Subject Code: BAGOSBUSX

Subject Title: GOVERNANCE, BUSINESS ETHICS, RISK MANAGEMENT

AND INTERNAL CONTROL

Subject Description: This course is intended to build understanding of students on

fundamental concepts of corporate governance, risk management
process, and internal control system. At the end of course, students are
expected to be competent on these fundamental concepts in applying
to actual corporate setting and on how to evaluate and improve
financial and operational processes of organization’s risk management,
control, and governance.

No. of Units: 3

Class Schedule: Synchronous: MTh 09:00am – 11:00am; 11:00am – 01:00pm;

03:00pm-05:00pm

Course Learning Outcomes:

At the end of the course, the student must be able to:
1. Execute consolidation of simple financial statements.
2. Describe principles and characteristics of IFRS/IAS for consolidated financial statements.
3. Evaluate differences between IFRS/IAS and local GAAPs and apply intricate IFRS/IAS
requirements (e.g. IAS 12, IAS 21)
4. Apply acquired knowledge and skills to pass professional licensure / certifications and use
these skills for future job aspects.
5. Appraise ethical problems / issues in practical business and accounting situations and
recommended appropriate course action that adheres to the professional code of ethics.

About the Instructor:

She is a graduate of Bachelor of Science in Accountancy at Baliuag University batch 2014 with
honors (Cum Laude).
After passing the CPA Board Exam, she joined the accounting firm Punongbayan & Araullo, the
Philippine member firm of Grant Thornton International Ltd (GTIL), one of the world's leading
organizations of independently owned and managed accounting and consulting firms as an Audit
Associate.

She completed her Masters in Business Administration at Baliuag University in 2017. Until recently,
she is the Internal Auditor for Bela Star Distribution Systems Inc., one of the leading commodities
trading companies in North Central Luzon.

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-Ms. Fideliz Arca Vidal, CPA, MBA

Contact Information:
Facebook Account: FIDELIZ ARCA VIDAL
Email Address: fcvidal@nu-baliwag.edu.ph
Contact Number: 0917-125-7539 (globe)

Topics:

Module 3 PART 1: ETHICS

1. Business Ethics
2. Corporate Ethics

DISLAIMER: The information content provided in this course material is designed to provide helpful
information on the subjects discussed. Some information’s are compiled from different materials and
summarized from different books. Some information’s are based on contributors' perspective and
understanding. References are provided for informational purposes only and do not constitute
endorsement of websites or other sources. Readers should be aware that the websites/electronic
references listed in this course material may change. Hence, the contributors do not claim any
information presented in the materials and do not reflect their own work.

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 MODULE 3:
CODE OF ETHICS (Part 1)

I. Activity:

II. Learning Outcomes

At the end of the topic the students should be able to:
1. Explore conceptualizations of business ethics from an organizational perspective
2. Provide evidence that ethical value systems support business performance
3. Identify stakeholders’ roles in business ethics
4. Explore the role of corporate governance in structuring ethics in business
5. Define ethical issues in the context of organizational ethics
6. Examine ethical issues as they relate to the basic values of honesty, fairness, and
integrity
7. Delineate ethical issues in business

III. Content:

ETHICS can be defined broadly as a set of moral principles or values that govern the actions and
decisions of an individual or group. While personal ethics vary from individual to individual at any
point in time, most people within a society are able to agree about what is considered ethical and
unethical behavior. In fact, a society passes laws that define what its citizens consider to be the more
extreme forms of unethical behavior.

Figure 1. Ethics: The Three Central Concepts

Ethics is about with what is good or right in human interaction. It revolves around three central
concepts: ‘self’, ‘good’, and ‘other’. Ethical behavior results when one does not merely consider what
is good for oneself, but also considers what is good for others. It is important that each of these three
central concepts be included in a definition of ethics.

