CORPORATE GOVERNANCE, BUSINESS ETHICS, RISK MANAGEMENT AND

INTERNAL CONTROL

Midterm Examination

1. What is the importance of business ethics?

In the field of business, having a pleasing and decent appearance is not enough;
it also demands proper moral values that would encourage exemplary behavior of top
and all other level of management. Accordingly, business ethics is necessary, and thus,
important because it can increase employee performance, job satisfaction,
organizational commitment, trust, and organizational citizenship behaviors and also, its
absence may result to a negative view toward the entire field of business.

2. Give some examples of business ethics issues.

Ethical issues in business encompass a wide array of areas within an

organization’s ethical standards. Accordingly, this may include, but not limited to: (1)
Harassment and Discrimination in the Workplace; (2) Health and Safety in the
Workplace; (3) Whistleblowing or Social Media Rants; (4) Ethics in Accounting
Practices; (5) Nondisclosure and Corporate Espionage; and (6) Technology and Privacy
Practices.

3. Whose responsibility is business ethics?

Managers and supervisors has the responsibility to address immediately and

sincerely any questions and concerns of their employees about business conduct
issues and seek further assistance if necessary; and manifest exemplary behavior that
will guide and inspire other employees. And in case problems arise, they must consult
the next level of management. Hence, senior management has the additional
responsibility of serving as role models for these standards by visibly demonstrating
support and by regularly encouraging managers’ adherence to the standards.
 4. What makes the Code of Ethics effective for a company?

It is said that Code of Ethics is like a map, offering guidance on what route to
take when there is a choice to make. It ensures companies that the corporate ethics
policy is embedded in their culture, encourages ethical practices, and sets out the
expectations that the company has for how employees should behave in any given
situation. Thus, a code of business ethics helps companies to reflect how they operate
their business model, how they relates to the communities where they operates their
business, and how they express the corporate values they considers important.

5. What sustains the Code of Ethics of a company?

There could still be a gap between policy and practice in case the Code of Ethics,
even if such monitors excellent practice, is not adequately introduced and conveyed to
everyone. In plain language, giving a booklet and anticipate that it would be sufficient for
them to comprehend and follow its contents may just result to “ethical lapses”. Hence,
what could sustain the Code of Ethics of a company are: agreement on explicit core
values, a relevant and ‘user friendly’ code of ethics, means for employees to raise
issues without fear of retaliation, employee engagement (consultation and feedback),
and consistent communication and exemplary behavior from both top and other levels
of management.