Corporate Governance and Business Ethics

Assignment 2

Ethical Principals

By Prashanth Doobala 2T1 23 TPS 2nd Shift

ETHICAL PRINCIPLES: Ethical principles are standards of conduct defining the kind of behavior an ethical person should and should not engage in. The following list of principles incorporates the characteristics and values that most people associate with good character and ethical behavior. These principles not only provide a guide to making decisions they also establish the criteria by which your decisions will be judged by others. Abraham Lincoln described character as the tree and reputation as the shadow. Your character is what you really are; your reputation is what people think of you. Thus, your character is determined and defined by your intentions and the extent to which you guide all your actions by these ethical principles while your reputation is purely a function of perceptions. In business, both are important. Trust, one of the most important assets a successful executive needs, can be strengthened or destroyed by both your actions and the way your actions are perceived in relation to these twelve principles: 1. HONESTY. Ethical executives are, above all, worthy of trust. They are honest in all their actions and communications. They are not only truthful they are candid and forthright. Ethical executives do not deliberately mislead or deceive others by misrepresentations, overstatements, partial truths, selective omissions, or any other means and when trust requires it they supply relevant information and correct misapprehensions of fact. 2. INTEGRITY. Ethical executives earn the trust of others through personal integrity. They demonstrate moral courage, doing what they think is right even when there is great pressure to do otherwise. Ethical executives are principled, honorable, upright and scrupulous. They fight for their beliefs and do not sacrifice principle for expediency. 3. PROMISE-KEEPING. Ethical executives can be trusted because they make everyreasonable effort to fulfill the letter and spirit of their promises and commitments. They do not interpret agreements in an unreasonably technical or legalistic manner in order to rationalize non-compliance or create justifications for escaping their commitments. 4. LOYALTY. Ethical executives justify trust by being loyal to their organization and the people they work with. They do not put their loyalty above other ethical principles but they place a high value on protecting and advancing the lawful and

legitimate interests of their companies and their colleagues. They faithfully safeguard their ability to make independent professional judgments by avoiding undue influences and conflicts of interest and they do not use or disclose information learned in confidence for personal advantage. If they decide to accept other employment, ethical executives provide reasonable notice, respect the proprietary information of their former employer, and refuse to engage in any activities that take undue advantage of their previous positions. 5. FAIRNESS. Ethical executives strive to be fair and just in all dealings. They do not exercise power arbitrarily nor do they use overreaching or indecent means to gain or maintain any advantage nor take undue advantage of anothers mistakes or difficulties. Ethical executives manifest a commitment to justice, the equal treatment of individuals, tolerance for and acceptance of diversity. They are openminded; willing to admit they are wrong and, where appropriate, change their positions and beliefs. 6. CARING CONCERN FOR OTHERS. Ethical executives are caring, compassionate, benevolent and kind. They always consider the business, financial and emotional consequences of their actions on others and seek to accomplish their business objectives in a manner that causes the least harm and the greatest positive good. 7. RESPECT FOR OTHERS. Ethical executives demonstrate respect for the human dignity, autonomy, privacy, rights, and interests of all those who have a stake in their decisions; they are courteous and treat all people with equal respect and dignity regardless of sex, race or national origin. Ethical executives adhere to the Golden Rule, striving to treat others the way they would like to be treated. 8. LAW ABIDING. Ethical executives abide by laws, rules and regulations relating to their business activities. 9. COMMITMENT TO EXCELLENCE. Ethical executives pursue excellence in performing their duties, are well-informed and prepared, and constantly endeavor to increase their proficiency in all areas of responsibility. 10. LEADERSHIP. Ethical executives are conscious of the responsibilities and opportunities of their position of leadership and seek to be positive ethical role models by their own conduct and by helping to create an environment in which principled reasoning and ethical decision making are highly prized. 11. REPUTATION AND MORALE. Ethical executives seek to protect and build the companys good reputation and the morale of its employees by engaging in no conduct that might undermine respect and by taking whatever actions are necessary to correct or prevent inappropriate conduct of others. 12. ACCOUNTABILITY. Ethical executives acknowledge and accept personal accountability for the ethical quality of their decisions and omissions to themselves, their colleagues, their companies, and their communities.

