Financial Reporting and Ethics - The Institute of Chartered ...

CORPORATE GOVERNANCEimitated. They tend to confer sustainable competitive advantage uponthe firm which displays and practices ethical norms, over and aboveother companies.11.7.4 The synergy which the symbiotic relationships between the variousstakeholders impacts on corporate governance is very strong. Thefollowing areas can be identified:(a)(b)(c)The World Bank, through its President, James Wolfensohn, oncedeclared in 1999, “the proper governance of companies willbecome as crucial to the world economy as the proper governanceof countries.” Raising the standards of corporate governance istherefore expected to assist developing countries as Nigeria toattract foreign investments. International institutional investorslook for strong board effectiveness, transparency, accountabilityand financial probity wherever in the world they like to put theirmoney.There is strong positive association between the commitmentand loyalty of employees and the moral index of a corporation.Where a country or company is selfishly run by the leaders, in away that says “we live, others may die,” the citizens or employeeswill adopt the same way of life. A company has to provide afacilitating environment for high productivity and production totake place and pay its employees fair salaries.A company produces goods and services of the right quality andquantity, in consonance with the stipulations of the Sale of GoodsAct and as ordered for by the purchasers. The goods and/orservices supplied solve the problems of the customers and helpthem lead more qualitative lives. Where a company is able togenerate enough net earnings to equip it to meet its primaryresponsibilities, what the organisation is expected to do next isto work towards mitigating the unfavorable side effects of itsactivities. This is achievable by compensating the persons orcommunities affected. The oil producing areas of Nigeria oughtto be well compensated for all the pollution and environmentaldegradation caused by the oil companies.Companies pay their corporation taxes; remit withholding andpay-as-you-earn tax deductions made on behalf of Government,promptly. Companies should not undertake unethical practicesby funding their cash flow shortfalls at the expense of theirsuppliers. A typical way of doing this is by deliberately increasingaverage period of paying creditors, contrary to an existing writtenor implied agreement to settle accounts within a specified periodof time.223