Business Ethics and Corporate Social

Responsibility

There is growing importance of

business ethics, integrity, code of
ethics, obligation, good corporate
governance and corporate social
responsibility in setting business
objectives in the business world
today.

Sabga: Companies need good corporate governance

Sunday, November 25, 2012

Andrew Sabga

Andrew Sabga, president of the T&T Chamber of Industry and Commerce, says Government must
devise proper policies to ensure good governance practices among businesses in T&T. But he did not
 rule out the role of the private sector, including the Chamber, in protecting the reputation of the
industry in light of the collapse and CL Financial and Hindu Credit Union.

The ongoing commission of enquiry in this financial debacle is revealing numerous cases of
management inefficiencies and in some cases greed which led to the failure of the companies, causing
the State to inject $20 billion CL Financial in an effort to save the investment of depositors.

Sabga was speaking at Tuesdays gala awards ceremony at the Hilton Trinidad, hosted by the Ministry
of Trade, Industry and Investment, to celebrate the 60 companies that re-invented themselves to
become modern-day symbols of excellence.

Sabga said, One cannot underestimate the importance of good corporate governance, which is the
foundation for sustainable business. We must now look at formalising the process, through proper
government directive and further private-sector partnership with the public sector, to continue the
efforts of economic diversity in T&T.

He added, As we look back through the past 50 years, we see that those companies which continue
to succeed today have placed emphasis on strong corporate governance and have made their core
values and even our nations watchwordsDiscipline, Production and Tolerancethe backbone of their
companies policies and procedures.

We need to ensure, as business practitioners, that we all make a commitment to good corporate
governance and incorporate ethical behaviour in our business strategy, operations and culture, so that
those who succeed us can stand proud and carry on the great legacy, we have created.

Sabga called for more companies to embrace the concept of corporate social responsibility. For those
already on board, he urged them to go beyond mere obligation as required by the law and show a
genuine concern, not only for the environment, but for the nation. Doing business in an ethical way
was in the interest of the wider community, he said, and companies must continue to find ways to give
back to the people of T&T, who have been good to them.

He said: Fifty years ago, in 1962, the way business was conducted was vastly different from what it is
today. In the past half-century, advances in technology have drastically improved the way we all
conduct business. Business processes have changed and made organisation more efficient.

At the same time, technology has opened lines of communication, allowing businesses to
communicate and collaborate beyond borders with ease. Collaboration is the future of the business
competitiveness as companies become more innovative, connect to people better and overall act
faster in the flattened marketplace of todays global, economy, he said.
What is 'Business Ethics'?
The study of proper business policies and practices regarding
potentially controversial issues, such as corporate
governance, insider trading, bribery, discrimination,
corporate social responsibility and fiduciary responsibilities.
Business ethics are often guided by law, while other times
provide a basic framework that businesses may choose to
follow in order to gain public acceptance.

Integrity in Business

In the rush to start a business, keep it running and make money, theres one important
detail that can get lost in the hullabaloo: integrity. Integrity isnt something easily
monetized, but when its implemented into a businesss DNA, there is plenty of money to
save and the great potential to make more.

Its easy to overlook the quality of integrity when running a business, but incorporating it
into all of your business dealings and decisions can advance your company to greater levels
of success.

Integrity is synonymous with trust in the business world. After all, clients have to trust the
people they do business with to keep them, so owning up to every responsibility is
paramount.

The bottom line is consistency. A company needs to maintain what it says it does, and who it
says it is. There shouldn't be an external impression of the business that is dramatically
different from the internal version.

Especially in rough economic times, to be someone the buying public can trust is priceless.
So while it might not seem immediately top on your list, your business can't afford to
compromise its integrity in this competitive market. "When people choose to lead with
integrity they position themselves at the top of their industry," says Lisa Krohn, a personal
 organizer and life coach who works to bring the concept of integrity back into businesses.
"All the other details, like the product, or service, or whatever, come after integrity because
people do business with people they know, like, and trust."

What are Ethical codes?

These are adopted by organizations to assist members in

understanding the difference between 'right' and 'wrong' and in
applying that understanding to their decisions. An ethical code
generally implies documents at three levels: codes of business
ethics, codes of conduct for employees, and codes of professional
practice.

A code of ethics will start by setting out the values that underpin
the code and will describe a company's obligation to its
stakeholders. The code is publicly available and addressed to
anyone with an interest in the company's activities and the way it
does business. It will include details of how the company plans to
implement its values and vision, as well as guidance to staff on
ethical standards and how to achieve them.

What is good corporate governance?

The framework of rules and practices by which a board of

directors ensures accountability, fairness, and transparency in a
company's relationship with its all stakeholders (financiers,
customers, management, employees, government, and the
community).

The corporate governance framework consists of (1) explicit and

implicit contracts between the company and the stakeholders for
distribution of responsibilities, rights, and rewards, (2) procedures
for reconciling the sometimes conflicting interests of stakeholders
in accordance with their duties, privileges, and roles, and (3)
procedures for proper supervision, control, and information-flows
to serve as a system of checks-and-balances.

What is 'Corporate Social Responsibility'?

The term "corporate social responsibility" came into common use

in the late 1960s and early 1970s after many multinational
corporations formed the term stakeholder, meaning those on
whom an organization's activities have an impact.
CSR refers to corporate initiatives to assess and take
responsibility for the company's effects on the environment and
impact on social welfare. The term generally applies to company
efforts that go beyond what may be required by regulators or
environmental protection groups.

Corporate social responsibility may also be referred to as

"corporate citizenship" and can involve incurring short-term costs
that do not provide an immediate financial benefit to the
company, but instead promote positive social and environmental
change.