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The Kohlberg Theory of moral development where focuses on how the children develop their morality and the reasons for their moral value. Kohlberg theory suggests to us that moral value will be developed in a series of six stages. This theory also suggests that moral decisions are primarily focused on seeking and maintaining justice.

Here in this article, we have discussed Kohlberg theory of moral development and all 6 stages explained in detail, at last, we have talked about the Criticism of Kohlberg theory and Carol Gilligan’s theory.

► Kohlberg Theory of Moral Development

According to Kohlberg’s theory of moral development, there are three levels of moral development, and all 3 levels are split into two stages.

Kohlberg suggested that people go through these stages in a fixed order and this transition of moral understanding is linked to cognitive development.

The three levels of moral reasoning include,

1. Pre-Conventional
2. Conventional
3. Post-Conventional

◉ Kohlberg’s Six Stages of Moral Development

1. Avoiding Punishment
2. Aiming at reward
3. Good Person attitude
4. Law & Order
5. Justice
6. Ethics

There are 6 stages of moral development given by Lawerence Kohlberg. All these stages are covered under 3 levels that are as follows;

1. Pre Conventional Level Morality

• Stage 1: Obedience Orientation and Avoiding Punishment
• Stage 2: Individualism and Exchange (Aiming at reward)

2. Conventional Level Morality

• Stage 3: Good Boy Image/ Good Person Attitude
• Stage 4: Maintaining the Social & Law Order

3. Post-Conventional Level Morality

• Stage 5. Social Contract and Individual Rights & Justice
• Stage 6. Universal Principles & Ethics

► 6 Stages of Moral Development

Now let’s discuss all these 6 stages in detail.

✔ Level 1: PRE-CONVENTIONAL MORALITY Kohlberg Theory

Preconventional morality is the first level of moral development and starts from birth to lasts until approximately age 9.

At the pre-conventional level of morality, children don’t have a personal code of morality. Instead, their moral decisions are based on the standards set by adults and the consequences of following or breaking their rules.

For Example, if an action leads to punishment then it must be bad, and if it leads to a reward or prize then it must be good.

Authority is beyond the individual and most children make moral decisions based on the physical consequences of actions.

◉ Stage 1: Obedience Orientation and Avoiding Punishment

This is the first stage where Children are good in order to avoid being punished.

• And if a child is punished, then they must have done something wrong.
• It creates morality among children but it is just only to become obedient and to avoid punishments.

◉ Stage 2: Individualism and Exchange (Aiming at Reward)

At this stage, the Child recognizes that there is not just one right view that is handed down by the authorities.

• Here each child develops a sense of individual morality and Different individuals have different viewpoints.

✔ Level 2 – CONVENTIONAL MORALITY Kohlberg Theory

Conventional morality is the second level of Kohlberg theory of moral development and it is characterized by an acceptance of social rules concerning what is right and wrong.

The age of a person falling into this category is 9 to 20 years.

At the conventional level (adolescents and adult people), Start internalizing the moral standards of valued role models.

• Authority is internalized but does not impose by questions.
• The reasoning is based on the beliefs of the group to which the person belongs.

Society pushes the responsibilities of relationships as well as social order is seen as desirable and must. Therefore it influences our view of what is right and wrong.

◉ Stage 3: Good Boy/Good Person Attitude

• The child/individual tries to be good in order to be seen as being a good person by others.
• The sense of morality is to maintain a good person attitude  So they can get noticed as a good approval of others.

◉ Stage 4: Maintaining the Social & Law Order.

• The child/individual becomes aware of the wider rules of society, so judgments concern obeying the rules in order to uphold the law and avoid guilt.

✔ Level 3 – POST CONVENTIONAL MORALITY Kohlberg Theory

Post-conventional morality is the third level of moral development and is characterized by an individual’s understanding of universal ethical principles.

The age of a person falling into this category is 20 years and above.

This morality builds the thinking of the preservation of life at all costs and also the importance of human dignity.