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A similar distortion occurs when the ‘self’ is excluded from the definition of ethics. Then the concern
is merely about what is good for others, without taking the interests of the self into consideration.
This pure form of altruism is probably unattainable, as it is almost impossible for someone to totally
exclude their own interests. It is also dangerous to neglect one’s own interests, as a sense of one’s
own well-being is a prerequisite for sustained interaction with other people. Alisdair MacIntyre
captured this insight well when he said: “Self-sacrifice is as much of vice [...] as selfishness”

Equally, the other cannot be excluded from the definition of ethics, as this will result in selfishness.
A concern merely for what is good for oneself runs counter to the very nature of ethics, which is to
ensure that the interests of both oneself and others are considered. Ethical behavior thus can be self-
interested, but not merely selfish. When you know your behavior may have negative consequences
for others, but care only about what is good for yourself, such action is selfish and unethical. If, on
the contrary, you seek to serve your own interests, whilst simultaneously caring about how the
interests of others will be affected, then your behavior is self-interested whilst also being ethical.

Characteristics and Values Associated with Ethical Behavior

1. Integrity
2. Honesty
3. Trustworthiness and Promise Keeping
4. Loyalty (Fidelity) and Confidentiality
5. Fairness and Openness
6. Caring for others
7. Respect for others
8. Responsible citizenship
9. Pursuit of excellence
10. Accountability

Reasons for Unethical Behavior

1. The person's ethical standards are different from those of society as a whole.
2. The person chooses to act selfishly.

CLASSICAL ETHICAL THEORIES

1. Virtue Theory

The Greek philosopher, Aristotle, is the figure most closely associated with virtue theory. His
theories are mainly to be found in a collection of his writings known as , which was the
Nicomachean Ethics compiled in the fourth century BC by his son Nichomachus. Aristotle’s
virtue theory begins with the assumption that morality is both necessary and vital for human
beings. It is impossible to live with human dignity without being a well-developed moral being.
Morality is not a luxury that one can choose to have or not to have. On the contrary, morality is a
precondition for living with human dignity. People who forsake morality are, according to
Aristotle, debased beings who have not fulfilled their human potential

The goal of humans is to achieve eudaimonia or a life well-lived through virtue.

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 Aristotle defines a virtue as an activity of the soul, implying a rational principle. Underlying this
definition of virtue is a very specific view of human nature. Aristotle assumes that there are two
distinguishable dimensions in human beings. The one is the rational dimension and the other the
irrational dimension. The rational dimension should always be the dominant dimension. A
person’s rational ability is the real mark of a human being: that which distinguishes us from
animals and other living creatures.

Table 1 Aristotle's Table of Virtues and Vices

Sphere of action or feeling Excess Mean Deficiency

Fear and confidence rashness courage cowardice
Pleasure and pain licentiousness temperance Insensibility
Getting and Spending prodigality liberality Illiberality
Anger irascibility patience lack of spirit
Self-expression boastfulness truthfulness understatement
Shame shyness modesty shameless

2. Deontological Theory

Deontological ethics insists that moral action requires conformity to rationally founded moral
principles. The classical representative of this theory is the German philosopher, Immanuel
Kant. His influential work on ethics is entitled, Fundamental Principles of the Metaphysic of
Ethics, first published in 1785.

Kant is convinced that our moral actions cannot be guided by our practical experience. He
insists that the moral ‘ought’ cannot be deduced from the practical ‘is’. In other words, it is
impossible to determine what people ought to do by studying what they are in fact doing.
People might be involved in severely corrupt practices, which cannot possibly offer moral
guidance. Moral guidance should be sought outside the sphere of practical experience. It can
only be found in the sphere of purely rational thinking.

Humans are prey to their dual nature in their moral actions. Kant is convinced that our natural
inclinations are too unstable and unpredictable to secure stable moral judgements. The only
source of stable and objective moral guidance is to be found in the rational ability of humans.
Practical experience, is also not a reliable source for moral guidance. So, the only source of
moral guidance is our rationality outside of, or prior to, practical experience.

