Business Ethics and Corporate Governance, Second Edition (2024)

FAQs

What is business ethics 2 What are the types of business ethics? ›

Business ethics is the prescribed code of conduct for businesses. It is a set of guidelines for dealing with various procedures ethically. The discipline comprises corporate responsibility, personal responsibility, social responsibility, loyalty, fairness, respect, trustworthiness, and technology ethics.

The four P's of corporate governance are people, process, performance, and purpose.

Business Ethics in the '60s

Business ethics saw a notable shift in the 1960s when more companies started embracing social responsibility. Business ethics saw another transition phase in the 1970s and 1980s when philosophy shifted from pure authoritarianism and towards greater collaboration.

Corporate Governance represents the moral framework, the ethical framework and the value framework under which an enterprise takes decisions. In the long run ethical behavior has a positive impact on the company's performance. Ethics just makes good business sense. Values are not for large companies alone.

The three Cs are “compliance,” “consequences” and “contributions.” Applied Business ethics is an applied morality, like legal, engineering and medical ethics.

Like organizational behavior, business ethics impact a company at three different levels. These levels are personal, professional, and organizational.

Instruments of Informal Governance: Co-optation, Control and Camouflage. The evidence collected in the research supports the relevance of three types of informal governance practices. Nicknamed “the 3C's”, they are associated with high levels of corruption.

It has also been designed to cross-reference the FRC's Corporate Governance Code, and is centred on five fundamental principles of corporate governance: integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour.

Julia Unwin, former chief executive of the Joseph Rowntree Foundation, identified the 'five Ss in governance'. These are Support, Stretch, Scrutiny, Stewardship and Strategy.

Norman Bowie dates the birth of business ethics as November 1974, with the first conference in business ethics, which was held at the University of Kansas, and which resulted in the first anthology used in the new courses that started popping up thereafter in business ethics.

What is the difference between compliance and ethics? ›

With compliance, the boundary is defined by a law, rule, regulation or policy and adherence is mandatory. Ethics, though, involves judgment and making choices about conduct that reflect values: right and wrong or good and bad.

Why Business Ethics Are Important. It's important for organizations to operate with good business ethics to avoid legal and regulatory problems. However, it's also vital to exhibit strong ethical behavior to maintain a positive reputation, both with the public and employees.

Corporate governance rules are important because they outline a company's ethical beliefs and provide a working roadmap for a company's objectives and activities. In short, these plans affect and influence every aspect of a company's daily operations and management.

Business ethics protect companies from legal liability and ensure that they treat their customers and team members with respect. Corporate ethics codes often include subjects like social responsibility, insider trading, discrimination, corporate governance and bribery.

An ethical dilemma is a paradox that comes up when there are two or more options, but neither of them are the best ethical or moral option. False accounting, sexual harassment, data privacy, nepotism, discrimination—these are just some of the ethical dilemmas that happen in today's workplace.

Fairness, integrity, decency and sustainability -- the four pillars of ethical enterprise.

The term business ethics refers to a set of moral standards and practices that guides business organisations based on principles like respect, fairness, trust, and responsibility.

Business ethics is an evolving topic. Generally, there are about 12 ethical principles: honesty, fairness, leadership, integrity, compassion, respect, responsibility, loyalty, law-abiding, transparency, and environmental concerns.

(i) Politics without Principles (ii) Wealth without Work (iii) Commerce without Morality (iv) Knowledge without Character (v) Pleasure without Conscience (vi) Science without Humanity (vii) Worship without Sacrifice.

WHAT ARE THE 7 MAIN ETHICAL PRINCIPLES IN NURSING AND WHY THEY ARE IMPORTANT? There are seven primary ethical principles of nursing: accountability, justice, nonmaleficence, autonomy, beneficence, fidelity, and veracity.

What are 3 factors that influence business ethics? ›

Key aspects of King III

The philosophy of King III revolves around leadership, sustainability and corporate citizenship. Leadership: Good governance is essentially about effective leadership. Leadership is characterised by the ethical values of responsibility, accountability, fairness and transparency.

The three pillars of corporate governance are: transparency, accountability, and security. All three are critical in successfully running a company and forming solid professional relationships among its stakeholders which include board directors, managers, employees, and most importantly, shareholders.