Individual judgment is based on virtues and self-chosen principles. Moral reasoning is known as Individual Ethics which is based on individual rights and justice.

According to Lawrence Kohlberg, this level of moral reasoning is as far as most people get. Only 10-15% are capable of the kind of abstract thinking necessary for stage 5, stage 6 (post-conventional morality).

Because most people take their moral views from people living in their surroundings. Only a few people can think through ethical principles for themselves.

◉ Stage 5: Social Contract, Justice, and Individual Rights.

At this stage, a person becomes aware that while rules, regulations, and laws might exist for the good of the greatest number.

• But sometimes they will work against the interest of particular individuals. This issue is known as an ethical dilemma.
• For example, in the story of Heinz’s dilemma, The protection of his wife’s life is more important than breaking the law against stealing.

◉ Stage 6: Universal Principles of Ethics.

At this stage, people have developed their own set of moral guidelines which may or may follow the law. The principles apply to everyone.

• For example, Human rights, justice, and equality. But according to Kohlberg, a few people reached this stage.
• Because the person will be prepared to act to defend these principles even if it means going against the rest of society. And in the process sometimes they have to pay the consequences of disapproval and or imprisonment.

► Criticism of Kohlberg’s Theory of Moral Development

Carol Gilligan criticized Kohlberg theory of moral development because he only focused on boys. Gilligan believed that men have a more absolute perspective on morality while women act according to the situation and relationship of the people involved before making a decision.

Some other key criticisms of Kohlberg’s theory are as follows;

1. Too much focuses on moral thinking and not enough on moral behavior.
2. Kohlberg suggested morality in women is less fully developed than in men.
3. Completely Underestimated the contribution of relationships and family.
4. Kohlberg’s theory is culturally biased and not universal.
5. Stage theories in general are not adequate to define moral development.

Must Read :Theory X and Theory Y

► Carol Gilligan’s Theory of Moral Development

This is an advancement of Kohlberg’s theory. It had been observed that Kohlberg’s theory of moral development was proposed based on the moral thinking of privileged white men and boys.

Therefore Gilligan’s theory was popularized by taking both male and female thinking capabilities into account.

Carol Gilligan, an American psychologist, and theorist were born on 28 Nov 1936 in New York City. She pursued her doctorate degree in Social Psychology from Harvard University.

Carol Gilligan started as a research assistant for Lawrence Kohlberg. But after some time she eventually became independent and criticized some of his theories.

Carol Gilligan propounds that Kohlberg’s theories are biased toward the male thinking process. According to Gilligan, Kohlberg has only taken privileged men and boys in his study.

According to Gilligan, women face a lot of psychological challenges and they are not moral widgets. She said the women’s point of view on moral development consists of caring which shows its effect on human relationships.

Therefore, Gilligan proposed a theory that has the same 3 stages as Kohlberg but with different stages of moral development.

Though the names of the level of the stage are the same, the stages differ in this method. Gilligan’s theory suggests that moral development is based on pro-social behaviors such as Altruism, caring, and helping and the traits such as honesty, fairness, and respect.

✔ Pre-conventional Level (Theory of Moral Development)

• At this stage, a person cares for oneself to ensure survival.
• A person’s attitude is selfish at the beginning level but this is the transition phase, where the person finds the connection between oneself and others.

✔ Conventional Level of Moral Development

• In this stage, the person feels a sense of responsibility and starts showing care towards other people.
• Carol Gilligan suggests that this moral thinking can be identified in the role of a mother and a wife. This tendency sometimes leads to ignorance of oneself.

✔ Post-conventional Level of Moral Development

• In this stage, the principle of care for self as well as others is accepted.
• But a section of people may never reach this level, especially most women.

According to Gilligan’s theory of moral development, changes take place due to the change of self rather than critical thinking. It was stated that the post-conventional level of Kohlberg’s theory is not attained by women.

But Carol Gilligan researched and suggest in her theory that the post-conventional level of thinking is not easy for women to go through because they care for the relationships.

