lOMoAR cPSD| 22081288 GOOD GOVERNANCE AND SOCIAL RESPONSIBILITY LESSON 1: OVERVIEW OF GOOD GOVERNANCE AND SOCIAL RESPONSIBILITY What is Good Governance? In international development, good governance is a way of measuring how public institutions or public offices conduct public affairs and manage public resources in a preferred way. Governance is the process of decision-making and the process by which decisions are implemented or not implemented. Governance in this context can apply to corporate, international, national or local governance as well as the interactions between other sectors of society. Varying Concepts of Governance 1. The way power is exercised through a country’s economic, political, and social institutions. 2. The sound exercise of political, economic, and administrative authority to manage a country’s resources for development. It involves the institutionalization of a system through which citizens, institutions, organizations, and groups in a society articulate their interests, exercise their rights, and mediate their differences in pursuit of the collective good. 3. The exercise of economic, political, and administrative authority to manage a country’s affairs at all levels. It comprises mechanisms, processes, and institutions through which citizens and groups articulate their interests, exercise their legal rights, meet their obligations, and mediate their differences. 4. Refers to how any organization, including a nation, is run. It includes all the processes, systems, and controls that are used to safeguard and grow assets. 5. The systems, processes and procedures put in place to steer the direction, management and accountability of an organization. 6. The manner in which power is exercised in the management of a country’s social and economic resources for development. It is referred to as the quality of the institutions to make, implement and enforce sound policies in an efficient, effective, equitable and inclusive manner. 7. The process of decision-making and the process by which decisions are implemented (or not implemented). Governance can be used in several contexts such as corporate governance, international governance, national governance and local governance. 8. The interactions among structures, processes and traditions that determine how power and responsibilities are exercised, how decisions are taken, and how citizens or other stakeholders have their say. Fundamentally, it is about power, relationships and accountability: who has influence, who decides, and how decision-makers are held accountable. 9. The exercise of economic, political and administrative authority to manage the nation’s affairs at all levels. It comprises of mechanisms, processes and institutions through which lOMoAR cPSD| 22081288 citizens and groups articulate their interests, exercise their legal rights and obligations and mediate their differences. Governance is not the sole domain of government but transcends government to encompass the business sector and the civil society. UNITED NATION’S CONCEPT OF GOOD GOVERNANCE According to the United Nations, good governance is measured by eight (8) factors, namely: Participation; Rule of Law; Transparency; Responsiveness; Consensus Oriented; Equity and Inclusiveness; Effectiveness and Efficiency; and Accountability. o Participation requires that all groups, particularly those most vulnerable, have direct or representative access to the systems of government. This manifests as a strong civil society and citizens with the freedom of association and expression. o Rule of Law is exemplified by impartial legal systems that protect the human rights and civil liberties of all citizens, particularly minorities. This is indicated by an independent judicial branch and a police force free from corruption. o Transparency means that citizens understand and have access to the means and manner in which decisions are made, especially if they are directly affected by such decisions. This information must be provided in an understandable and accessible format, typically translated through the media. o Responsiveness simply involves that institutions respond to their stakeholders within a reasonable time frame. o Consensus Oriented is demonstrated by an agenda that seeks to mediate between the many different needs, perspectives, and expectations of a diverse citizenry. Decisions needs to be made in a manner that reflects a deep understanding of the historical, cultural, and social context of the community. o Equity and Inclusiveness depends on ensuring that all the members of a community feel included and empowered to improve or maintain their well-being, especially those individuals and groups that are the most vulnerable. o Effectiveness and Efficiency is developed through the sustainable use of resources to meet the needs of a society. Sustainability refers to both ensuring social investments carry through and natural resources are maintained for future generations. o Accountability refers to institutions being ultimately accountable to the people and one another. This includes government agencies, civil society, and the private sector all being accountable to one another as well. How to achieve good governance? Good governance, to be effective and sustainable, must be anchored in a vigorous working democracy which respects the rule of law, a free press, energetic civil society organizations and effective and independent public. Good governance requires transparency and efficiency also in different government agencies. At the political level, democratic practices, including transparency in policy making and administration, are important aspects of good governance. This is signified by a pluralistic political system that allows the existence of diversity in political and ideological opinions. No wonder that good governance is said to be more easily achieved and guaranteed in a multi-party system than in a mono party system. It also means the holding of regular elections lOMoAR cPSD| 22081288 applying the principle of universal franchise. In order to qualify as democratic, elections must be free and fair. Good governance deals with the nature and limits of state power. The doctrine of the separation of powers is therefore relevant in the establishment of whether or not a country has a political system that is responsive to good governance. The doctrine of the separation of powers is based on the acceptance that there are three main categories of government