Leading business and academic scholars have a convergent opinion that the contemporary transnational business structures have been radically changed during the latest decade. In particularly , the importance of the corporate governance is being ubiquitously cultivated among scholars and the business practitioners. While in the recent past the business structures, both international and those incorporated domestically, were ruled automatically and no one thought that specific issues should be considered before the managers start functioning. A manager or other executive employee was merely hired and no one took seriously ethical issues he could possibly encounter and the effect those issues could have hypothetically on the development and composition of the business structures.
However, in reality the significance of ethical issues shall never be underestimated due to the fact, that the repercussions which ensue from them are so significant, that the company may completely collapse if the proper actions are not taken by the managerial department to cure them. To illustrate, one of the most widespread issues are sexual harassment claims, which are often submitted to the course of law. Whilst the misdeed is always committed by an individual, the damages are always paid off by the corporation and therefore the regulation of the sexual harassment situations is vitally important for the business climate of the company. International practice clearly states that several companies have been completely devastated financially as a result of the similar claims submitted to the court of law by the former employees.
Another aspect of corporate governance and ethical issues can be found among the most fundamental principles of the agency costs theory. Under the postulates of this theory, the managers are hired workers who are prone to disregard the interests of the shareholders when the conflict of interests arises. In other words, it is undisputed that the violation of the fiduciary duty is nothing else, but an ethical misdeed routinely perpetrated by the managerial departments and other executive officers of the corporation. But this ethical violation often leads to the huge financial penalties applied by the tribunals or by the supervisory boards of the shareholders.
Overall, the fact that the elements of the effective corporate governance and the ethical issues are integrally connected and cannot be considered separately is undisputed. Moreover, with the development of the transnational business structures the importance of the ethical principles and especially ethical transgressions is becoming more and more fundamental for the effective business environment (Fogarty, 2004).
Whilst the importance of the ethical issues is undisputed, the engagement of the specific groups of the business structures are often challenges by the international business scholars as well as by their theoretical colleagues. The aim of this section of the present paper is to outline the major stakeholders groups, i.e. those business and non-business groups who either directly or indirectly take part in the process of ethical issues consideration and disputable situations resolution. The determination whether a specific person or a specific entity is an ethically eligible participant of the business privity is vital due to the fact that prospectively this party will be entitled or vice versa disentitled to submit a claim in the court of law or in the arbitral institution claiming indemnification for a specific violation. Hereby , if this entity is not an ethically involved entity it can be neither claimant nor responded in the specific privity.
Group # 1 the Shareholders
The first group which is directly implicated to this process is the shareholders of a specific company. In accordance with the overwhelming majority of the shareholders agreements and articles of incorporation of the international companies, the shareholders are the entity which determines the subsequent development of the company. In other words, the financial strategy and the tactics that will be prospectively employed by the managerial department of the corporation are defined by the shareholders. All managerial decisions of the company are always confined to the activity of the shareholders and to the mandatory prescriptions issued at the annual general meetings of them.
The main ethical consideration relating to this group is the fact that the shareholders are not professional of finance, economics or management. To be more exact, the professionally hired managers of the company always owe them fiduciary duty, i.e. they are requested to act in the better interest of the shareholders even in the situations when the shareholders are not familiar with the pending business processes of the company. In the event of a conflict of interests between the personal financial interest of the shareholders and the needs of a company strategic development arises, the managers are obliged to give their preference to the issues which are connected with the development of the company. The deviation of this principle is nothing but an ethical violation. Shall this dispute arises the shareholders represented by the counsel can be a plaintiff in the court of law.
Group # 2 The Managers and other Executives of the Company
Another group of those, who are directly implicated to the resolution of the ethically related situations, are the managers of the company. The managers are those, who in accordance with the surveys of the leading international business research agencies are the most frequent violators of the ethical principles and mandatory ethical provisions. Moreover, they are the group against whom the majority of the sexual harassment claims are submitted. Another peculiarity of this group is that the managers and other executives are those, who routinely violate corporate fiduciary duty.
Overall, it can be assumed that the managers are the risk group of those implicated in the ethical disputes resolution process due to the fact that they are frequently sued by the shareholders and by the administrative personnel of the company. However, the managers of the company in their turn do not have sufficient grounds to file claims against the shareholders or the administrative staff of the corporations.
Group # 3 The Administrative staff of the Company and other Employees
Apart from the shareholders and the managerial executives of the company, the employees of the company are integrally implicated in the process of ethical disputes consideration and resolution. As far as the practical implementation of their function is concerned, it shall be outlined that they are the biggest group who submit sexual harassment claims and claims connected with the labor law issues which in their turn can be classified as ethical violations.
This section of the paper outlines the aspects of the corporate governance which are governed mandatorily by the government and the elements which can be governed by the controlling organs of the corporations.
Contemporarily, the government financial monitoring agencies have ultimately realized the importance of the government audit and control of the corporate business activity. To be more exact, the most fundamental elements of the corporate business framework are subjects to mandatory state regulation. In particular, it is stipulated that financial audit of the corporate business activity is compulsory in its nature and the observance of the health and tax regulations by the executives of the company. Moreover, it is legally established that specific dispute resolution procedure is to be followed before the dispute is forwarded to the court of law or other dispute resolution arbitration agency.
Moreover, the appointment of the chief executive officers is closely monitored by the respective state agencies. In particular, it is monitored whether the appointed officials and their professional requirements fully correspond to the mandatory legal requirements for the occupation of a specific office.
Although they are not compulsory for the application, there is a number of optional advisory guidelines which have been elaborated by the number of authoritative non-governmental research agencies. In particular, the companies are advised to enter into sexual harassment agreements with the managers in order to avoid the payment of big damages if the claim is brought against the company. Provided that such agreement is concluded, the payment will be exercised by the person who is bound by such an agreement.
The implementation of the policy in University
As far as the practical fulfillment of the provisions outlined in the reviewed documents is concerned, it shall be stressed that that all mandatory and optional guidelines are meticulously observed at that educational establishment. In particular, the professional involved into the educational process of this university are mandatorily commanded to follow the internal regulations and to observe a customers’ oriented approach. Friendly and favorable attitude towards the prospective and the existing students is cultivated there.
As far as the treatment of the ethical issues is concerned there, it must be stressed that ethically the prescriptions of the both documents are fully realize at the education establishment in question. To be more exact, the specific dispute resolution system do exist there and the state authorities of Australia closely examine and monitor the appointment of the key figures, the principal, the head of legal and auditing departments in particular. With regard to the realization of the optional principles, it can be recapitulated that this entity refers to the international experience and elaborates its own principles which it follows.
Overall, it can be recapitulated that the activity of this establishment fully correspond to the existing and emerging international standards.