Companies need to answer to two aspects of their operations. 1.

The quality of their management

- both in terms of people and processes (the inner circle). 2. The nature of, and quantity of their
impact on society in the various areas.

Outside stakeholders are taking an increasing interest in the activity of the company. Most look
to the outer circle - what the company has actually done, good or bad, in terms of its products
and services, in terms of its impact on the environment and on local communities, or in how it
treats and develops its workforce. Out of the various stakeholders, it is financial analysts who are
predominantly focused - as well as past financial performance - on quality of management as an
indicator of likely future performance.

Other definitions
The World Business Council for Sustainable Development in its publication Making Good
Business Sense by Lord Holme and Richard Watts, used the following definition:
Corporate Social Responsibility is the continuing commitment by business to behave ethically
and contribute to economic development while improving the quality of life of the workforce and
their families as well as of the local community and society at large
The same report gave some evidence of the different perceptions of what this should mean from
a number of different societies across the world. Definitions as different as CSR is about capacity
building for sustainable livelihoods. It respects cultural differences and finds the business
opportunities in building the skills of employees, the community and the government from
Ghana, through to CSR is about business giving back to society from the Phillipines.

Traditionally in the United States, CSR has been defined much more in terms of a philanphropic
model. Companies make profits, unhindered except by fulfilling their duty to pay taxes. Then
they donate a certain share of the profits to charitable causes. It is seen as tainting the act for the
company to receive any benefit from the giving.

Sarbanes oaxley act 2002

The Sarbanes-Oxley Act of 2002 is a federal law that established sweeping auditing and
financial regulations for public companies. Lawmakers created the legislation to help protect
shareholders, employees and the public from accounting errors and fraudulent financial
practices.
It banned company loans to executives and gave job protection to whistleblowers. The Act
strengthens the independence and financial literacy of corporate boards.

1. Misusing company time

Whether it is covering for someone who shows up late or altering a time sheet,
misusing company time tops the list. This category includes knowing that one of
your co-workers is conducting personal business on company time. By "personal
business" the survey recognizes the difference between making cold calls to
advance your freelance business and calling your spouse to find out how your
sick child is doing.
2. Abusive behavior

Too many workplaces are filled with managers and supervisors who use their
position and power to mistreat or disrespect others. Unfortunately, unless the
situation you're in involves race, gender or ethnic origin, there is often no legal
protection against abusive behavior in the workplace. To learn more, check out
the Workplace Bullying Institute.

3. Employee theft

According to a recent study by Jack L. Hayes International, one out of every 40

employees in 2012 was caught stealing from their employer. Even more startling
is that these employees steal on average 5.5 times more than shoplifters ($715 vs
$129). Employee fraud is also on the uptick, whether its check tampering, not
recording sales in order to skim, or manipulating expense reimbursements.
Ethical alert: The FBI recently reported that employee theft is the fasting growing
crime in the U.S. today.

4. Lying to employees

The fastest way to lose the trust of your employees is to lie to them, yet
employers do it all the time. One of out every five employees report that their
manager or supervisor has lied to them within the past year.

5. Violating company internet policies

Cyberslackers. Cyberloafers. These are terms used to identify people who surf
the Web when they should be working. It's a huge, multi-billion-dollar problem
for companies. A survey conducted recently by Salary.com found that everyday at
least 64 percent of employees visit websites that have nothing to do with their
work. Who would have thought that checking your Facebook page is becoming
an ethical issue?

E. How can companies become more ethical? Companies can become more ethical by staying
away from false or misleading advertising, deceptive personal selling tactics, and product
labeling. In other words, it is crucial for companies to stay truthful in product safety and quality.
F. What is a conict of interest situation? Advancing personal interest over others’ interests, as
well as bribing are two unique forms of conflict of interests because one benefits at the expense
of society. G. What does social responsibility mean? Social responsibility means that an
individual or organization have the obligation to act for the benefit of society at large. To further
explain, social responsibility can be defined as maintaining a balance between profit-making
activities and activities that benefit society

How to Write a Code of Ethics for Business: What is a Code of Ethics?

A code of ethics is a collection of principles and practices that a business believes in and aims
to live by. A code of business ethics usually doesn't stand alone, it works in conjunction with a
company's mission statement and more specific policies about conduct to give employees,
partners, vendors, and outsiders an idea of what the company stands for and how it's members
should conduct themselves.
The key in distinguishing a code of ethics from these other documents is to hit the right level of
specificity. It should address both the particular nuances of the company's industry as well as its
broader goals for social responsibility and should be concrete enough to serve as a guide for
employees in a quandary without laying out rules for every situation that could arise.

Policies can include issues such as a company's commitment to not work with vendors who use
child labor or are environmentally harmful, not discriminating in their hiring, and not taking
bribes. For example, recently when Ikea was opening their first location in Russia, they were
approached by local bigwigs requesting a kickback to turn their utilities on just before the store's
grand opening. It would have been easy to cave to the pressure of their responsibility to
stakeholders, creditors, and employees but Ikea has a firm no bribes policy. To get around the
problem, they leased power generators to get their store lit up in time for its kickoff.

"A code of ethics is about corporate culture," says Michael Connor, the editor and publisher of
the online magazine Business Ethics. "[Many small- to medium-sized businesses] have a code of
ethics; it's probably not written down in many cases but it wouldn't hurt if it was."

Connor believes that there's no such thing as a business being too small to benefit from a code
of ethics. Having a code is "often viewed as a luxury or something that is an added cost," he
says. "The reality these days is that the business that does not have a code of ethics subjects
itself to a much greater risk in its day-to-day operations and if there is an unfortunate incident,
they expose themselves to much greater risk [from] regulatory and prosecutorial authorities."
How to Write a Code of Ethics for Business: Setting Priorities

The first step a company has to take in laying out a code of ethics is deciding what values are
important to it and what lines it won't cross. When Marianne Jennings is consulting with
companies implementing a code of ethics, she probes a company's leadership to discover their
boundaries. The professor at Arizona State University's business school and author of The Seven
Signs of Ethical Collapse, asks her clients, "What are the things you would never do at this
company to get a client, to keep a client, to make sure you met your numbers for the quarter?'
Just thinking through that sets the framework for the code."

Clarifying these details can be especially helpful as the company grows. "As they grow, they're
going to be hiring more people that are probably dissimilar to their value structure and [putting]
those rules and those procedures in place will help your company grow in the way you want it to
grow," says John Fraedrich, a professor of business ethics at Southern Illinois University.

Having HR educate incoming employees about the code of ethics and the company's culture is
especially important in the age of increasingly rapid job turnover. Connor says that sometimes
employees "are hired and fired at such a pace that people don't know what the corporate culture
is."
How to Write a Code of Ethics for Business: Getting Input

A common mistake that companies make when drafting a code of ethics is not to consult
employees. "Often the code of ethics comes from the top, and the company is really not aware
of the kinds of things the employees are facing," Jennings says. In these cases "the code of
ethics comes out and it's instantly dismissed as a sham because the employees really know
what's happening and it's not covered [in the code] or it's addressed in a different way."

Even if you think you're in tune with the daily trials and tribulations of your staff, you should
solicit broader participation in the crafting of the code. Employees need to have a say in it but
they also need to know why the code is important and why it ultimately contains the tenets that it
does. Jennings suggests soliciting anonymous input from your staff on a situation they were in
during the past year that made them uncomfortable as a good starting point.