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Business Ethics

Environmental Management and Ethics in Management

Business Ethics


Ethics involves a discipline that examines good or bad practices within the context of a moral duty
Moral conduct is behavior that is right or wrong Business ethics include practices and behaviors that are good or bad
Environmental Management and Ethics in Management

Four Important Ethical Questions

What is? What ought to be? How to we get from what is to what ought to be? What is our motivation for acting ethically?

Environmental Management and Ethics in Management

3 Models of Management Ethics

1. Immoral ManagementA style devoid of ethical principles and active opposition to what is ethical. 2. Moral ManagementConforms to high standards of ethical behavior.
3. Amoral Management
1. Intentional - does not consider ethical factors 2. Unintentional - casual or careless about ethical considerations in business
Environmental Management and Ethics in Management

Three Approaches to Management Ethics

Environmental Management and Ethics in Management

Business Ethics: What Does It Really Mean?

Business Ethics:Today vs. Earlier Period
Societys Expectations of Business Ethics
Ethical Problem Actual Business Ethics

Ethical Problem



Early 2000s

Ethical Issues in Business

Employee-Employer Relations Employer-Employee Relations Company-Customer Relations Company-Shareholder Relations Company-Community/Public Interest

Environmental Management and Ethics in Management


Environmental Management and Ethics in Management

An internal system encompassing policies, processes and people, which serves the needs of shareholders and other stakeholders, by directing and controlling management activities with good business savvy, objectivity and integrity. Sound corporate governance is reliant on external marketplace commitment and legislation, plus a healthy board culture which safeguards policies and processes'. By: Gabrielle O'Donovan
Environmental Management and Ethics in Management

Corporate governance is the set of processes, customs, policies, laws and institutions affecting the way a corporation is directed, administered or controlled. Corporate governance also includes the relationships among the many stakeholders involved and the goals for which the corporation is governed. The principal stakeholders are the shareholders, management and the board of directors. Other stakeholders include customers, creditors (e.g., banks, bond holders), employees, suppliers, regulators, and the community at large.
Environmental Management and Ethics in Management

Corporate governance is a field in economics that investigates how to secure/motivate efficient management of corporations by the use of incentive mechanisms, such as contracts, organizational designs and legislation.

Corporate governance is a term that refers broadly to the rules, processes, or laws by which businesses are operated, regulated, and controlled.
Internal factors defined by the officers, stockholders or constitution of a corporation, as well as to external forces such as consumer groups, clients, and government regulations succeeded in attracting a good deal of public interest. the economic health of corporations and society.

Corporate governance deals with the ways in which suppliers of finance to corporations assure themselves of getting a return on their investment
Environmental Management and Ethics in Management

The Triple-Bottomline Impact


Business Impact



An Enterprises Triple Effect on Society

Sustainable Development Waste Control Equal Opportunities Education & Culture Community Regeneration

Emissions Business Impact Energy Use Product Life-cycle Product Value Wealth Generation Productive Employment Ethical Trading


Human Rights Employee Volunteers

Impact of Corporate Governance

strengthened economy, hence socioeconomic development Role of Institutional Investors Institutionalised Parties to corporate governance Regulatory body

Commonly accepted principles of corporate governance include

Rights and equitable treatment of shareholders: Organizations should respect the rights of shareholders and help shareholders to exercise those rights. They can help shareholders exercise their rights by effectively communicating information that is understandable and accessible and encouraging shareholders to participate in general meetings. Interests of other stakeholders: Organizations should recognize that they have legal and other obligations to all legitimate stakeholders. Role and responsibilities of the board: The board needs a range of skills and understanding to be able to deal with various business issues and have the ability to review and challenge management performance. It needs to be of sufficient size and have an appropriate level of commitment to fulfill its responsibilities and duties. There are issues about the appropriate mix of executive and non-executive directors. The key roles of chairperson and CEO should not be held by the same person.

Integrity and ethical behaviour: Ethical and responsible decision making is not only important for public relations, but it is also a necessary element in risk management and avoiding lawsuits. Organizations should develop a code of conduct for their directors and executives that promotes ethical and responsible decision making. It is important to understand, though, that reliance by a company on the integrity and ethics of individuals is bound to eventual failure. Because of this, many organizations establish Compliance and Ethics Programs to minimize the risk that the firm steps outside of ethical and legal boundaries. Disclosure and transparency: Organizations should clarify and make publicly known the roles and responsibilities of board and management to provide shareholders with a level of accountability. They should also implement procedures to independently verify and safeguard the integrity of the company's financial reporting. Disclosure of material matters concerning the organization should be timely and balanced to ensure that all investors have access to clear, factual information.

Issues involving corporate governance principles include: internal controls and the independence of the entity's auditors oversight and management of risk oversight of the preparation of the entity's financial statements review of the compensation arrangements for the chief executive officer and other senior executives the resources made available to directors in carrying out their duties the way in which individuals are nominated for positions on the board dividend policy

Internal corporate governance controls monitor activities and then take corrective action to accomplish organisational goals. Monitoring by the board of directors Balance of power Performance-based remuneration

External corporate governance controls encompass the controls external stakeholders exercise over the organisation. competition debt covenants demand for and assessment of performance information- financial statements government regulations managerial labour market media pressure takeovers

In recent years, corporate governance has received increased attention because of high-profile scandals involving abuse of corporate power and, in some cases, alleged criminal activity by corporate officers. An integral part of an effective corporate governance regime includes provisions for civil or criminal prosecution of individuals who conduct unethical or illegal acts in the name of the enterprise.


. Presentation by Asha(MBAHospital 07-09)