The determinants of ethical governance are defined as all the factors and resources that impact the way a company is governed in the most ethical manner.
What are Ethics?
Ethics is a branch of philosophy that deals with the concepts of right and wrong. It also deals with moral character and how it relates to behavior, though a distinct line of thought results in moral ethics dealing with the individual moral agent and his/her conduct, while social, political and legal aspects are concerned with the conduct of groups or associations.
The issue in ethical governance is not just about one organization making decisions about what is right or wrong, rather one should be aware that morality is embedded in almost every aspect of human existence.
Definition of Ethical Governance:
Ethical governance is a process whereby organizational members build and maintain the organization’s ethical culture, which includes consistent decision-making in the ethical dimension of management. The result of ethical governance is an organization that has easily understood values and principles, stable means by which decisions are made, clear communication with the organization’s stakeholders and a shared commitment to the organization’s goals.
Role of Ethics & Values in Ethical Governance:
The role of ethics and values in any organization is to inform the behaviours of the employees and to help them build a better understanding of the ethical nature of their job. The principles and values that are used as a basis for decisions must be clear, easily understandable by all employees, and consistent with ethical business practices. Values are an important part of an effective culture because they help determine what is right or wrong in each particular situation. These values should be few in number, but they must have clarity and depth. They should be rooted in significant organisational values. The fundamental forms of these values are purpose, vision, people, place and product/service.
Factors Affecting Ethics in Governance:
There are various factors which affect the ethical governance of an organization. These factors include:
1) Historical factors: Historical factors include the corporate culture and ethics, which are deeply rooted in an organization’s culture. An organisation’s historical background will also have a great impact on how the organisation behaves and governs itself.
2) Society: The values that are regarded as ethical by the society at large will impact on the decisions that are made by top management, as they will always be keen to carry out their ethical responsibilities.
3) The Legal Factors: The legal factors define what is right or wrong in terms of laws and legislation. Any organisation which wishes to operate within a country must first understand all aspects of this legislation and comply with it fully in order to avoid any unnecessary fines or penalties.
4) Socio-Cultural Factors: These include the strength of the culture and norms, and the extent of compliance within an organisation. This is expressed in terms of commitment, loyalty and trust towards the organisation.
5) Economic Factors: These include profit margin, exchange rates, monetary policy, inflation rates and demand for goods and services.
6) Political Factors: These include international politics, the influence of the state and other governments on an organization, political correctness, and ethicality of individuals in government.
Principles to Manage Ethics in Public Service:
Ethics is a complex issue and no one can present one set of rules which are fit to every case. However, the following principles are useful in building an ethical public service:
1) All actions must be based on the fundamental definition of ethics. These include the concepts of right and wrong, good and evil, justice and love.
2) An ethical public service must make sure that the principle of equal opportunity is maintained in all its decisions.
3) The principle of good citizenship needs to be followed by all staff members. This involves treating everybody without discrimination whether they are a friend or foe. It also means that “they get what they deserve”.
4) All employees must be loyal to the organization, its objectives and its people.
5) Employees should abide by the rules and regulations, and those who do not must be dealt with in a proper manner.
6) The goal of an ethical system is to create a good relationship between an employee and his/her superior. This will help maintain trust between them.
7) An ethical system needs to have adequate channels for mutual feedback between an employee and his/her superior without having any hindrance for either of them.
8) When dealing with society, interaction takes place with the public or the government. In such cases, it is always advisable to seek their suggestions or inputs before taking any decision on their behalf.
As can be seen from the above, ethics and governance are of great importance to an organization. They are keys to success and progress, and it is up to the management of an organisation to set clear standards of ethics which they must maintain at all times. Doing so will keep them on track towards a successful future.