The philosophy of the code consists of the three key elements of leadership, sustainability and good corporate citizenship. It views good governance as essentially being effective, ethical leadership.

Principle 7: Members of the Board are duty-bound to apply high ethical standards, taking into account the interests of all stakeholders. Principle 8: The company should establish corporate disclosure policies and procedures that are practical and in accordance with best practices and regulatory expectations.

Good governance has 8 major characteristics. 'It is participatory, consensus-oriented, accountable, transparent, responsive, effective and efficient, equitable and inclusive and follows the rule of law.

That's why many governance experts break it down into four simple words: People, Purpose, Process,and Performance. These are the Four Ps of Corporate Governance, the guiding philosophies behind why governance exists and how it operates. Let's have a look at exactly what each of the Ps means.

What Is a Code of Ethics in Business? A code of ethics in business is a set of guiding principles intended to ensure a business and its employees act with honesty and integrity in all facets of its day-to-day operations and to only engage in acts that promote a benefit to society.

What is business ethics by Peter Drucker? ›

Drucker stated that profit as an ethical "metric" rested on very weak moral grounds as an incentive and could only be justified as such if it were a genuine cost and especially if it were the only way to maintain jobs and to grow new ones.

The Principles of Biomedical Ethics by Beauchamp and Childress is a classic in the field of medical ethics. The first edition was published in 1979 and “unleashed” the four principles of respect for autonomy, non-maleficence, beneficence, and justice on the newly emerging field.

Business ethics enhances the law by outlining acceptable behaviors beyond government control. Corporations establish business ethics to promote integrity among their employees and gain trust from key stakeholders, such as investors and consumers. While corporate ethics programs have become common, the quality varies.

Harassment and Discrimination in the Workplace

Harassment and discrimination are arguably the largest ethical issues that impact business owners today.

There are mistakes, inevitably, and the human tendency to deny them or cover them up, which makes change very difficult. Moral sensitivity is reduced. Ethical problems are not apparent, as they are often masked under technical considerations, which are the dominant force.

Boards of directors are responsible for the governance of their companies. The shareholders role in governance is to appoint directors and auditors and also to satisfy themselves that an appropriate governance structure is in place. The Board of Directors are given authority to act on behalf of the company.

Corporate Governance Law describes ways in which a company is managed and regulated. Corporate governance aims to keep corporations, financial institutions, and markets honest and reputable, in order to protect social and economic development.

What is the code of ethics in corporate governance? ›

The Board of Directors and the Disciplinary Board shall work together on violations of ethical principles. Codes of Conduct are those principles of profit-seeking companies and their employees that they give priority to in the work they perform as well as the responsibilities they assume.

All businesses have basic ethical and legal responsibilities; however, the most successful businesses establish a strong foundation of corporate citizenship, showing a commitment to ethical behavior by creating a balance between the needs of shareholders and the needs of the community and environment in the surrounding ...

CSR is based on the concept of self-governance related to the external stakeholders and external regulatory mechanism whereas corporate governance is the widest control mechanism which the company undertakes in relation to its management decisions.

Corporate governance demands that executives make their companies more transparent and accountable; social responsibility demands that companies support society with their activities, and business ethics clarifies moral norms for employees.

The 4 P's of Corporate Governance are the governing ideas that explain why and how governance exists. People, process, performance, and purpose are the four Ps of good corporate governance.

The term “corporate responsibility” refers to the actions taken by businesses in response to such expectations in order to enhance the mutually dependent relationship between business and societies.

Four broad categories of ethical theory include deontology, utilitarianism, rights, and virtues.

There are two main types of ethical inquiry: Theoretical ethics and applied ethics.

Virtue ethics : What is moral is what makes us the best person we could be. Deontology : What is moral is what follows from absolute moral duties. Utilitarianism : What is morally right is what generates the best outcome for the largest number of people.

What are the 3 types of ethics and define each? ›

The three major types of ethics are deontological, teleological and virtue-based. In deontological ethics, you must simply know what your duties are and what the rules are that regulate them, then you must do those duties in order to be moral. In teleological ethics, being moral is about cause-and-effect.

Ethics, truth and reason -- Egoism -- Hedonism -- Naturalism and virtue theory -- Existentialism -- Kantianism -- Utilitarianism -- Contractualism -- Ethics, religion, and the meaning of life.