CHAPTER 4: Legal, Regulatory, and Political Issues

• A corporation is an entity created by law
• Laws are considered conduct

  approved and enforced by a

  government of a particular country.
• Society cannot function effectively

  if there is no basis or a mechanism

  that regulates the interaction

  between its citizenry.
• Business law (or commercial law)

  is a body of law that deals with

  corporate contracts, manufacture

  or sale of goods and services,

  employment, labor relations, and

  many others.
• Regulation is defined as a legal

  system that controls and regulates

  the business activities of a certain

  country.
• Corporations are legal entities that

  have similar rights accorded to that

  of a person.
• Corporate governance deals with

  external regulation (legal) and

  internal control of the corporation

  through legal means by its board of

  directors.
• Milton Friedman, considered by

  many to be the foremost economist

  of the twentieth century, suggested

  that more money infused in an

  economic system lessens the

  degree of government

  involvement.
• Free Market - Considered a basic form of

  capitalism (monetary goods and services

  are owned by private individuals and

  companies), a free market is an economic

  system that restricts government

  intervention in the economy.
• ➢ The Corporation Code of the

  Philippines was approved in 1980

  that prescribes the rules and

  regulations in the establishment

  and operation of corporations in

  the Philippines.
• Political issues are important topics

  of good corporate governance.
• Good governance does not limit

  itself to addressing business

  disruptions and creating a

  competitive advantage through

  strategy.
• Environmental issues such as

  global warming caused by pollution

  and greenhouse gas emissions

  have gained robust public support

  in the last 20 years.