◉ Levels of Thinking

Carol Gilligan states that the post-conventional level of moral thinking can be dealt with based on the two types of thinking.

Gilligan’s theory is based on the two main aspects that are listed below;

1. Care-based morality (usually found in women) and
2. Justice-based morality (usually found in men).

1. Care-based Morality

Care-based morality is the type of thinking generally found in women. Care-centric Morality is based on the following principles;

• More focuses on inter-connected relationships and universality.
• Acting avoidance of violence.
• Women with this morality are usually interested in helping others.
• This morality is commonly found in girls because of their connections to their mothers.
• Girls remain connected to their mothers, they are less inclined to worry about issues of Justice.

2. Justice-based Morality

Justice-based morality is the kind of thinking mostly found in men. Justice based morality is based on the following principles;

• This morality views the world as being composed of autonomous individuals who interact with one another.
• They avoid inequality.
• Individuals with this morality are usually interested in protecting individuality.
• Commonly found among boys because of their need to differentiate between themselves and their mothers.
• Male are separated from their mothers, so boys become more concerned with the concept of inequality.

Must Read :Maslow’s Hierarchy of Needs Theory

Ethics is a branch of Philosophy and it has multi-dimensions. Here we have shared types of ethics and how it is categorized based on situations. It can be applied in many fields like environment, cyberspace, public sphere, international relations, and so on.

To understand the Types of ethics, we need to first understand the branches and dimensions of ethics. So let’s start our discussion!

► Types of Ethics (Dimensions of Ethics)

Ethics is mainly divided into four main branches. They are as follows:

1. Meta
2. Prescriptive
3. Descriptive
4. Applied

◉ Branches of Ethics (In Nutshell)

Here we have explained each of the dimensions of ethics in brief so you can get an overview.

1. Meta-Ethics: (Ethics about Ethics)
2. Prescriptive Ethics: (also known as Normative Ethics) – which is again divided into Deontological Ethics, Teleological Ethics, and Virtue Ethics.
3. Descriptive Ethics: (also known as Comparative Ethics)
4. Applied Ethics: It is again divided into Bioethics, Cyber Ethics, Environmental Ethics, Personal Ethics, Professional Ethics, Public Ethics, International Ethics, and so on.

✔ 1. Meta-Ethics (Types of Ethics)

Meta-ethics can be defined as a branch of ethics that is concerned with the study of the nature of ethics. It analyzes the meaning when we use words like good, bad, right, and wrong.

Meta-Ethics is more about philosophy in nature as it deals with the nature of ethics and morality.

Meta-ethics investigates where our moral and ethical principles come from and what is the meaning behind using them.

• Deals with questions like What is meant by being right? OR what is meant by being wrong?
• Deals with the definition of right and wrong.
• Meta means about the thing itself.
• So Meta-Ethics is Ethics about Ethics.

Meta-Ethics is more concerned with the terms of morality in the language we use. How do we define ‘good’ or ‘bad’?

For Example: “What is meant by a wrong action?” Another example is, when we say, ‘abortion is good’, or ‘abortion is bad’?

✔ 2. Prescriptive Ethics (Normative Ethics)

Prescriptive Ethics, also known as, Normative ethics can be defined as the study of ethical action, typically based on what is morally right and wrong.

Normative ethics is more practical as it applies to basic human behavior and actions. There are mainly three theories that come under normative ethics. Deontological, Teleological (Consequential), Virtue.

• Deals with questions like “is that action right (ethical)? OR was that act wrong?
• Checks if the action/outcome of action fits into the definition of right or wrong.
• Deontological Ethics (Focus on action/duty), Teleological Ethics (Focus on the outcome/end), and Virtue Ethics are the sub-branches.

For Example; is it wrong to kill a person to save many lives?

Prescriptive Ethics involves systematizing, defending, and recommending concepts of right and wrong action (behavior). It also includes arriving at moral standards that guide to act right or wrong. It is an ideal litmus test of identify behavior.

Must Read :What is Business Ethics?

