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CORPORATE ETHICS & GOVERNANCE - Coggle Diagram
CORPORATE ETHICS &
GOVERNANCE
Ethics & Governance
:warning:
ETHICS
: Is a reflection on moral practices concern with customary practices and social practices defining what is wrong and right.
Corporate Ethics:
:question: It encompasses many areas ranging from board strategies to how companies negotiate with suppliers
:question: it goes beyond legal requirements and is to some extent therefore discretionary
Code of Corporate Ethics
Key areas in code of corporate
:<3: Business
:<3: Employees
:<3: Customer relations
:<3: Shareholders or other providers of money
:<3: Suppliers
:<3: Society or wider community
:<3: Implementation
Purpose of corporate and professional codes:
:star: Codes are voluntary carried out w/o requirements of legal enforcement
:star: Experience has revealed that to be effective, a code must be reinforced by a comprehensive ethical culture
Code of Best Practices:
Effectiveness will be limited due to:
:explode: code can be imposed w/o communication to explain what is trying to achieved
:explode: code be breached by senior managment w/o penalty.
:explode: Codes are written, then forgotten as it is now in place
To be effective, the code must have:
:explode: Participation from all groups
:explode: Disciplinary actions for breach of the code
:explode: Publicity of breaches and actions taken
:explode: Communication and support from top-down
Advantages & Disadvantages of code
ADVANTAGES
: :check: Provides framework for conflict resolution
:check: Builds reputation of the company in market
:check: Fosters an environment of trust and ethical behavior
DISADVANTAGES
: :red_cross: May not fit the precise ethical issue
:red_cross: Can be interpreted in different ways
:red_cross: May be no clear or even ineffective punishment for breaching code
Ethical threats
and safeguards
Ethical treats
- an ethical threats is a situation where a person or corporation is tempted not to follow the code of ethics
Safeguard
- an ethical safeguards provides guidance or a course of action which attempts to remove the ethical threat.
Safeguards seek to reduce pr eliminate threats:
:black_flag:
Profession:
Education and training including CPD requirements
:black_flag:
Work Environment
: Internal control systems, review procedures, disciplinary procedures
:black_flag:
Individual
: complying with professional standards, mentoring, maintaining records of contention issues.
Ethical dilemmas and conflict resolution
Rules based approach
:
:warning:establish ethical rules that members must follow
:warning: ensure members are aware of the rules
:warning: ensure members comply with those rules
Advantages:
: :lock: Easy to check compliance as based on fact
:lock: Easy to amend rules set as required
Disadvantages:
:lock: The list of rules may not be complete
:lock: There is no room for individual decision making
Principles based approach:
:red_flag: establish fundamental ethical principles that members must follow
:red_flag: ensure members are aware of the principles
:red_flag: require members to identify and address threats to compliance with the principles
Advantages:
:lock: Recognise that every threat cannot simply be listed
:lock: Allow subjective judgement, so the member can apply the principles in accordance with their specific situation
Disadvantages:
:lock: Difficult to confirm that the compliance action was appropriate
Ethical conflict resolution:
:<3: Gather all relevant facts
:<3: Establish ethical issues involved
:<3: Refer to relevant fundamental principles
:<3: Follow established internal procedures
Building an Integrity System
:!!: Integrity is a word used to describe "upright, reliable and unaffected set of values"
:!!: Integrity system means the plans, policies, guidelines, codes of beat practices and procedures devised by org. to maintain integrity
Formal and informal elements to guide employee:
:tada: Ethical leadership by executives and supervisors
:tada: Reward systems to incorporate ethical considerations
:tada: Perceived fairness, fair treatment of employees