Ethics, second class after

reading week
Topics to focus

 Governance  Discrimination
 Principal (Agent-Problem)  Glass Ceiling
 Control  Equality
 Monitoring  Fairness
 Board of Directors  Charter of Rights
 Incentives  Freedoms
 Corporate Citizenship  A.O.D.A.
 Triple Bottom Line
Last week
Code of Ethics
 Aspirational (virtuous)
 State values & allow for assessment
 Self-regulator
 Contribute to empowerment & trust (core ethical values)
 Made publicly available & thus can contribute to
improves relation with society (not just customers, or
those with a ‘holding’)
Today in the class

 Reflection #3
 Group assignment : any final questions?
 Governance; equal opportunity; discrimination &
affirmative action
 Chapter 6 & 8
 Refection #4
 Guest speaker
Reflection #3

 Three code of ethics Statements reflecting four personal

behavior this year (based on descriptive ethics)
 Justified using ethical framework
 What is your behavior?
 How does this behavior reflect your ethics?
 How does that behavior and its underlying ethics
convert into a guide for future behavior
Group project- Outline on course website

 Recommended Stages
1. Group: Identify core aspects of the business.
2. Group: Identify key ethical challenges the business
faces.
3. Individual: Apply frameworks to the challenges.
4. Group: selects a single ethical framework to use.
5. Individuals: write contributions to the code of ethics.
Group Project

 On course site, professor has provided links for several

databases through which you must might be able to
locate useful information about your business, or related
businesses.

 Why go to newspaper?
 Why consider similar businesses?
 Where else might you look for information?
Presentation (Next Week)

 After presentations, we will have lecture on

‘Whistleblowing’
 Group 1-4 through next week.
 Presentations should be 10 min.
 Precise and concise
Overall Purpose

 Apply course concepts to actual company.

 Identify ethical challenges.
 Assess best ethical framework.
 Recommend practical, ethically sound solutions.
Corporate Governance (pg. 171)

 Let’s consider
 What is governance?
 In whose interests are corporations governed?
 What sort of business problem; (and thus, ethical
problem) does corporate government reflect?
Ownership and Decision-making

 Case 8.1 (page 172-173)

 2 examples of separation of Ownership & control
 Hewlett-Packard’s take over of company
 Apple Computer and Steve jobs.
Principal and Agent (pg. 173)

 Principal: a person or entity first in the level of ownership

(shareholders).
 NOTE SPELLING: it’s not ‘principle’
 Agent: a person or entity that presents the interest of
other party (managers or executives)
Continued…

 Separation of control and ownership gives rise to the

principal- agent problem.
 What is the problem?
“Agent” temptations managers face
(pg. 174)
 NEPOTISM: Not hiring on merit, or need but hiring for
some familiar loyalty
 SHIRKING: Not working hard.
Control And Monitoring

 Two possible solution:

 Consider
 Monitoring

 How do they operate?

 Code of Conduct.
 Lets Consider some of these… (pg. 175)
 Check Table 8.1

 Board of Directors (pg. 175-176)

Incentive-based Executive
Compensation (pg. 176)
 Use of salary, bonuses , and long-term incentives to align
manages interests with shareholders interests.
Corporate Citizenship and Corporate
Governance
 Governance mechanisms are designed to reduce the conflicts
between management and owners.
 Typically the success of these mechanisms is measured in monetary
units.
 Stakeholder theory challenges understanding regarding the
corporation’s obligations.
 Implications of shareholder theory can benefit shareholders as well.
 Interests and needs of all stakeholders must be considered.
 Scope and timeframe is longer
 Stable, long term investor is more likely to reap the benefits.
Continued….

 Corporation governance has increasingly moved in the

direction of stakeholder theory.
 Many CEO’s also advocate corporate citizenship.
 Triple bottom line reporting is
another………………………………….
Chapter 6
Discrimination
 Types of discrimination
 Harassment and bullying.
 In the workplace, it’s and employer responsibility
Another type of discrimination

 Person with disability.

 To talk of “people with disabilities” is generally preferable
to identifying “handicapped” or “disabled” people.

 Why?
 What sort of ethical concern does this distinction reflect?
Glass Ceiling, Glass Walls

 What is a ‘glass ceiling’?

 Institutionalized bias against qualified people on the
basis of characteristics not related to the ability to
perform jobs.
 Glass ceiling  Figure 6.1
Glass Ceiling…counter-arguments

 Some suggest that ‘glass ceiling’ are not entirely

reflective of individuals employer discrimination
 What other explanations have been offered by people
such as ‘Pinker’.
Why Equality?

 Possible position:
 In life, outcomes are not equal
 On the other hand:
 One of the ideals of democracy is equality of people.
 Moral equality (pg. 136)
 Personal differences should not be the bias for
treating people unfairly.
Fairness

 Ideas of equality behind anti-discrimination laws, equal

opportunity and affirmative action is fairness.
 Hence, people who have been disadvantaged must be
sometimes treated “unequally”.
 Examples?
 Reserved seating on public transit.
 Maternity leave.
 Free spaces to practice religious rituals.
 Smoking areas environment.
Disabilities- Employer Obligations

 Employers have an obligation to know something about

disabilities.
 Canada: such responsibilities are supported by a legislative
framework:
 The Canadian Charter of Rights and freedoms,
 The Canadian Human Rights Act
 The Employment Equality Act.

 In Ontario: Accessibility for Ontarians……………………………

Canada
Character of Rights & Freedom
 Section 15.1: “ Every individual is equal before and
under the law and has the right to the equal protection
and equal benefits of the law….”
 Section 15.2: “ Subsection 1 does not preclude and law,
program or activity that has as its object the
amelioration of conditions of disadvantaged individuals
or groups…
Equal Opportunities Programs

 Prejudices obscure respect for persons and limit the

capacity to access their abilities.
 Thus, prejudice is not morally objectionable; it is bad for
business.
 In your own words, explain this concept.