✔ 3. Descriptive Ethics (Comparative Ethics)

Descriptive ethics can be defined as describing and explaining people’s moral attitudes and the moral norms and practices of societies.

It deals with what is believed to be good, right, or virtuous and moral practices societies do have.

Descriptive ethics are also known as comparative ethics and it is empirically based, and aim to discover and describe the moral beliefs of a specific culture.

• Deals with people’s beliefs about morality.
• Deals with what society thinks is good or bad.
• It is an empirical investigation of the moral beliefs of various groups.

For Example; How many of you think that it is wrong to kill a person? Another example is when we say “Everyone has a moral right to a good education”.

It is an approach to describe what people think about morality or when want to describe how people actually behave according to their morals.

✔ 4. Applied Ethics

Applied ethics can be defined as a branch of moral philosophy that attempts to apply ethical principles and moral theories to real-life moral issues.

• The most practical branch of ethics.
• Deals with ethical questions specific to practical fields.
• Includes bioethics, legal ethics, business ethics, medical ethics, etc.

For Example; Is it ethical to allow euthanasia? Other examples are Capital punishment, Animal Rights, and War between two countries.

Applied ethics refers to the discipline of philosophy that attempts to apply ethical theory to real-life situations. For example, abortion is a major issue and it is an applied ethical topic since it consists of a specific type of controversial behavior.

Corporate governance is the coordination and maintenance of a set of relations that promote the interest of stockholders and stakeholders of a business corporation. Here in this article, we have discussed what is corp. governance? and its meaning, definition, feature, benefits, importance, principles, and models of corp. governance.

► What is Corporate Governance?

Corporate Governance is an open-ended system of government ecosystem where there is a separation between ownership and control.

It is a set relationship between a company’s management, board, shareholders, and stakeholders.

CG is a system of a social institution that influences the process of strategic investment incorporation that revolve around three decisions: return, investment, and control.

◉ Corporate Governance Meaning

Corporate Governance is made up of two words “Corporate” and “Governance”.

• The word Corporate is used for relating to a business, especially a large business.
• Governance is the process of formulating decisions and implementing those decisions.

In other words, Corporate Gov. simply means the system by which companies are directed and controlled.

◉ Definition of Corporate Governance

According to Shleifer & Vishny (1997, Journal of Finance),

“Corporate Governance deals with the methods in which suppliers of finance to corporations assure of getting a good return on their investment.”

According to WORLD BANK

Definition 1

• From a public policy perspective, “it is about boosting an enterprise with accountability in the exercising of power and control over the company”
• From the perspective of the company, “Corporate governance is relations between owners, management board and stakeholders”.

Definition 2

• In the eye of the law, a corporation is a legal entity. It is a system or mechanism through which maintaining and promoting the relationship that leads to individual profit without corresponding personal responsibility.

► Feature of Corporate Governance

The features for the C.G. are as follows:

• Transparency
• Protection of Shareholders’ Rights
• More Power to CEO
• Accountability
• Based on Ethics
• Universal Applications
• Systematic

► Need for Corporate Governance

Some of the needs for the C.G. is as follows:

• Changing Ownership Structure
• Importance of Social Responsibility
• Growing Number of Scams
• Good corp. governance also minimizes wastage corruption risk and mismanagement
• Indifference on the part of shareholders
• Globalization
• Mergers and Takeovers
• Brand formation and development

► Parties of Corporate Governance

The following are the parties of corp. governance

• Board of Directors
• Managers
• Workers
• Shareholders or owners
• Regulators
• Customers
• Suppliers
• Community

► Benefits of Corporate Governance

The Benefits/Advantages of Corp. Governance is as follows:

1. Good CG ensures corporate success and economic growth.
2. Strong C.G. create confidence among investors, and it can raise capital for the company efficiently and effectively.
3. It lowers the capital cost.
4. The share price may impact positively.
5. It facilitates owners and managers to achieve objectives that satisfy the shareholders of the company.
6. Good C.G. also reduces wastages, risks, corruption, and mismanagement.
7. It helps in brand formation and development.
8. CG ensures the work culture of management so that it fits the best interests of all.

