BUSINESS ETHICS

AND LAWS

LINK BETWEEN ETHICS AND

LAWS

Business Ethics has a close link with

laws as they are the embodiment of
general ethics for the society .It also
embraces personal ethics codes and in
a limit the ethical tenets from certain
religious faith groups when the firm is
owned by individuals having affiliation
with particular faith groups. Like-They
can prohibit alcohol/prohibit non
-vegetarian items in guest houses.

LAW ABIDANCE
It embraces two activity
dimensions of business
corporates ---i-Macro Activity
ii-Micro Activity

MACRO ACTIVITY
The Law that governs global activities of
the business enterprises. Like
Companies Act, Tax Laws, SEBI
Regulation, Negotiable Instruments Act.
These laws covers areas that impact
business investors and lay downs broad
guidelines for managing corporate
business affairs and activities as
demanded by the society.(applicable to
manufacturing and non manufacturing
firms both)

MICRO ACTIVITY
Laws that govern actual conducting of
business in the premises of the business.
Majorly applicable to firms in
manufacturing activities that have to
comply with legal requirements as
applicable to their activities. Environment
Protection Act ,Air Pollution Prevention
and Control Act ,Bio Medical Waste Act.
Micro Legal Controls are enforced by
shop floor managers.

SEVEN STEPS TO ENSURE LAW

ABIDANCE
i. Understanding Prevailing Work
Conditions
ii. Analyzing the prevailing
conditions with understanding
of governing knowledge and
technology and classifying
them according to their impact
range or potential.

iii. Carrying out a thorough study of

all applicable acts and laws and
identifying and extracting the rules
and understanding their
implications as relevant to the
premises
iv. Evaluating level of compliance to
legal requirements and identifying
activity areas where compliance is
not satisfactory .

v. Analyzing the reasons for non

satisfactory compliance.
vi. Re-equipping and redesigning the shop
floor to make good the gaps
vii. Carry out a thorough compliance audit
fine-tuning compliance requirement
followed by periodical surprise audits to
ensure that deviations do not creep into
activities.

ABSOLUTE ETHICAL SECURITY

The Global society believes that a strict
adherence to law would ensure a total
ethical
security for itself. But this is not the case. The
law can only provide a healthy or sound
base for operations .It is for firms to practice
them. There is something beyond the
reach of the law. Here only extraordinary
human qualities can play a significant role
to save the humanity

SARBANES OXLEY ACT

WHY THIS ACT?
Scandals of Enron and others shook
the US investors bitterly and govt.
passed this act-Company
Accounting Reforms and Investors
Protection Act also known as
Corporate and Auditing
Accountability and Responsibility
Act .

AIMS
The act was passed to exert
additional legal control on all public
companies and to ensure total
freedom from complexities of
administrators or duplicities of
their directors.
It laid emphasis on heavy
responsibilities of corporate boards
and provided penalties for
defaulters

Disclosure controls, improper

influence on conduct of audits,
disclosures in periodic reports,
assessment of internal
controls, penalties for
retaliation against
whilstleblower were few other
measures.