Business Ethics: Theories of Corporate Governance, Benefits of Building Ethical Companies, and Ways to

Prevent Fraud and Promote Ethics in the Workplace

* Introduction

Good afternoon everyone. It’s our pleasure to welcome you to our presentation. There are four
members in our team. We are …. We are going to talk about the topic Business Ethics: Theories of
Corporate Governance, Benefits of Building Ethical Companies, and Ways to Prevent Fraud and Promote
Ethics in the Workplace. There are four parts in our presentation. First, we’ll highlight the definition of
business ethics. Then we’ll move on to mention theories of corporate governance. After that, there are
the benefits of building ethical companies. Towards the end, we are going to discuss ways to prevent
fraud and promote ethics in the workplace.

*Main body

- First off, I’d like to start off by giving the definition of business ethics. Business ethics refers to a set
of moral principles and values that guide the behavior and conduct of individuals and organizations in
the business world. It involves ethical decision making and responsibility among owners, managers,
employees, and other stakeholders of the organization. Business ethics encompasses a range of issues,
including honesty, responsibility, fairness, social responsibility, and accountability. It is important for
businesses to maintain ethical standards in their practices to ensure long-term success, build trust and
credibility among stakeholders, and avoid legal and ethical violations.

- On to my second point, which is the theory of corporate governance.

Corporate governance refers to the systems, processes, and principles that regulate a company's
behavior towards its stakeholders. Various theories of corporate governance have been developed to
guide organizations in ensuring accountability, transparency, and fairness. These theories include agency
theory, stakeholder theory, and shareholder theory.

Agency theory suggests that companies are run by managers who act as agents for the owners
(shareholders). As such, the managers have a fiduciary duty to act in the best interests of the
shareholders and maximize their wealth. However, this theory also recognizes that managers may have
their interests, which may conflict with those of the shareholders. Therefore, good corporate governance
requires aligning the interests of the managers with those of the shareholders to prevent agency
problems.

Stakeholder theory, on the other hand, contends that a company's obligations extend beyond
shareholders to include other stakeholders, such as employees, customers, suppliers, and the
environment. Under this theory, a company is expected to consider all stakeholders' interests when
making decisions, as they all have a stake in the company's success.
Shareholder theory prioritizes the interests of shareholders and posits that a company's primary
objective is to maximize shareholder value. Advocates of this theory argue that maximizing shareholder
value leads to efficient allocation of resources and drives economic growth.

- The next point I want to talk about is the benefits of building ethical companies.

Companies that prioritize ethics tend to enjoy numerous benefits, both tangible and intangible. These
benefits include:

1. Improved reputation and brand image

A company that is known for ethical behavior can attract customers who value social responsibility and
ethical conduct. Moreover, such a company who adhere to ethics can also avoid legal and reputational
damage caused by unethical actions.

2. Increased stakeholder trust and loyalty

When a company operates ethically, its stakeholders, including employees, customers, suppliers, and
investors, tend to trust and remain loyal to it. It also promotes long-term relationships and future
opportunities for growth.

3. Reduced legal risks

Ethical companies are more likely to comply with regulatory requirements and avoid legal risks. This
includes fines, penalties or other legal liabilities that could lead to harm to an organization.

4. Improved employee morale and productivity

Employees who work for ethical companies tend to be more committed, motivated, and productive. This
is because working for such companies fosters a sense of pride and purpose among employees.

5. Opportunities for innovation and competitive advantage

Companies that prioritize ethics are more likely to identify and pursue innovative opportunities that align
with their ethical values. This can lead to competitive advantage in the market.
- That brings me to my final point: ways to prevent fraud and promote ethics in the workplace.

Preventing fraud and promoting ethics in the workplace requires a concerted effort and a commitment
from the management and employees at all levels. The following are some ways to achieve this:

1. Developing a code of ethics

A code of ethics is a set of principles that outlines the organization's values, ethical standards expected
from employees, and the consequences of ethical misconduct. It provides a clear benchmark to guide
behavior and serves as a reference point for decision-making.

2. Ethical Leadership

Leaders in an organization play a pivotal role in promoting ethical behavior. They must lead by example
and champion ethical values. As such, the top-level management should cultivate ethical behavior and
communicate to employees the importance of doing the right thing.

3. Educating Employees

Employees should be educated on ethical principles, policies, and procedures. They should be trained to
recognize and deal with ethical dilemmas. This can be achieved through regular training sessions,
seminars and workshops.

4. Preventive Controls

Preventive controls should be designed to deter fraud and unethical behavior. For example, access
controls, separation of duties, and whistle-blower policies can create checks and balances in the internal
controls of an organization.

5. Periodic Reviews

Periodic reviews and audits should be undertaken to ensure that internal controls are working as
intended and to detect fraudulent activities. Regular reviews can, for instance, prevent financial losses
and avoid reputational damage.

*Conclusion

In conclusion, business ethics plays a crucial role in the success of an organization. It involves adhering to
ethical principles, promoting transparency, accountability, and fairness in the organization's practices.
Theories of corporate governance offer guidance on ethical decision making, with different approaches
depending on the company's goals and values. Moreover, the benefits of building ethical companies
extend beyond enhancing reputation to include increased stakeholder trust and loyalty, reduced legal
risks, and opportunities for innovation. Finally, preventing fraud and promoting ethics can be achieved
through developing a code of ethics, ethical leadership, educating employees, setting up preventative
controls, and periodic reviews. Embracing these strategies can enable organizations to build a reputation
for integrity and ethical conduct.

That’s all I have to say. Thank you for listening our presentation. If you have any questions, please raise
your voice.