► Importance of Corporate Governance

• Shapes the growth and future of the capital market & economy.
• Instrument of investor’s protection.
• Protection of the interest of shareholders and all other stakeholders.
• Contributes to the efficiency of the business.
• Creation of wealth.
• Enables the firm to compete internationally in sustained.
• Keeps an eye on the issues of insider training.

► Principles of Corporate Governance

C.G. structure may vary from country to country, but most organizations incorporate the following key elements:

• Principles of accountability
• Principles of fairness
• Principles of equity
• Principles of transparency
• Principles of discipline
• Principles of responsibility
• Principles of social responsibility
• Principles of honesty
• Principles of confidentiality
• Principles of integrity

► Models of Corporate Governance

The following are the model of corporate gov;

• Anglo-American Model
• Japanese Model
• Germany Model
• Indian Model

✔ Anglo-American Model:

The Anglo-American model is used as the basis of corp. governance in the USA, UK, Canada Australia, and some commonwealth countries.

✔ Japanese Model:

The Japanese model is also known as the business network model, usually, shareholders are banks/ financial institutions, large family shareholders, corporate with cross-shareholding.

✔ Germany Model:

German Model is also called the ‘Two-Tier Board Model’ as there are two boards. The supervisory based and the management board. It is used in countries like Germany, Holland, France, etc.

✔ Indian Model:

The Indian model of corporate gov. is a mixture of the anglo-American and german models. This is because, in India, there are types of corporations viz private companies, public companies, and public sectors.

► Theories of Corporate Governance

Since the 1970s and until now, many theories have been proposed by scholars and specialists in the areas of corp. governance. Basically, these theories look at different perspectives of corp. governance and none of them are holistic. Let us know to see the important competitive theories of corp. governance as follows:

1. Agency Theory
2. Stewardship Theory
3. Stakeholders’ Theory
4. Transaction Cost Theory
5. Dependency Theory
6. Political Theory
7. Ethical Theory

Business organizations and their owners are well-acknowledged of the ethical issues and hence they want to enhance the ethical standards of the business. Self-regulation is, of course, better and gives satisfying results. Besides, there are various factors influencing Business Ethics.

Here we have shared some factors influencing business ethics, determinants, and the importance of business ethics.

► What is Business Ethics?

Business ethics is the study of fitting business perspectives and works concerning possibly debatable subjects including corporate governance, insider exchanging, payoff, separation, corporate social obligation, and guardian obligations.

The law regularly guides business morals, however, at different times, business morals give a basic rule that organizations can decide to keep to acquire public endorsement.

Business ethics apply not only to how the business connects with the world at large but also to their one-to-one dealing with a single customer.

► Factors Influencing Business Ethics

1. Personal Code of Ethics
2. Legislation
3. Leadership
4. Government Rules and Regulations
5. Ethical Code of the Company
6. Social Pressures
7. Ethical Climate of the Industry

Now let’s discuss in detail all the above factors influencing Business Ethics.

✔ 1. Personal Code of Ethics (Individual Ethics)

A person’s personal code of ethics which is what one considers moral is the prime responsible factor influencing his behavior.

For Example, Ratan Tata, chairman of Tata Group, is known for his personal code of ethics that leads to the high brand value of tata group and employee satisfaction.

✔ 2. Legislation

It is already stated that the Government will intervene and enact laws only when the businessmen become too unethical and selfish and totally ignore their responsibility to society.

No society can tolerate such misbehavior continuously. It will certainly apply pressure on the Government and the Government consequently has no other substitute to prohibit such inefficient behavior of the businessmen.

✔ 3. Leadership

If the leader leads in ethical ways and motivates the employees, so the employees will perform in legal ways then it will be beneficial for the company and for the employees also.

Leadership plays an important role in business ethics because the leader is a person who can mold the organization.