Although he regards pure reason as the only sufficient source of moral guidance, he
nevertheless believed that something else was needed for consistent moral behavior. That
something else is a ‘good will’. The human will is of course influenced by both our natural
and rational dimensions. It is for this reason that Kant referred not merely to the human will,
but explicitly to the good will. The human will can be corrupted if it caves in to the demands
of our natural inclinations. Such a corrupted will can never secure consistent moral action. It
may be able to do so at times, but it can never maintain consistent moral behavior over time.
Consistent moral behavior can only be achieved by the good will. The good will is the will

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 that obeys the universal moral law. And our rational ability allows us to cultivate such a
goodwill. When we gain rational insight into the universal moral law, our will respects the
evident moral authority of this universal law and obeys it from a sense of duty.

A good will can therefore be defined as the will that obeys the universal moral law from a
sense of duty. It translates the universal moral law into practical resolutions to act in a specific
way. For Kant, doing the right thing out of a sense of duty to the universal moral law is the
hallmark of moral behavior.

3. Utilitarian Theory

The utilitarian moral theory claims that the morality of actions should be judged by their
consequences. The classical representative of this theory is John Stuart Mill, whose influential
book, Utilitarianism, was first published in 1863.

Mill is convinced that actions are good when they contribute towards fulfilling the ultimate
goal of human beings. This ultimate goal of human life he defines as happiness. Therefore an
action should be considered good when it results in happiness for the majority of those
affected by the specific action.

The practical implication of this Greatest Happiness Principle is that whenever we are in
moral doubt, we should merely calculate which of our alternatives for action would result in
the greatest amount of happiness for the greatest number of people. The option that promises
to produce the most happiness and the least pain for the greatest number of people affected
by our decision should be regarded as the most morally worthy course of action. This
seemingly very simple moral theory is much more complicated than it initially appears to be.
This becomes clear when we consider Mill’s defense of his conviction that happiness is the
ultimate desire of all human beings.

Utilitarianism requires that one should act for the sake of the general good, even if it runs
counter to one’s own happiness.

CATEGORIES OF ETHICAL PRINCIPLES

Principles of Personal Ethics include among others

 Basic justice, fairness
 Respect for the right of others
 Concern for the right of others
 Concern for the well-being on welfare of others
 Benevolence, trustworthiness, honesty
 Compliance with the law

Professional Ethics include among others

 Integrity, impartiality, objectivity
 Professional competence

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  Confidentiality
 Professional behavior
 Avoidance of potential or apparent conflict of interest

Business Ethics include among others

 Fair competition
 Global as well as domestic justice
 Social responsibility.
 Concern for environment

CODE OF GOOD GOVERNANCE FOR THE PROFESSION IN THE PHILIPPINES

Code of Good Governance for the Profession in the Philippines (E.O.No.220, June 23, 2003)

General Principle of Professional Conduct

Professionals are required not only to have an ethical commitment, a personal resolve to act
ethically, but also have both ethical awareness and ethical competency. Ethical awareness refers to
the ability to discern between right and wrong, while ethical competency pertains to the ability to
engage in sound moral reasoning and consider carefully the implications of alternative actions.

Specific Principle of Professional Conduct

1. Service to Others
2. Integrity and Objectivity
3. Professional Competence
4. Solidarity and Teamwork
5. Social and Civic Responsibility
6. Global Competitiveness
7. Equality of All Professions

BUSINESS ETHICS

BUSINESS ETHICS refers to standards of moral conduct, behavior and judgment in business. It
involves making the moral and right decisions while engaging in such business activities as
manufacturing and selling a product and providing a service to customers. Business ethics is an area
of corporate responsibility where businesses are legally bound and socially obligated to conduct
business in an ethical manner.

In this regard it has become commonplace in business ethics to distinguish three dimensions of
business as organization and as activity, viz. Economic Ethics, Corporate Responsibility, and
Organizational Ethics.

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  Economic ethics: Business organizations and business activity always occur within an
economic system or a wider socio-political framework. This economic framework is
determined at national level by political decisions, laws and regulations as well as social
norms that shape the contours of the economic playing field and the rules that govern business
organization’s and business activities. When economic activity transcends national
boundaries, international trade agreements and other international norms and conventions also
come into play. The macroeconomic framework determines to a large extent what freedoms
and responsibilities business organizations will have and also which economic priorities will
be pursued.

