Business ethics lecture 3

Corporate Governance Fiduciaries:  Persons placed in positions of trust who use due care and loyalty in acting on behalf of the best interest of the organization..  Duty of Diligence:

Business Ethics

Corporate Governance

 Fiduciaries:

 Persons placed in positions of trust who use due care and loyalty in acting on behalf of the best interest of the organization.

 Duty of Diligence:

 A duty of care to make informed and

prudent decions.

 Duty of loyalty;

 All decisions should be in the interests of the corporation and its stakeholders.

 Conflict of Interest:

 When a person in a powerful authority uses the position to obtain personal gain usually at the expense of the

organization.

 BoD and Officers’ compensation !

To remove the opportunity for

employees to make unethical

decions; developed formal systems

of accountability, oversight, and

control are knwn as corporate

governance

 Accountability:

 How closely workplace decisions are aligned with a firm’s stated strategic direction.

 Alco compliance with ethical and legal

considerations.

 Oversight:

 A system of checks and balances that limits employees’ and managers’ opportunities to deviate from policies and strategies and

that prevent unethical and illegal activities.

 Process of auditing and improving organizational decisions and actions.

 Collusion;

 A secret agreement between two

parties for a fraudulent, illegal, or

deceitful purpose.

 Deceitful purpose; “any sort of trickery, misinterpretation, or a strategy to lead others to believe one truth but not the entire truth”

 “Tell the truth to the best of your

knowledge without hiding anything”

 Confucius

 Li

 Yi

 Ren

 Absence of honesty = ?

 Being just, equitable and impartial

 Equity

 Reciprocity

 Optimization

 Being whole, sound and in an unimpaired condition

 Uncompromising adherence to ethical values

 Unwillingness to deviate from standards of behaviour