✔ 4. Government Rules and Regulations

Laws support Government regulations regarding working conditions, product safety, statutory warnings, etc. These provide some strategies to the business managers for figuring out what is acceptable or recognized standards and practices.

✔ 5. Ethical Code & Policy of the Company

When a company grows larger, its standard of ethical conduct also rises. Any unethical behavior or conduct on the part of the company shall endanger its established reputation, public image, and goodwill.

Hence, most companies are very cautious in this respect. They issue-specific strategies to their subordinates regarding the dealings of the company.

✔ 6. Social Pressures

Social forces and pressures have a considerable influence on ethics in business. If a company supplies sub-standard products and gets involved in unethical conduct, the consumers will become indifferent towards the company.

Such refusals shall apply pressure on the company to act honestly and stick strictly to business ethics. Sometimes, society itself may turn against a company.

For example, Family, Friends, Colleagues, Neighbour, and the media.

✔ 7. Ethical Climate of the industry

The modern industry today is working in a more and more competitive atmosphere. Hence only those firms, which strictly adhere to the ethical code, can retain their position unaffected in their line of business.

When other firms, in the same industry, are strictly attached to the ethical standards, the firm should also perform up to the level of others. If the company’s performance is below that of other companies, in the same industry, it cannot survive in the field in long run.

► Internal & External Factors influencing Business Ethics

Business ethics can be influenced by mainly two factors, i.e. Internal And External.

◉ Internal factors influencing business ethics

Internal factors influencing business ethics are as follows;

1. Employees and manager
2. Money and resources
3. Company culture

✔ 1. Employees and Managers:

► Determinants of Business Ethics

Business ethics has been developed as a result of constant interaction among a variety of factors. The following are the main factors that are influencing the ethical behavior of business:

✔ (1) Social Factors.

Ethics are basically social morals. In other words, ethical business conduct is that which is socially moral.

Accordingly, it is the social values, norms, traditions, customs, etc., which prescribe business ethics and govern business conduct.

And as societal norms and values go through changes, business ethics are also modified to the changing social environment.

✔ (2) Economic Factors.

 The level of economic development also affects the nature and spread of business ethics. Generally, business ethics assume a liberal character with the development in economic spheres, particularly business activities.

For example, the advertisement on mint.

✔ (3) Cultural Factors.

The rule of conduct for individuals as well as organizations develops under the continuous influence of cultural values.

And the sources of these cultural values are historical heritage, family system, religion, education, government, etc.

The continuous influence of these factors controls the form and nature of social ethics of behavior.

✔ (4) Political Factors.

Business ethics are also influenced by the ideology and philosophy of the political party in power.

Through appropriate legislative measures, the government enforces business firms in respect of such important aspects as the business location, maintenance of quality, fair prices, fair treatment to the workers, safety measures, Prevention of pollution, etc.

✔ (5) Organizational Factors.

Organizational factors like the philosophy and policy of the firms, attitudes of the managers, and superior-subordinate relations have a great impact on the ethical perception and judgment of business managers and succeeding behavior.

✔ (6) Institutional Codes.

Business conduct is also governed by codes of conduct prescribed by various sectoral institutions.

The codes of ethical behavior have been prescribed by professional bodies like the Institute of Chartered Accountants of India, the Institute of Costs and Works Accountants of India, the Institute of Company Secretaries of India, and the All India Management Association for their respective members.

Organizations act as Chambers of Commerce and Industry and Trade Associations have also formulated codes of conduct for business enterprises. Such rules of conduct act as trend-setters and create a helpful environment for business firms to adopt ethical behavior.

► Importance of Business Ethics

• The good reputation of the organization.
• Improvement in customers’ and investors’ confidence.
• Improves the employee’s teamwork.
• Survival for cut-throat competition.
• Profitability for the organization.
• Businesses become aware of social responsibility.
• Attracts customers to the firm’s products.
• Makes employees stay connected with the organization.
• Attracts investors and keeps the company’s share price high.
• Attracts more employees to work with the organization and leads to a reduction in recruitment costs.

