Ethical leadership also enhances the company’s reputation in the financial market and community.
The leaders of a business may create an ethical culture by exhibiting the type of behavior they'd like to see in employees....
Business Management - Business ethics
Business ethics is another issue area that management in organisations
today must take into account when developing and implementing its policies
and procedures. Business ethics relate to the moral standards and
principles that underpin the organisation's policies and procedures; it's
about the judgements that the organisation makes in terms of what it
considers to be 'right or wrong'. Organisations and their affiliated bodies
and associations must develop a code of ethics which acts as a guide to the
development and implementation of their policies and procedures. An example
of such a code is the development and publication of 'corporate governance'
statements that need to be drawn up by all public companies. The statements
provide detail relating to:
* the composition, role and responsibilities of the board of directors
* administrative structures of the board
* descriptions of committee responsibilities and the responsibilities of
individual members with respect to these specific committees
* other details relating to subsidiary companies governed by the board
* appointments to audit the accounts and operations of the organisation
* risk management procedures
These statements are seen to be significant in terms of protecting the
interests of shareholders with respect to how organisation are operated and
controlled by the board of directors.
Business ethics also impacts on other aspects of the operations of an
organisation. For example, advertising undertaken by the organisation must
conform to certain legal requirements, but it should, in fact, go even
beyond that by conforming not only to the letter of the law but also the
spirit of the law. Government rules and regulations cover just about every
aspect of the organisation's operations and management must make sure that
they not only conform to these rules and regulations but that they also do
not attempt to breach their provisions by any unethical practices or
procedures, e.g. short cutting safety procedures in an effort to improve
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