functions: legislative, executive, and judicial. Corresponding to these are the three main organs of government in a state – the Legislature, the Executive and the Judiciary. The doctrine insists that these three powers and functions of government in a free democracy must be kept separate and exercised by separate organs of the state. Difference between Governance and Good Governance Governance – refers to decision-making process which the ruling party rule the people or the society. Governance takes decisions in 3 parts: 1. Formulation, 2. Implementation, and 3. Evaluation. Governance may be good or bad. Good governance becomes good when the characteristics of good governance are achieved. Good Governance – is a way of governance will increase the welfare of the people as well as it increases the accountability, transparency in governance. Government and Governance Government - Government is one of the four essential elements of the state which consist decision making and implementation body the state. According to Harold Damerow, Government is responsible primarily for making public policy for an entire society. It is the steering mechanisms for a given society. It forms the policies that keep a particular society heading in the right direction. Whereas, governance is about the process/processes the government follow to formulate the rules/laws and how it is implements these laws is the part of the government. It may involve multiple sectors – Government or state, private sector, NGOs, multilateral agencies, civil society and etc. What is Social Responsibility? Social responsibility is an ethical framework and suggests that an entity, be it an organization or individual, has an obligation to act for the benefit of society at large. It is a duty every individual has to perform so as to maintain a balance between the economy and the ecosystems. A trade-off may exist between economic development, in the lOMoAR cPSD| 22081288 material sense, and the welfare of the society and environment, though this has been challenged by many reports over the past decade. Social responsibility means sustaining the equilibrium between the two. It pertains not only to business organizations but also to everyone who’s any action impacts the environment. It is a concept that aims to ensure secure healthcare for the people living in rural areas and eliminate all barriers like distance, financial condition, etc. This responsibility can be passive, by avoiding engaging in socially harmful acts, or active, by performing activities that directly advance social goals. Social responsibility must be intergenerational since the actions of one generation have consequences on those following: Levels of Social Responsibility 1. Economic aspects Companies need to maintain strong economic interests so they can stay in business. Being profitable and providing value to shareholders is part of a company being socially responsible. 2. Legal aspects A company must follow the law and have a legal obligation to do so. For example, car companies are required to meet a certain level of emissions standards in car production. 3. Ethical aspects Acting ethically means going above and beyond the legal requirements and meeting the expectations of society. 4. Philanthropic aspects This is the expectation that companies should give back to society in the form of charitable donations of time, money, and goods. Four Types of Corporate Social Responsibility o Environmental Sustainability Initiatives Environmental sustainability initiatives enacted by businesses generally focus on two main areas: limiting pollution and reducing greenhouse gases. As the awareness of environmental issues grows, businesses that take steps to reduce air, land and water pollution can increase their standing as good corporate citizens while also benefiting society as a whole. o Direct Philanthropic Giving Philanthropic initiatives include the donation of time, money or resources to charities and organizations at local, national or international levels. These donations can be directed to a variety of worthy causes including human rights, national disaster relief, and clean water and education programs in underdeveloped countries. lOMoAR cPSD| 22081288 o Ethical Business Practices The primary focus on ethics is to provide fair labor practices for businesses employees as well as the employees of their suppliers. Fair business practices for employees include equal pay for equal work and living wage compensation initiatives. Ethical labor practices for suppliers include the use of products that have been certified as meeting fair trade standards. o Focus on Economic Responsibility Economic responsibility focuses on practices that facilitate the long-term growth of the business, while also meeting the standards set for ethical, environmental and philanthropic practices. By balancing economic decisions with their overall effects on society, businesses can improve their operations while also engaging in sustainable practices. Kinds of Social Responsibility o Economic Responsibility The business itself is an economic activity. Its main function is to earn profits. To earn profits means to understand the needs and demands of consumers whether it be regarding the quality of the product or its price. While understanding the perspective of the consumer and meeting their needs and demand to earn a profit is the economic responsibility of a business. When a business earns a profit, it also means that the employees earn the profit in terms of incentives. The economic growth of a business is not restricted to itself but affects the society as a whole. o Legal Responsibility Legal responsibilities are not only liable to the individuals in the society but also to the businesses in the society. As business is an entity itself, it must also follow laws and rules. Every business has a responsibility to operate within the boundaries set by the various commissions and agencies at every level of the government. These rules and regulations are set for maintaining balance and the greater good of the society. A law-abiding enterprise is a socially responsible enterprise as well. The business is free to do business however it wants but only within the boundaries of regulations of various laws such as labor law, environmental law and criminal law. For example, it’s a business’s duty to pay taxes to the government and keep its account books clean as it helps the government to track the economic state