Kingfisher School of Business and Finance

1131 MacArthur Highway, Lucao District, Dagupan City

A.Y. 2016-2017

FINANCE 13

A QUESTION OF ENTITLEMENT:

PERKS AND THE SSS DIRECTOR

Prepared by:

AYSON, Mariel

DE GUZMAN, April Joyce

JOVELLANOS, Berna Joenice

PIDLAOAN, Angelyka

VALDEZ, Faye Lyn

 1. What are the ethical issues here?

SSS have numerous issues from the statements above. One, the compensations
given to a nominee of SSS in the Board of Director that is really not for them for which it
is for the entity as a whole and not them alone. The being unfair of SSS in the terms who
will represent in the board where the more authority is given to them unlike the other
investors. This could be their way to easily commit fraud on their management. Lastly,
the board of director themselves not being fair and just in returning what is unjustifiably
received by them with unjust cost that affects how they do their job. As a leader it is
their responsibility to consider first the good of everyone and not them alone.

a. Business ethics
- Being in the business the leader’s primary role is to ensure the good of everyone
as a whole and not for any single only. They must focus on the common good
and not on personal good. It was hereby the responsibility of the board of
directors to ensure profit as their primary boss are the investors themselves. This
is violated by SSS as they are misuse of the BOD’s power that becomes unjust to
investors they are serving.

b. Global ethics
- This world must promote fairness to everyone. It is one’s responsibility to
consider what is right in making decisions and not to degrade other people by
harming them. This also is violated in the case. The SSS are giving more
advantages to BOD from SSS themselves unlike the others. They must promote
fairness to improve their companies operation efficiently.
Personal ethics

According to the source personal ethics is a category of philosophy that determine what an
individual believe about morality and right and wrong. Principle of personal ethics includes
concern for the well-being of others, respect for the autonomy of others, trustworthiness and
honesty, basic justice and being fair, benevolence, doing good and preventing harm. In SSS
case, we can see that it violated the personal ethics because the directors not just priority their
personal interest over the common interest of the general but also abuse their powers.

2. Should a distinction be made between and among the different compensation schemes
to determine what ethical and unethical behavior is?

Yes. Identifying where the investment really came from is a crucial step.
Conclusions must be supported by the firm evidences. Since the income generated from
 the investments of the directors may come from either ethical or unethical actions. A
distinction among the compensation schemes is the first step in unravelling the truth
and the dirty secrets behind the origin of these investments. Those which resulted from
unethical acts must be transferred to SSS itself, while those which resulted the other
way around must still be accounted to the rightful owners.

3. Should the ethical issue be affected by the amount or size of the entitlements or
payments involved?

Yes because the more incentives, the more authority that are given to the
directors the more they easily commit fraud. Compensation policy is one of the
important factors in an organizations success. It is only define how executives behave
but also helps to determine what kind of executives an organization attracts so when
the directors and officers are giving a just and equitable benefits, business will be
improved but we can’t really avoid that some officers or directors abuse and misuse
their powers just because of the amount of incentives and rights that are given to them.
They sometimes forgot the word integrity and priority their personal interest over the
common interest.
Therefore SSS should give an equitable and just power and payments to every
person that is involved in the business to avoid unethical issues.

4. If the opinion of the department of justice made the payments legal, did it also made
them ethical? Justifiable? Acceptable? Excusable?

The department of justice should specify which remuneration are only to be

legalized. It would be unethical to legalize them because not all justifies the nominee’s
job and not all will be an acceptable excuse to compensate him. Legalizing all of them
would result to abuse of authority just like what happened in the Aquino Administration
but not legalizing incentives would be unfair to the nominee’s condition. Whether
legalizing them or not will make it ethical, justifiable, acceptable or excusable, it would
depend on case to case basis because they weight differently in every situation.

5. What would you do if you were the nominee-director?

If we would be given the chance to be one, we would truly do what is right and just. Nevermind the
practicality of the funds and benefit we would receive,as being a leader it is our obligation to do what
would make everyone better off and not our interest alone. So, we are returning what is really not for us
. This is because in the first place those are not ours but for the SSS and the investors we are serving .