Corporate Codes of Ethics – lies or true intentions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Done by: Sakezhanov Z.

Master’s degree, finance 2 y.

 

 

 

 

 

 

 

Almaty 2013

Corporate Codes of Ethics – lies or true intentions

 

Can in every company be a Corporate Code of Ethics? It has to be and I will try to answer it more accessible. In each company there has to be Corporate Codes and approximately they are the same in every company. Each company tries to reach good results among workers of the company making such Codes of ethics. The Board of Directors writes a letter about missions of the company, normative and principles of ethics. Code of ethics reflects the worker’s relations to colleagues, responsibility to his work and true intentions to the surrounding.  

 

Of course, it depends on you whether you want truly show your intentions to work hard and move in a carrier ladder or lying to everybody showing that you don’t want to do anything at all. Sometimes you don’t have choice if a government decides to check your work or work of your department. In this case if you don’t interact it will lead to not following the law.

 

If we come to corporate codes, it was based in order to make in company a peaceful atmosphere among shareholders, owners, directors and management. It became necessary element for companies in 21^st century. It helps to adequately meet their objectives and guaranties stability in company. Ethics within the company require that shareholders and owners become guarantors of compliance in respect of obligations for directors and management. 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.  If you are able to understand and implement values and ethics in everyday practices, you will encourage one’s success in personal and professional careers. Ethics is a concept of one’s actions, which derives from principals of an individual doing what is right not wrong. Ethics and values are fundamental, but they are also essential in day-to-day- life as well as our work environment. They are the principals which helps us determine our actions and conduct in professional settings and the building blocks for setting goals for us to work towards. Like a giant puzzle the pieces come together over time, and when complete defines who we are and what we believe. 

 

Even though this Code has been created with the intention of being applicable in general to all companies, it should also be understood within a general and basic framework subject to adaptation to the specific circumstances of each business; thereby ensuring that it contemplates application of the principles of ethics and sustainable development in accordance with the specific activity of the company involved.

 

Ideally, the Board of Directors is responsible for drawing up the Code of Ethics for the company and the General Shareholders’  Meeting for approving that Code. Should, however, the Board also proceed with approval, that decision must be ratified by the Shareholders’  Meeting. Employees individually are ultimately responsible for their compliance with the Code.

Every manager will also be responsible for administering the Code as it applies to Employees and operations within each manager’s area of supervision.

 

The concept “corporate code of conduct”  refers to companies’ policy statements that define ethical standards for their conduct. There is a great variance in the ways these statements are drafted. Corporate codes of conduct are completely voluntary. They can take a number of formats and address any issue – workplace issues and workers’ rights being just one possible category. Also their implementation depends totally on the company concerned.

 

Company has to warn employees that there must not be any conflict of interests. Employees must avoid any interest that conflicts with the interests of the Company or that could reasonably be determined to harm the Company’s reputation, and report any actual or potential conflict of interest immediately to their manager or a Board member and adhere to instructions concerning how to address such conflict of interest. A conflict of interest exists if actions by any Employee are, or could reasonably appear to be, influenced directly or indirectly by personal considerations, duties owed to persons or entities other than the Company, or by actual or potential personal benefit or gain. Employees owe a duty to advance the legitimate interests of the Company when the opportunities to do so arise. Employees may not take for themselves personally opportunities that are discovered through the use of corporate property, information or position.

 

It is important that Employees protect the confidentiality of Company information.

Employees may have access to proprietary and confidential information concerning any Company’s business, clients and suppliers. Confidential information includes such items as non-public information concerning Company’s business, financial results and prospects and potential corporate transactions. Employees are required to keep such information confidential during employment as well as thereafter, and not to use, disclose, or communicate that confidential information other than in the course of employment. To ensure the confidentiality of any personal information collected and to comply with applicable laws, any Employee in possession of non-public, personal information about  Company’s customers, potential customers, or Employees, must maintain the highest degree of confidentiality and must not disclose any personal information unless authorization is obtained.

 

A corporate code of ethics cannot prevent unethical behavior, but it can have an impact on employee decisions. If a worker knows that a certain course of action violates his company's ethical code, he is likely to give more thought to whether or not he should pursue that course of action. In general, an employee probably would not choose to violate his company's code of ethics unless it resulted in some significant advantage over other courses of action, because it would not be worth the risk of potential reprimand.

 

While codes of ethics can potentially influence behavior, inadequate employee knowledge can limit their effectiveness. A code of ethics must be visible to workers for it to provide an effective tool for guiding decisions. If workers are not aware of a code of ethics, don't know where to find it or do not understand it, their behavior cannot be influenced by it. Employees who are required to read a company's code of conduct during training and have ready access to it are more likely to be influenced by it.

 

Another factor that can affect the extent to which code of conduct influences behavior is whether workers choose to report unethical behavior of coworkers and whether violations have consequences. Even if most workers follow a code of conduct, they might not be willing to accuse coworkers of unethical behavior. Similarly, if violations have no consequences, employees may not feel obligated to follow a code of conduct to the letter.   

 

The main argument against the establishment of corporate codes of ethics is the discrepancy that exists between what managers expect to achieve and what is actually achieved. Some view that having broader ethical codes cannot successfully regulate the behavior of employees.   

If we come to code of ethics, it is a formal document rather than merely an "environment," an "understanding," a consensus, "unwritten rule," or just an aspect of "corporate culture." It is at minimum a published document. In many organizations employees are also required to sign a statement to the effect that they have read and understood it. Variations on this theme exist. In very large corporations or corporations reacting to recent scandals, sometimes only corporate officers or only financial officers are required to sign. In other cases multiple codes of ethics may exist tailor-made to such functions as purchasing, sales, accounting, etc.

In the end I would like to make an example, ethics involves learning what is right or wrong, and then doing the right thing - but "the right thing" is not nearly as straightforward as conveyed in a great deal of business ethics literature. Most ethical dilemmas in the workplace are not simply a matter of “Should Bob steal from Jack?” or “Should Jack lie to his boss?”

So it is your concern what should you do even if you learnt by heart the Codes of Ethic. It depends on your honesty and education what is right to do and what is wrong to do. Of course, it also depends on your mentality, because if you are a native of post communist country it is better for you to give a bribe rather than doing it the right way. Values which guide how we ought to behave are considered moral values, for example values such as respect, honesty, fairness, responsibility.  Statements around how these values are applied are sometimes called moral or ethical principles. You have to know that many people react that business ethics, with its continuing attention to "doing the right thing," only asserts the obvious ("be good," "don't lie," etc.), and so these people don't take business ethics seriously. For many of us, these principles of the obvious can go right out the door during times of stress. Consequently, business ethics can be strong preventative medicine.