Ethics Chap 8

 Part Four  Implementing  Impleme nting  Business Ethics Ethics in a Global  Economy

Chapter 8 Developing an Effective Ethics Program

Corporations As Moral Agents 

Corporations have the same rights and responsibilities responsibiliti es as individuals 

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 All e"ployees "ust obey laws and regulations de$ning acceptable business conduct 

Corporate culture without values and appropriate communication about ethics can facilitate individual misconduct 

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%thical corporate culture does not evolve, but re&uires ethical polices '"ple"enting a corporate ethics progra"  pro"otes the corporation as a "oral "oral agent 

Most Common Observed Forms of Misconduct

Source: Ethics Resource Center, (ational )usiness %thics *urvey + o! ortune 500 + %"ployees- An 'nvestigation into the *tate o! %thics at A"ericas Most /ower!ul Co"panies Arlington, A- %thics esource Center, 20123.

The Need for Organizational Ethics Programs 

t is nearl! impossible to "now all relevant laws 

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#rgani$ations can become bad barrels 

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%thics progra"s increase ethical awareness /ressures to succeed create opportunities rewarding unethical decisions

Established ethics programs help emplo!ees determine what behaviors are acceptable 

4op "anage"ent "ust integrate these codes, values and standards into the corporate culture

Components of a Strong Ethics Program A strong ethics program includes     

&ritten codes of conduct Ethics o'cers to oversee the program Careful delegation of authorit! (ormal ethics training Rigorous auditing, monitoring, enforcement, and revision of program standards

 An Effective Ethics Program E*ective ethics program ensure that all emplo!ees understand and compl! with the ethical culture  

Cannot assume emplo!ees "now how to behave when entering a new +ob Ethics programs act as important deterrents to organi$ational misconduct

Ethics Programs and  Avoiding egal Problems  -he (S.# encourages assessing "e! ris"s   

(irms can use assessments to update their internal control mechanisms Ethics programs must be designed and implemented to address these ris"s Ethics programs can help a /rm avoid civil liabilit! if the! show due diligence in preventing misconduct

Minimum !e"uirements for Ethics#Compliance 1. Standards and procedures, such as codes of ethics, that are reasonably capable of detecting and preventing misconduct 2 igh5level personnel who are responsible for an ethics and compliance program 3 6o substantial discretionar! authorit! given to individuals with a propensit! for misconduct 4 Standards and procedures communicated e*ectivel! via ethics training programs % S!stems to monitor, audit, and report misconduct ) Consistent enforcement of standards, codes, and punishment  Continuous improvement the*entencing ethicsuidelines and compliance Source: dapted from S Sentencing Commission,of ederal Manual , e6ective (ove"ber 1, 2007 *t. /aul, M(- 8est, 20093. program

 $hich is %ustified to Survive

Source: Ernst 8 9oung, rowing )eyond- a place !or integrity:12th lobal raud *urvey , http-;;www.ey.co";/ublication;vwL?>s, or other eDperiential learning opportunities 3 e the"

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"e! is to delegate authorit! carefull! so the organi$ation can achieve ethical performance

arger Companies and !esponsibilit, !eporting

esearch per!or"ed on @,700 global co"panies, including the worlds largest 250 co"panies Source: NJA. nternational Corporate Responsibilit! Reporting Surve!, 2B11, http:www"pmgcom.lobalenssuesndnsightsrticlesJublicationscorporateresponsibilit!>ocuments2B115 surve!pdf @accessed Aa! ), 2B13

Common )esign and *mplementation Mista-es 

(ailure to understand and appreciate goals  Setting unrealisticimmeasurable ob+ectives  nsupportive top management  ne*ective or incomprehensible content   -ransferring an KmericanF program to a /rmKs international operations  >esigning a program that is little more than a series of lectures resulting in low recall