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Assignment 2

The document provides instructions for an assignment on how corporate governance can reduce unethical behavior. It asks students to explain five ways this can be done and provide one example from a services company discussed in class. The answer explains five key ways such as establishing ethical guidelines, independent board oversight, transparency, whistleblower protection, and ethical training. It uses a financial advisory firm as an example to illustrate these points.

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deivane vani
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55 views

Assignment 2

The document provides instructions for an assignment on how corporate governance can reduce unethical behavior. It asks students to explain five ways this can be done and provide one example from a services company discussed in class. The answer explains five key ways such as establishing ethical guidelines, independent board oversight, transparency, whistleblower protection, and ethical training. It uses a financial advisory firm as an example to illustrate these points.

Uploaded by

deivane vani
Copyright
© © All Rights Reserved
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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INDIVIDUAL

Semester; May’23

Course; Business Ethics

Course Code; BBA512A

Assignment Instructions

1. Students are to ensure all work done are NOT plagiarized and are properly referenced
(attached together with the report).
2. Students must use the designated cover sheet when handing in assignments.
3. Your assignment should be typed using font Times New Roman, size 12.
4. Your paragraph must be justified with line spacing 1.5
5. Your assignment should be around 2000 words excluding references. The number of the
words should be shown at the end of the assignment. Only assignment answer developed within
the approximate word limit will be assessed.
6. Submission of the assignment need based on the given date. Any late submission resulting for
deductions of marks.
7. Reference (APA format)

Marks: 50 marks

Deadline: 4.7.2023
All decisions are ethical decision. Ethics concerns what a good or right in human interaction and
deals with justice and rights issues. Corporate governance encompasses a broad spectrum of
internal and external mechanisms intended to mitigate agency risk by increasing the monitoring
of managements’ actions, limiting managers’ opportunistic behaviour and improving the quality
of firms’ information flows. Explain FIVE (5) ways on how corporate governance can reduce
and prevent unethical behaviour in the organization. Provide with ONE (1) example of Services
Company as discussed in the class.

ANSWER:

Corporate governance serves as a vital framework for organizations to promote ethical behavior
and prevent unethical practices. In this essay, we will discuss five key ways in which corporate
governance can effectively reduce and prevent unethical behavior within an organization. To
illustrate these points, we will focus on a Services Company, specifically a leading financial
advisory firm called "WealthGuard."

Firstly, establishing clear ethical guidelines and codes of conduct. Ethical guidelines and codes
of conduct are essential tools for corporate governance to set clear expectations for employees.
WealthGuard can develop a comprehensive code of conduct that encompasses integrity,
transparency, and accountability. This code should address potential ethical pitfalls, such as
conflicts of interest, insider trading, and discriminatory practices. By establishing these
guidelines, WealthGuard ensures that employees have a clear understanding of ethical
boundaries and are equipped to make responsible decisions.

Secondly, independent board oversight and effective committees. Corporate governance involves
the appointment of an independent board of directors with diverse expertise. The board should
act as a guardian of ethical practices within the organization. WealthGuard can appoint
independent directors who are not affiliated with the company or its clients. These directors
should oversee executive decisions, financial reporting, and ensure compliance with ethical
standards. Additionally, specialized committees, such as an audit committee or ethics committee,
can enhance oversight and provide expert guidance.
Thirdly, transparency and stakeholder engagement. Transparency is a cornerstone of effective
corporate governance. WealthGuard can adopt transparency as a core value by providing
stakeholders with access to information about the company's operations, decision-making
processes, and financial performance. Regular communication with stakeholders, including
shareholders, clients, and employees, builds trust and fosters accountability. By being
transparent, WealthGuard encourages ethical conduct, as it promotes a culture of openness and
responsible business practices.

Fourthly, whistleblower protection and reporting mechanisms. Corporate governance should


prioritize the establishment of robust whistleblower protection policies and reporting
mechanisms. WealthGuard can create channels for employees, clients, and other stakeholders to
report unethical behavior without fear of retaliation. A confidential reporting hotline, an
anonymous online reporting system, or an independent ombudsman can serve as effective
reporting mechanisms. Encouraging the reporting of unethical behavior enables prompt
identification and remediation of issues, safeguarding the organization's ethical integrity.

Finally, ethical training and continuous education. To embed ethical behavior, corporate
governance must emphasize ongoing training and education programs. WealthGuard can provide
regular training sessions on ethical decision-making, reinforcing the company's code of conduct
and addressing ethical challenges specific to the financial advisory industry. These training
programs can utilize case studies, role-playing exercises, and interactive workshops to enhance
employees' understanding of ethical behavior and equip them with the tools to navigate complex
ethical dilemmas.

One of the examples is, WealthGuard, as a financial advisory firm, can showcase its commitment
to ethical conduct by adopting strict guidelines on conflicts of interest. The company can
implement policies that require employees to disclose any potential conflicts and establish a clear
process for managing such conflicts. This ensures that Wealth Guard’s clients receive unbiased
advice and that employees are guided by principles of integrity and client-centricity.

In conclusion, corporate governance plays a pivotal role in reducing and preventing unethical
behavior within organizations. Through the establishment of clear ethical guidelines,
independent board oversight, transparency, whistleblower protection, and ethical training,
companies like WealthGuard can create an environment that values integrity and responsible
decision-making. By adhering to these principles, organizations not only protect their reputation
but also gain the trust of stakeholders and contribute to the development of a more ethical
business landscape overall. Effective corporate governance serves as a cornerstone for
organizations committed to ethical excellence.

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