 Corporate responsibility: Businesses as organizations inevitably find themselves in a

network of relationships within the societies in which they operate. These relationships
include interactions with a wide range of parties such as the state, civil society, competitors,
suppliers, customers, employees and the media. It is typical of relationships that they bestow
both benefits and responsibilities on the parties involved in a relationship. The corporate
responsibility dimension of business ethics studies the ethical (or social) responsibilities of
business organizations towards the societies in which they operate as well

 Organizational ethics: Business organizations develop their own structures, systems and
standards that direct and control their business activities. These structures, systems and
standards provide the parameters within which internal stakeholders (such as employees) and
external stakeholders (such as suppliers, clients and business partners) need to operate.
Organizational ethics studies both the ethics of business activity and of the structures, systems
and standards of business organizations. Although the structures, systems and standards
imposed by business organizations constrains what employees, suppliers, contractors and
other stakeholders can do, they never totally constrain the freedom and responsibility of these
individuals. To the contrary, individuals always retain some freedom to act with initiative and
discretion.

Business ethics is based on the personal values and standards of each person engaged in business.

PURPOSES OF BUSINESS ETHICS

Main Purpose : To help business and would-be business to determine what business
practices are right and what are wrong.

Special Purpose :

1. To make businessmen realize that they cannot employ double standards to the actions of other
people and to their own actions.

2. To show businessmen that common practices which they have thought to be right because
they see other businessmen doing it, are really wrong.

3. To serve as a standard or ideal upon which business conduct should be based.

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SCOPE AND IMPACT OF BUSINESS ETHICS

Generally, actions that are not forbidden by law are ethical. In some cases, however, what is
legal (not forbidden by law) may be unethical. Business ethics therefore covers even acts that may be
legal but which are wrong because they violate ethical principles.

Business ethics is based on the personal values and standards of each person engaged in
business. Since individual values differ, what is ethical or unethical in making profit also varies from
person to person. And here lies the problem. There is still no uniform standards of right and wrong
from which all business may base their actions.

a. Economic Impact

A business has an economic impact on society through the wages it pays to its employees, the
materials that it buys from their suppliers and the prices it charges its customers. It would
have a positive social impact on its employees if they are paid fair living wages and benefits.
It will have a positive effect on its suppliers that they paid fairly and on time for their supplies.
The effect on its customers is positive if the business gives them good value for the price they
pay for the products and services.

b. Social Impact

The social impact of corporate governance contributes to the ethical climate of society. If
businesses offer bribes to secure work or other benefits, engage in accounting fraud or breach
regulatory and legal limitations on their operations, the ethics of society suffer. In addition to
a deteriorating ethical environment, such as corruption may unfairly raise the price of goods
for consumers or the quality of the product or service compromised.

c. Environment Impact

Environmental protection is a key area of business influence on society. Businesses that

implement good environmental policies to use energy more efficiently, reduce waste and in
general lighten their environmental footprint can reduce their internal costs and promote a
positive image of their company. The environmental initiatives of a business leader often force
competitors to take similar action for an increased beneficial effect on the environment.

d. Impact on Business Managers

The concepts and principles for the ethical conduct in business are relegated to the managers
of the business enterprise. Thus, although the manager is expected to act in the best interest
of the business, he cannot be expected to act in a manner that is contrary to the law or to his
conscience.

COMMON UNETHICAL PRACTICES OF BUSINESS ESTABLISHMENTS

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Misrepresentation is any statement by words or other conduct that, under the circumstances, amounts
to an assertion that is false or erroneous. Misrepresentation may be classified into two types: direct
misrepresentation and indirect misrepresentation.

