COGO LU1 THEME 3

According to the text, can governance be separated from good leadership?

• Yes, governance can function independently of leadership

• No, governance needs effective leadership to deliver results

• Governance and leadership are unrelated concepts

• Good governance is not influenced by leadership

Answer explanation

Good governance can attain the best results only if it functions within a framework of interaction with effective leadership. This dispels the theory that governance can on its own deliver results, because in reality it is leadership that drives the whole to deliver the required performance.

What role does governance play in relation to leaders?

• Governance hinders leaders from achieving their goals

• Leaders are not accountable to governance standards

• Governance provides strategic direction for leaders

• Leaders are not affected by governance decisions

Answer explanation

•Governance plays an important role in providing strategic direction for leaders and helping them to foster commitment, shared aims and accountability.

Good corporate governance is essentially about effective, ethical leadership. While leadership starts with each individual director, it finds its expression through the board as a collective, setting the appropriate example and tone which is referred to as ethical governance

What is the essence of good corporate governance?

• Ethical leadership is not important in corporate governance

• Good corporate governance is essentially about effective, ethical leadership

• Good governance is solely about following rules

• Effective leadership is not a part of good governance

Answer explanation

•Governance plays an important role in providing strategic direction for leaders and helping them to foster commitment, shared aims and accountability.

Good corporate governance is essentially about effective, ethical leadership. While leadership starts with each individual director, it finds its expression through the board as a collective, setting the appropriate example and tone which is referred to as ethical governance

What does King IV explain about the governance of ethics?

• Ethical governance is not necessary for organizations

• Ethics have no role in governance according to King IV

• Ethical culture is not influenced by the governing body

• Ethical culture should align with the tone set by the governing body

Answer explanation

•King IV explains the governance of ethics as the role of the governing body in ensuring that the ethical culture within the organisation is aligned to the tone set by the governing body through the implementation of appropriate policies and practices.

According to the text, what is the importance of moral virtue?

• Moral virtue is inherited and not learned

• Moral virtue is not relevant in leadership

• Moral virtue is learned over time and not inherited

• Moral virtue has no impact on ethical culture

Answer explanation

•Ultimately, according to the Greek philosopher Aristotle, moral virtue is learned, not inherited and excellence is not an act, but a habit learned over time. “Leaders are already teachers of their culture, whether they are aware of it or not.” Setting the right ethical example is critical.

•Efforts to create an ethical culture are frequently frustrated by a lack of commitment by middle managers who are often too busy chasing sales targets to worry about the ‘soft issue’ of ethics.

How can an ethical culture be created?

• By avoiding moral courage in decision-making

• By ignoring the 'tone at the top'

• By identifying shared core values and having commitment at the top

• By not involving all employees in the process

Answer explanation

Creating an ethical culture:

Identify shared core value

Common language

Commitment at the top

Moral courage

What are some key ethical issues for companies in the 21st century?

• Long term thinking is not important for companies

• Inequality and Unemployment are key ethical issues

• Employment Equity is not a concern for companies

• Tax structuring is not an ethical issue

Answer explanation

•Tax structuring

•Employment Equity

•Shared access to natural resources

•Diversity

•BEE (Black economic empowerment)

•Inequality and Unemployment

What does the African Ubuntu philosophy emphasize in corporate governance?

• Expansive ethic of governance

• Inclusive ethic of governance

• Exclusion of community members

• Serving only the interests of shareholders

Answer explanation

•The main difference is that the African perspective on the ethics of corporate governance is mostly grounded by an inclusive ethic of governance, whilst the Asian perspective on the ethics of corporate governance is founded on the expansive ethic of governance.

What is the main difference between the African and Asian perspectives on corporate governance ethics?

• African perspective is inclusive while Asian perspective is expansive

• Asian perspective emphasizes community and solidarity

• Asian perspective is not influenced by socio-cultural values

• African perspective focuses on shareholder interests only

Answer explanation

•The main difference is that the African perspective on the ethics of corporate governance is mostly grounded by an inclusive ethic of governance, whilst the Asian perspective on the ethics of corporate governance is founded on the expansive ethic of governance.

What is the importance of commitment at the top in creating an ethical culture?

• Commitment at the top has no impact on ethical culture

• Commitment at the top is essential for ethical culture

• Commitment at the top hinders ethical practices

• Commitment at the top is irrelevant in ethical decision-making