of the company. o Ethical Responsibility Ethical responsibilities include the behavior of the firm that is expected by the society but not codified in law. The factors of ethical responsibility include that the business must be environmentally friendly. The business should always be aware of its activities and how do they affect the environment. It is the moral and ethical responsibility of every human and every business. lOMoAR cPSD| 22081288 o Discretionary Responsibility Business is one the most important pillar of the society. And therefore, it should support and improve the society whenever it can. If a business is making significant profits, it is the business responsibility that it should be philanthropic towards the society by donating funds or its goods and services. It’s the philanthropic responsibility of the business to help different groups of the society. It should also work towards providing free education by opening educational institutes and training institutes or helping the people affected by natural calamities such as floods and earthquakes. It is the responsibility of the company management to safeguard the capital investment by avoiding speculative activity and undertaking only healthy business ventures which give good returns on investment. CORE SUBJECTS AND KEY PRINCIPLES OF SOCIAL RESPONSIBILITY Guidance on Social Responsibility identifies seven core social responsibility: • Organizational governance • Human rights • Labor practices • Environment • Fair operating practices • Consumer issues • Community involvement and development In addition to the core subjects, ISO 26000 also defines seven key principles of socially responsible behavior: • Accountability • Transparency • Ethical behavior • Respect for stakeholder interests • Respect for the rule of law • lOMoAR cPSD| 22081288 LESSON 2: ETHICS Introduction Ethics is the philosophical study of morality. It is one of the main branches of philosophy which corresponds to the traditional division of philosophy into formal, natural and moral philosophy. It can be turned into a general study of goodness, right action, applied ethics, metaethics, moral psychology and metaphysics of moral responsibility. The general study of goodness and right action is the main task of ethics. It has correlatively its substantive question as: how are we rational beings and what moral principles should govern our choice and pursuit? Ethics refers to well-founded standards of right and wrong that prescribe what humans ought to do, usually in terms of rights, obligations, benefits to society, fairness, or specific virtues. Ethics is very beneficial to organizations if properly implemented. With the successful execution of ethics, organizations are able to attain better quality performance. Meaning of Ethics The word Ethics is derived from the Greek word ‘ethos’ which means character or conduct. Ethics is also called as moral philosophy or philosophical thinking about morality. This morality has been further elaborated as action and behavior which is concerned with ‘good’ or ‘evil’, of particular traditions, groups or individual. The term ‘moral’ and ‘ethical’ is often used as equivalent to right or good as opposed to ‘immoral’ and ‘unethical’. It doesn’t mean morally right or morally good but it definitely pertains to morality. Ethics is that science which is concerned with moral behavior or with right or wrong and good or evil of human behavior. It propounds those principles which make our conduct moral. It becomes clear when we explain the derivation of the words right and good. The word right is derived from Latin word ‘rectus’, which literally means ‘straight’ or ‘according to rule’. It means that we are concerned with those principles which make our conduct right or straight. Nature of Ethics Ethics refer to guide what human ought to do, usually in terms of right, obligations, fairness and specific virtue. It is related to issues of propriety –rightness and wrongness, what is right in ethical, what is wrong in unethical. Sometimes the word ‘proper’ , ‘fair’ and ‘just’ are also used in the place of right and ethical. 4 Nature of Ethics • Ethics is a normative science • Ethics is a science of character • Ethics is not a practical science • Ethics is not an art lOMoAR cPSD| 22081288 Ethics is a Normative Science It is mainly concerned with what ought to be done rather than what is the case. It differs from positive science. A positive science is concerned with facts and explains them by their causes, but ethics deals with values. It evaluates standard or norms by which we can judge human action to be right or wrong. Logic and Aesthetics are also considered as normative sciences. Ethics is a Science of Character Ethics is different from natural and factual science: it is a normative science. Every science is concerned with a particular department of knowledge. So ethics as a science has its own particular sphere. It deals with certain judgements that we make about human conduct. Ethics is not a Practical Science Ethics is not a practical science: it only guides us to achieve a specific goal. Its way is not like practical science which is a means for the realization of an end or ideals. For example, the medical science is a means to remove the causes of disease. So, ethics tries to see what the ultimate goal of life is and how this goal can be reached. Ethics is not an Art Art depends upon result while ethics is based on motive. In the words of Mackenzie, in art the ultimate appeal is to the work achieved, whereas in morals the ultimate appeal is to the inner harmony. Art especially deals with acquisition of skill to produce objects. Scope of Ethics The scope of ethics includes its own subject-matter. Ethics is a normative science that deals with moral ideals or good in the nature of our conduct. As a science of morality it does not enquire into the origin of human conduct but emphasizes on the contents and various problems of moral consciousness like motives, intentions, voluntary actions and so on. Ethics has also an area of study. The problem of ethics is related to our daily life. It is one of the important fields of study in modern times and without morality no human institution can progress. Ethics is a study of those cherished ideals and values which is vital for the growth, development and progress of human society. It is a matter of regret that people have forgotten the higher values of life and are hankering after power and money.