Principles of corporate governance consist of those guidelines which are formulated to make the government more efficient, competitive, and socially acceptable too.

Here we have shared the topic Principles of corporative governance;

► Principles of Corporate Governance

• Principles of accountability
• Principles of fairness
• Principles of equity
• Principles of transparency
• Principles of discipline
• Principles of responsibility
• Principles of social responsibility
• Principles of honesty
• Principles of confidentiality
• Principles of integrity

Must Read :What is Corporate Governance?

✔ Principles of Accountability

The principles of accountability are related to enforcing the data protection principles. These will perform duties with honesty and integrity.

This principle provides a code & of conduct for accountability of the board of Directors of the company to all shareholders in accordance with applicable law.

It facilitates the Board of Directors (BOD) in decision making and monitoring of the activities of the executive bodies.

✔ Principles of Fairness

This principle is related to enjoying the benefits without paying any cost. The company undertakes to protect the rights of shareholders and it ensures equal treatment of shareholders.

The BOD shall give the opportunity to all shareholders so they can obtain effective redress for violations of their rights.

✔ Principles of Equity (Corporate Governance)

It is necessary to have a clear dividend policy. It should be based on some type of market logic and the prevalent competitive condition.

The capital structure should be in such a way that enables certain shareholders to obtain control disproportionate to their equity ownership should be disclosed,

✔ Principles of Transparency

Incorporate governance is that stakeholders should be informed about the company’s activities, and what it plans to do in the future.

It means that the company is not hiding relevant information, and disclosures are fair, accurate, and reliable.

Markets for all companies and for corporate control should be allowed to function in a transparent manner.

✔ Principles of Discipline

Discipline means obedience, respect for authority, follow the rules and regulations of the organization.

Good corporate governance must have discipline while implementing policies, resolutions, and strategies.

✔ Principles of Responsibility

This principle is to ensure humans are self-responsible and take responsibility and do their work at a given time.

It is the responsibility of the board to produce an understanding and balanced assessment of the company’s prospects and position.

The company recognizes the rights of all interested parties permitted by applicable law and seeks to cooperate with such persons or companies for their own development and financial stability.

✔ Principles of Social Responsibility

Social safety and environmental sustainability or promotion should be ensured by the governance system

To make corporate governance effective, companies must take care of their social responsibility because consumer lives in a society, and society is demanding sustainable development.

For Example, the Corporate sector must take action to reduce pollution and carbon emissions. Provision for recycling the industrial waste.

✔ Principles of Honesty

In corporate governance honesty means you speak the truth and work truthfully without any unfair practice.

Professional communication with both internal and external audiences, including public financial reports, should be accurate, fair, transparent, and trustworthy.

✔ Principles of Confidentiality

The principle of confidentiality is maintaining confidentiality with all personnel, based on loyalty and trust.

✔ Principles of Integrity (Corporate Governance)

A person of integrity will put the interests of the organization above your own, and even put your own reputation.

To maintain the integrity of the company’s accounting and financial reporting systems. Corporations must include the independent audit periodically.

This type of appropriate system helps to ensure controlling and monitoring risk, financial control, and compliance with the law.

► OECD Principles of Corporate Governance

The OECD is an organization that provides specific guidance for policymakers, regulatory bodies, and market participants.

The objective of OECD is to improve the legal, institutional, and regulatory functions that improve the corporate governance framework, with a focus on publicly traded companies.

• The OECG stands for Organization for Economic Cooperation and Development.
• The OECG principle was codified in 1999 and further revised in 2004.
• These principles are accepted by all member countries and also by some non-member countries.
• The six fundamental principles were all agreed upon by the member of OECD.

◉ Six fundamental principles are given by OECD

The OECD principles cover 6 key areas of corporate governance that are as follows;

1. Discloser and transparency.
2. There should be a strong basis for effective corporate governance.
3.  Rights of shareholders and key ownership of functions.
4. Responsibilities of the board.
5. Role of the shareholders in corporate governance.
6. Equal treatment of all shareholders.