ETHICAL EMPOWERMENT: Definitions Empowerment can be considered enabling, supported by information and opportunity. For example, small business employers may empower supervised workers to increase skill sets and the chance of promotion by providing information about industry trends and training opportunities to become more successful within their jobs. Ethics is defined as a code of moral principles and beliefs that ideally guide behavior. For example, in an organizational setting a stated ethics code might discourage employees from deliberately misleading clients about pricing schedules or product quality. Possibilities Incorporating empowerment and ethics into your organizational setting can help employees see the value of their contributions. For example, clearly articulating your company's overarching mission to workers helps them see their work within the context of larger goals. A sense of value empowers the employee to take ownership of his work. Linking individual contributions directly to overall success helps the employee see how unethical choices might cause a negative rippling effect throughout the company. Individual departments might take ownership of productivity or customer service quality goals, empowering decision making to work more cohesively with other departments toward greater success. Limitations One major potential limitation of empowerment and ethics in the workplace lies in authenticity. Employees may feel valued and respected when managers begin to initiate discussions of worker empowerment and organizational ownership, but if it appears there is no real action or sentiment in the words, trust can erode over time. For example, it doesn't make sense to empower employees by allowing them to complete additional training exercises in the hopes of earning recognition or promotion if the employer has no intention of offering greater opportunities to the workers. Likewise, if employees observe supervisors lecturing about ethics within the organization while failing personally to adhere to those expectations, the situation can create dissonance and mistrust. Suggestions A first step in incorporating empowerment and ethics into your small business setting is to formalize and document definitions. Creating a viewable, shared ethics code standardizes expectations. Defining the company mission creates direct links between daily worker contributions and overall success. Articulating ways that

employees may take action provides concrete action steps toward empowerment, including taking college courses, reading industry magazines, completing training or participating in internal internship or mentorship arrangements. Employers should view ethics as a personal and professional responsibility, setting impeccable standards of behavior for supervised workers to emulate. Asking employees for feedback and suggestions throughout these processes helps make your organization's efforts more authentic, creating buy-in from the beginning. Awards and Rewards in Ethics: Employee Engagement: Employee engagement is vitally important in embedding sustainability/CSR into a business. This award will go the company that has shown how they successfully communicate their policies on sustainability with colleagues. More importantly, the winning company will demonstrate how they engage with and listen to employees, and take those ideas on board to refine their sustainability plans, business opportunities and targets. 2012 winner: Compartamos Banco 2012 highly commended: UniCredit Sustainability Commercialized This award goes to the company that most clearly demonstrates how they have incorporated responsible business and sustainability thinking into commercial objectives. The winner will show how they have created a definitive new product or service from sustainability/CR thinking and will be able to show how it has been incorporated into mainstream business thinking across the company. 2012 Winner: Ita Unibanco 2012 highly commended: Vodafones Turkey Farmers Club Head of Sustainability of the Year This award will go to the head of sustainability or corporate responsibility that Ethical Corporations global editorial advisory board feels has done the most to drive systemic change in their company on sustainability and CSR. Not only will the winner have effectively managed risk, but will have also shown how sustainability/CSR related opportunities can be seized by companies and integrated

into their business offerings and operations. Entries are encouraged in this category. Our editorial advisory board will also make suggestions to broaden the pool. The judges will pick the winner. Best Private Company This award will go the privately-held unlisted company which has best demonstrated their commitment to embedding sustainable business across their operations. Judges will be looking for a comprehensive approach, targets across the board and a clear demonstration of top level leadership from the board and owners of the business. 2012 winner: Telecom Development Company Afghanistan (Roshan) 2012 highly commended: SC Johnson Best Small to Medium Enterprise This award goes to the company with under 250 employees that has clearly innovated on sustainability in 2012. The category is a broad one: Entries will be accepted from companies who have, for example, created products or services with a clear social/environmental gain alongside a business case. Other companies who may wish to enter are SMEs who have improved on the social and environmental impact of their existing business operations. The judges will be looking for clear measurable gains rather than pledges to improve. Best Supplier Engagement The company who wins this award will have demonstrated how they are clearly managing a more socially and environmentally responsible supply chain than in the recent past. The award will go to the company that shows clear engagement, both bottom up and top down, with suppliers, and is helping suppliers deliver on sustainability goals proactively, and against firm and clear targets. 2012 winner: Marks and Spencer 2012 highly commended: Bama 2012 highly commended: BT Best Sustainability Report Our best sustainability award will go the company that shows how they have delivered corporate responsibility/sustainability transparency to stakeholders in an

honest, humble and clearly consistent way. The winner will have shown judges how they are communicating progress whilst being honest about the challenges they face and clear about the business wins their report has achieved for the company. Demonstrating critical stakeholder engagement is a must. 2012 winner: Timberland 2012 highly commended: The Co-operative Group Best B2B Partnership This award goes to the best sustainability/corporate responsibility partnership between two companies. The companies could be competitors, business partners or in different industries/sectors. The winner will have shown clear commitment to a long-term, mutually beneficial collaboration that can demonstrate real commercial benefits and social/environmental/governance gains for society. 2012 winner: Heathrow 2012 highly commended: McDonalds and Arla Foods Best Business/NGO Partnership This award goes to the best sustainability/corporate responsibility partnership between a company and other entities (i.e. NGOs, governmental body, charity or other non-profit organizations). The winner will have shown clear commitment to a long-term, mutually beneficial partnership that can demonstrate real social/environmental/governance gains for society. 2012 winner: Novartis and Roll Back Malaria 2012 highly commended: Telenor and Uninor Hand in Hand Citizen Centres