Direct Misrepresentation is characterized by actively misrepresenting about the product or

customers. This includes:

a. Deceptive Packaging
b. Misbranding or Mislabeling
c. False or Misleading Advertising
d. Adulteration
e. Weight understatement or Short weighing
f. Measurement understatement or Short measurement
g. Quantity understatement or Short numbering

Indirect Misrepresentation is characterized by omitting adverse or unfavorable information

about the product or service. Among the most common practices involving indirect
misrepresentations are caveat emptor, deliberate withholding of information and business
ignorance.

a. Caveat emptor is a practice very common among salesmen. Translated, caveat

emptor means "let the buyer beware". Under this concept, the seller is not obligated
to reveal any defect in the product or service he is selling It is responsibility of the
customer to determine for himself the defects of the product.

b. Deliberate Withholding of Information. Following the argument that caveat

emptor is unethical, the deliberate withholding of significant information in a
business transaction, is also unethical. No business transaction is fair where one of
the parties does not exactly know what he is giving away or receiving in return.

c. Passive deception. Direct misrepresentation gives business a bad name while

indirect misrepresentation or passive deception is not as obvious, it nonetheless
contributes to the impression that businessmen are liars and are out to make a fast
buck. Business ignorance is passive deception because the businessman is unable
to provide the customer with the complete information that the latter needs to make
a fair decision.

d. Over persuasion. Persuasion is the process of appealing to the emotions of a

prospective customer and urging him to buy an item of merchandise he needs.
Persuasion is legitimate and necessary in the selling of goods if it is done in the
interest of a buyer such as persuading him to get a hospitalization insurance policy.
However, persuasion used for the sole benefit of selling a product without
considering the interest of the buyer is not ethical.

CORPORATE ETHICS

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Unethical Practices of Corporate Management

Practices of corporate management that involve ethical considerations may be classified into
two: practices of the Board of Directors and practices of executive officers. In many cases, the
practices may apply to both categories of corporate management and the only dividing line is in the
financial magnitude and implications of a particular corporate management practice.

Some Unethical Practices of the Board of Directors

1. Plain Graft

Some of the Board of Directors help themselves to the earnings that otherwise would go
other stockholders. This is done by voting for themselves and the executive officers huge
per diems, large salaries, big bonuses that do not commensurate to the value of their
services. They can also reduce the earnings going to the other shareholders by authorizing
purchases of goods and services for the company's use at a price higher than normal, in
consideration of a certain percentage of the purchase value or commission accruing to
them.

2. Interlocking Directorship

Interlocking directorship is often practiced by a person who holds directorial positions in

two or more corporation that do business with each other. This practice may involve
conflict of interest and can result to disloyal selling. Disloyal selling happens when this
person is compelled to decide which of the two corporation's interest should be protected
or upheld. Thus, whatever decisions the person makes, he betrays the trust reposed on him
by the shareholders of either of the two companies.

3. Negligence of Duty

A more common failure of the members of the Board of Directors than breach of trust is
neglect of duties when they fail to attend board meetings regularly. It is only in regular
attendance that they can protect the rights and interests of the shareholders and their non-
attendance of board meetings could result to betrayal of trust of the parties who elected
them to their positions.

4. Insider Trading

Insider trading involves trading in a public company's stock by someone who has non-
public material information about that stock for any reason. Insider trading can be either
illegal or legal depending on when the insider makes the trade. It is illegal when the
material information is still non-public, and this sort of insider trading comes with harsh
consequences. Illegal insider trading includes tipping others when you have any sort of
material non-public information.

Some Unethical Practices of Executive Officers and Lower Managers

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1. Claiming a vacation trip to be a business trip.

The President or a Vice President reports his personal vacation in Europe or in the United
States as a business trip so he can get reimbursement for his expenses including those of
his family's.

2. Having employees do work unrelated to the business.

Executive officers and lower managers ask company employees to do personal things for
them on company time such as having the company janitors water and mow their lawns,
having the maintenance men do house or appliance repairs for them, and having
subordinate employees secure a license or type letters pertaining to their other businesses.

3. Loose or ineffective controls.

Managers do not provide adequate controls to remove temptation and to prevent or

discourage employees from engaging in unethical practices. A manager has the moral
obligation to provide the proper control atmosphere so that his subordinates will not be
tempted to commit dishonest acts. A manager indirectly betrays the trust placed on him
by higher executive officers if the administrative and accounting controls in his office are
so weak or effective that employees are given the opportunity to misappropriate funds or
engage in petty thievery.

4. Unfair labor practices.

The labor code lists the following as unfair labor practices committed by an employer on
employees or a group of employees who have organized themselves into a union.

