PUTTING TEETH IN

CORPORATE ETHICS
CODES
GSM5131: BUSINESS LAW & ETHICS

Group 3:

ANNA KARTINI AHMAD LOTFI

PBS1411482

LIM YU WEY PBS1411614

MAZLINA DOL HAMLI

PBS1411502

NOR HAFIZAH IBRAHIM PBS1411485

SYARIFAH ATIYAH BINTI SYED HISHAM PBS1411628

INTRODUCTION
Clark Consulting
Had a code of ethics for years but never really
apply it
The CEO later revised, redistributed to all
employees
A senior consultant was dismissed because not
compelling with Companys Code of Ethics
rule no.1 : clients come first

INTRODUCTION
What is ethics?
Common definition rules in distinguishing between
right or wrong
norms of conduct that distinguish
between acceptable or
unacceptable conduct
David B. Resnik

legal but unethical

Similarly an action can be illegal but
ethical
An action can be

CORPORATE CODE OF ETHICS

o Guidelines in which describing desirable behavior
and prohibiting misbehave of employees
o It clarify the values and norms the company wish
to uphold
o Formalized public statements of corporate
principles and rules of conduct that govern
interorganizational and intra organisational
practices and relations
o Most successful codes have both administrative
and criminal penalties

ISSUES

Corporate Scandals
Corporate scandals happen because of the unethical behavior of people
acting within or on behalf company
Understanding on the code of ethics doesnt stop people from conducting
any wrongdoing action
Due to the scandals, more acts and regulation has been imposed such as:
1. Sarbanes-Oxley 2002
2. New listing standards by NYSE
3. Transparent compliance to PLC in Malaysia (RMK9)

COUNTLESS RULES CAN BE IMPOSED BUT

CAN THESE RULES CHANGE THE ETHICAL
BEHAVIOR OF A PERSON.????????

LIST OF CORPORATE SCANDALS

SCANDALS

YEAR

ENRON
WORLDCOM
ARTHUR ANDERSEN
HEALTHSOUTH
TYCO LTD
AMERICAN INSURANCE
GROUP
LEHMAN BROTHERS
ROYAL BANK OF SCOTLAND
GROUP
SAYTAM
1MDB

2001
2001
2002
2003
2005
2005
2008
2008
2009
2015

 Check and balance system

o Documentation of COE
o Guidelines for employees
o Detailed and specific

Tech
Backup

Sanctions
Sections
Companies
Trying To
Strengthen
Their Ethic
Codes

Straight from the top

Monitoring, Auditing
,Reporting

Top
Manageme
nt

Signature,
Consent And
Agreement
Requirement

Training

Statement to be visible

Providing guidance for senior managers

Continuous Controls Monitoring Flag

Employees needs to
read and sign the

Communication
and Assimilation: Goals
Role
Erecting a Robust
and Self Sustaining
Ethics
Infrastructure:1. assuring employee
compliance
2. staff training
3. evaluations
of
compliance systems
4. appropriate funding
and staffing
5. effective protections
to Whistleblower
6. establish
independent
"hot
lines" or "help lines"

What more
can a
company do
to make sure
its code of
ethics is
followed?

Integrity Continuity
Management

Synthesizing
Ethical Conduct
into Corporate
Systems:1. Provide a
written pledge
i.e: Credo or values
2. Consistent
guidance
3. simple and nonconvoluted
systems to
measure the
effectiveness of
ethics initiative
4. Reward &
punishment

Proactive Integrity Continuity Management

Tactics
Set and maintain integrity goals at the strategic level.
Demonstrate top management commitment to integrity.
Monitor and audit conduct (formal and informal).
Tie performance rewards system to integrity conduct.
Distribute written rules, policies, and procedures.
Reinforce written rules, policies, and procedures.
Train employees to recognize and make ethical
decisions.
Establish Corporate Ethics Officer/Team.
Designate Ethical Compliance Manager.
Install surveillance and evaluative processes and foster
collaborative participation.
Maintain whistle-blower channels and policies.
Ensure supportive climate for ethical conduct.
Reward acts of integrity and ethical decisions.
Abide by and enforce disciplinary policy consistently and
fairly.
Offer Organizational Transformation (OT) training and
development programs.
Immediately respond to misconduct; follow procedures
consistently and fairly.

Integrity Continuity Analysis

(Murphy,2011)
57% of companies have never
incorporated integrity continuity
planning at the strategic executive or
board level.
54% of companies do not have
employee ethics compliance
measurement among their performance
appraisal criteria.
56% of companies have never
conducted an ethical behavior
compliance audit.
23% of companies have never
engaged senior management in
ethics/compliance training efforts.

Improving
Leadership Behavior
to
Boost
Up
Employee
Commitment:1) Inspire
and
Motivate Others
2) Driving for Results
3) Strategic
Perspective
4) Collaboration
5) Walk the Talk
6) Trust
7) Develops
and
Supports Others
8) Building
Relationships
9) Courage

What more
can a
company do
to make sure
its code of
ethics is
followed?

Back to Basics:1) Ethical teachings

of most religions
are compatible
with each other
2) To embark a
spiritual programs
3) close the social
gap, reduce the
greed, and to unite
the entire
organization
4) to understand their
function and
responsibility
towards their
Creator

CONCLUSION

There is a bridging gap between the governance of statutory provisions

and the extent to which these provisions curb corporate misconducts or
wrongdoings.

A radical transition and transposition of ethics is momentous in the

realm of contending, circumventing and addressing the rifts of existing
statutory provisions.

END