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APCO 1P50 (12)
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Brock University
Applied Computing
Harry John

APCO 1P50 Wednesday October 3, 2012 Improving Corporate Ethics Characteristics of a successful ethics program  Employees willing to seek advice about ethical issues  Employees feel prepared to handle situations that could lead to misconduct  Employees are rewarded for ethical behaviour  Employees are not rewarded for success obtained through questionable means  Employees feel positive about their company Appointing a Corporate Ethics Officer Duties of the Corporate Ethics Officer:  Provides vision/leadership in business conduct.  Should be well-respected, senior-level manager who reports directly to the CEO.  Ensures ethical procedures are put in place.  Creates and maintains ethics culture.  Is responsible for key knowledge/contact person for ethical issues. Ethical Standards Set by Board of Directors  Board oversees the organization’s business activities and management.  Board members of company are expected to: o Conduct themselves according to the highest standards of personal and professional integrity. o Set standard for company-wide ethical conduct. o Ensure complicance with laws and regulations. o Create environment in which employees can seek advice about business conduct, raise issues, and report misconduct. Establishing a Corporate Code of Ethics Features of a Code of Ethics:  Highlights an organization’s key ethical issues.  Identifies overarching values and important principles.  Focuses employees on areas of ethical risk.  Offers guidance for employees to recognize and deal with ethical issues.  Provides mechanisms to report unethical conduct.  Helps employees avide by the law, follow necessary regulations, and behave in an ethical manner. Sarbanes-Oxley Act of 2002 (US)  Enacted in response to public outrage over several major accounting scandals.  Section 404 requires that the CEO and CFO sign any SEC filing to attest to its accuracy.  Section 406 requires public companies to disclose whether or not they have a code of ethics and if any waivers to that code have been granted. Cannot gain company-wide acceptance unless it is: o Developed with employee pariticpation. o Fully endorsed by organization’s leadership.  Must continually be applied to company’s decision making and emphasized as part of its culture.  Breaches in the code of ethics must be identified and dealt with appropriately. APCO 1P50 Wednesday October 3, 2012 Conducting Social Audits  Social audits review how well an organization is meeting ethical/social responsibility goals.  Communicates new goals for upcoming year.  Shared broadly with employees, shareholders, investors, market analysts, customers, suppliers, gov’t agencies and local communities. Requiring Employees to Take Ethics Training  Personal convictions improved through education.  Comprehensive ethics education program encourages employees to act responsibly and ethically. o Often presented in small workshop formats. o employees apply code of ethics to hypothetical but realistic case studies. o Demonstration of recent company decisions based on principles form the code of ethics. o Critical that training increase the percentage of employees who report incidents of misconduct. o Employees must  Learn effective ways of reporting incidents.  Be reassured their feedback will be acted on without retaliation. Including Ethical Criteria in Employee Appraisals  Only 43% of companies include ethical conduct in employee’s performance appraisal.  Ethical criteria can include: o Treating others fairly and with respect. o Operating effectively in a multicultural environment. o Accepting personal accountability. o Continually developing themselves and others. o Operating openly and honestly with all. Creating an Ethical Work Environment  Good employees may make bad ethical choices.  May be encouraged to do ‘whatever it takes’ to get the job done.  Employees need a knowledgable resource to discuss perceived unethical practices: o A manager o Legal/Interal Audit Department o Business Unit’s legal counsel APCO 1P50 Wednesday October 3, 2012 o Anonymously through internal web site. Including Ethical Considerations in Decision Making  Steps in a decision-making process Develop problem statement  Identify alternatives  Evaluate and choose alternative  Implement decision  Evaluate results  Success Develop a Problem Statement  Clear, concise description of the issue  Answers these questions: o What causes people to think there is a problem? o Who is directly affected by the problem? o Is there anyone else affected? o How often does it occur? o What is the impact of the problem? o How serious is the problem?  Most critical step in decision-making process. APCO 1P50 Wednesday October 3, 2012
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