone does not adequately define the conept of justice as there is as much subjectivity in fairness as there is in justice. For instance, what one person may think is fair or just, another may not.

Judging right from wrong is best achieved by applying an ethical derived from normative theories. Utilitarianism, a consequential theory, defines a moral action as one that maximizes net benefit of the majority. Non-consequential theories, namely rights and justice, are concerned with maintaining a duty to respect their fellow human beings by applying rules or moral behavior irrespective of the outcomes. The theory of rights defines a good decision as one that respects the rights of others and the theory of justice centers on the distributive effects of actions or policies. 

Chapter 3: Professional ethics and self-regulation

“Professionals know things that others do not.”

The primary quality that distinguishes a professional from a non-professional is the reliance that clients place n their professional advisers due to their superior knowledge and expertise. If knowledge is considered important to those who do not have it, then the professional has a relative advantage that is useful to others.

Success requires a good reputation with clients and the public generally. This is achieved most people strive to work proficiency, wisdom, and professionalism. Although most people strive to work skillfully, professionalism is more than doing your job well – it denotes a genuine regard for excellence that is focused on serving others.

Chapter 5: Corporate governance

“The best practice recommendations are not prescriptions.”

These are guidelines, designed to produce an efficiency, quality or integrity outcome. It does not require a “one size fits all” approach to corporate governance. Instead, it is a states aspiration of best practice for optimizing corporate performance and accountability in the interests of shareholders and the broader economy.

Fundamental to good corporate governance is a board of directors and management with a mix of skills, experience, independence and the integrity necessary for ethical decision making. The company must be accountable to attract capital investment, and should therefore meet the information needs of the investment community in a manner that upholds and recognizes shareholders’ rights.

The essential components of organizations’ corporate governance are the parties involved in governing the entity, the principles of the governance framework, the culture and values of the organization to support the governance principles and the tools, or mechanisms, used to apply the governance principles.

Shareholders rely on the information provided to the capital market to make decisions about their investments. Accountants, auditors and corporate governance structure in which they operate are the primary providers of information to capital market participants. The board of directors, as overseers of the company, should be entitled to expect that management prepare the financial information in compliance with statutory and ethical obligations and rely on auditor’s competence on their opinion of the truth, fairness and compliance of the reports. The importance of corporate governance is demonstrated by the fact that investors are prepared to pay more for a well-governed entity.