5. Making false claims about losses to free themselves from paying the compensation and
benefits provided by law.

There are employers who claim non-existent losses so they can be exempted from paying
the minimum wage and emergency-cost-of-living allowances required by law.

6. Making employees sign documents showing that they are receiving fully what they are
entitled to under law when in fact they are only receiving a fraction of what they are
supposed to get.

7. Sexual harassment. Work, education or training-related sexual harassment is committed

by an employer, employee, manager, supervisor, agent of the employer, teacher,
instructor, professor, coach, trainer or any other person who, having authority, influence
or moral ascendency over another in a work or training or education environment,
demands, requests or otherwise requires sexual favor from the other, regardless of whether
the demand, request or requirement for submission is accepted or not by the object.

Some Unethical Practices of Employees

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 1. Conflicts of Interest

Conflict of interest arises when an employee who is duty bound to protect and promote the
interests of his employer violates this obligation by getting himself into a situation where his
decision or actuation is influenced by what he can gain personally from it rather than what his
employer can gain from it.

2. Dishonesty

Business ethics is not just limited to business transactions with outside parties. It also
covers employee-employer relationship, especially with respect to an employee's honesty
as he carries out his assigned duties in the office.

ETHICAL DILEMMA

An ethical dilemma is a situation a person faces in which a decision must be made about the
appropriate behavior. A simple example of an ethical dilemma is finding a diamond ring, which
necessitates deciding whether to attempt to find the owner or to keep it.

SIX STEP APPROACH TO RESOLVING ETHICAL DILEMMAS

1. Obtain the relevant facts.

2. Identify the ethical issues from the facts.
3. Determine who is affected by the outcome of the dilemma and how each person or group is
affected.
4. Identify the alternatives available to the person who must resolve the dilemma.
5. Identify the likely consequences of each alternative. 6. Decide the appropriate action.

ADVOCACY AGAINST CORRUPTION

Corruption is the abuse of private and public office for personal gain. It includes acts of bribery,
embezzlement, nepotism, kickbacks and state capture.

Simply defined, corruption is receiving, asking for or giving any gratification to induce a person to
do a favor for private gain. This act covers not only public corruption involving misuse of public
power by elected politician or appointed civil servant but also private corruption between individuals
and businesses.

At the end of the day, those hurt most by corruption are the world's weakest and most vulnerable.

WHY AND HOW DOES A PERSON BECOME CORRUPT

o Career advancement
o Earning of more income

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 o Financial problems caused by illness, loss of property, etc.

Corruption leads to waste and adds to cost of doing business. It corrodes public trust, undermines
the rule of law, and delegitimize the state. It can also lead to a breakdown in social order, and creates
unfair competition.

CHARACTERISTICS OF CORRUPTION

1. Recipient and payers

2. Extortion
3. Lubricants of society
4. An ethical dilemma
5. Poverty alleviation
6. Culture
7. ‘Kindness among friends’

INITIATIVES TO IMPROVE BUSINESS ETHICS & REDUCE CORRUPTION

THE INTEGRITY INITIATIVE CAMPAIGN

The Integrity Initiative is a multisectoral campaign organized by the private sector in 2010,
that seeks to institutionalize integrity standards among various sectors of society-business,
government, judiciary, academe, youth, civil society, church and media. Led by the private
sector, the initiative aims to help in diminishing, if not fully eradicating, the vicious cycle of
corruption in the Philippines, which has not only exacerbated poverty but also obstructed the
development of a competitive business environment that operates on a level playing field.

Unified Code of Conduct for Business

o Top Management

 Our top management leads by example by consistently demonstrating the value

of conducting business with integrity.

 Our officers strongly communicate our organization's position against bribery,

corruption and unethical business practices within the company and the
broader public; comply with all the requirements of government regulatory
bodies; and prohibit cover-ups and falsified reports that conceal improper
transactions.

 Management strongly supports integrity practices and allocates sufficient

resources for their implementation.

o Human Resources

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  We strive to instill culture of integrity among our employees. The management
maintains open lines of communication with employees, particularly on
matters relating to honesty, transparency and integrity in business transactions.

 In the spirit of fairness and due process, all employees have the right to file
and respond to complaints against practices suspected to be illegal or unethical.

 We have appropriate tools to confidentially receive, monitor, and act on

internal and external complaints.

 Employees filing complaints will be protected from all types of retaliation,

while those involved in unethical practices will be subject to commensurate
disciplinary actions.

 We have instituted training programs on business ethics covering all levels of

the organization.

o Sales and Marketing

 We clearly communicate rules and guidelines on giving gifts, entertainment,

tokens of hospitality, and contributions to/from public and private
organizations and their representatives.

 Employees and all third parties engaged by our company to act as our
intermediaries, agents or representatives are not permitted to offer, promise, or
give, as well as demand or accept concessions-directly or indirectly- in order
to obtain, retain, or secure any undue advantage in the conduct of business.

 We abide by existing laws when transacting with government agencies(as

stipulated under RA 6713-Code of Conduct and Ethical Standards for Public
Officials and Employees and RA 3019--Anti-Graft and Corrupt Practices Act).

o Finance and Accounting

 We require all our employees to ensure that all books and records they create
or are responsible for are complete and accurate.

 Our financial records conform to standard accounting principles, comply with

Securities and Exchange Commission requirements on disclosure and
transparency, and abide by anti-money laundering laws (RA 9160)and
international conventions.

 We pay taxes in compliance with all laws.

o Procurement

SM Baliwag Complex, Dona Remedios Trinidad Highway, Brgy. Pagala, Baliwag, Bulacan
(+63) 927-533-0342 – (+63) 923-949-5265 admissions-nubaliwag@nu.edu.ph
  A track record of integrity and compliance with existing laws is a prerequisite
when we vet third party consultants, suppliers, intermediaries, and agents. Our
company has transparent procurement procedures, provides equal
opportunities for all suppliers, and prohibits, collusion between and among our
employees and suppliers.
 Recognizing that the Integrity Initiative is sustained through widely shared
ethical practices within the business community, we enter into integrity pacts
with our suppliers and ensure that they comply with the provisions of our pact.

 Contracting a third party to bribe or commit corrupt practices on behalf of the

company is strictly prohibited.

o Logistics

 We comply with laws and regulations pertaining to supply chain management.

 We do not tolerate any breaches in existing laws in exchange for undue

advantage and unethical concessions or favors. We pay correct duties and taxes
based on transparent assessment of goods and services.

 Employees are not penalized for refusing to pay bribes or facilitation payments
even if it results in failure to meet deadlines or loss. of revenue.

o Implementation and Monitoring

 We will continually to align our operations to the principles contained in this

Code periodically assess and monitor our compliance to it. We will continue
to share best practices with the business community to strengthen ethical
business processes in the Philippines.

IV. Case Study: SAMSUNG ETHICAL DILEMMAS

SAMSUNG Semiconductor Health Issues

https://youtu.be/geq0arY6y0o

The Untouchable Chaebols of South Korea

https://www.youtube.com/watch?v=6jFZge6V_is

V. Evaluation

1. Which unethical practices were committed by Samsung?

2. How did top management of Samsung play a role on these ethical dilemmas?

SM Baliwag Complex, Dona Remedios Trinidad Highway, Brgy. Pagala, Baliwag, Bulacan
(+63) 927-533-0342 – (+63) 923-949-5265 admissions-nubaliwag@nu.edu.ph
 3. As a private individual, what can you do to address unethical practices committed by powerful
corporations?
4. Use the 6 step approach in resolving Samsung’s ethical dilemma.

VI. References

Cabrera, M. E. (2021). Corporate Governance, Business Ethics, Risk Management and Internal
Control. Manila, Philippines: GIC Enterprises & co., Inc.

Rossouw & Van Vuuren (2017). Business Ethics. Cape Town, South Africa: Oxford University
Press Southern Africa (Pty) Limited.

SM Baliwag Complex, Dona Remedios Trinidad Highway, Brgy. Pagala, Baliwag, Bulacan
(+63) 927-533-0342 – (+63) 923-949-5265 admissions-nubaliwag@nu.edu.ph