GUESS THE WORD
LESSON 4
Code of Ethics and Business
Conduct
LEARNING OBJECTIVES
1. Explain what code of ethics and codes of corporate
conduct are.
2. Give examples of corporate codes of ethics some
firms in the Philippines
3. Explain the meaning of corporate ethical culture.
4. Explain how ethical cultures can be created in
business organizations.
What is Code of Ethics
Code of Ethics
A component of business ethics which support the
values of the organization such as credos that
employees should live by during their entire stay in
the company
American ethics code 1st called creed or credos
Components of Code of Ethics
1. Values
2. Principles
3. Management support
4. Personal Responsibility
5. Compliance
Components of Code of Ethics
1. Values – guide the organization’s internal conduct and its relationship with
stakeholders. Values should be expressed with honesty and fairness and treated with
respect regardless of position and circumstances.
2. Principles – credos, “ customer satisfaction, business profitability and continuous
improvements”
3. Management support – management is serious in considering the code as the bible of
the employees in terms of ethics.
4. Personal Responsibility – any member of the organization should uphold and preserve
the code of ethics any violations of the code may involve legal and moral
consequences.
5. Compliance – all legal requirements of the code should be met, including licensing and
reporting financial statements.
3 Key Principles
for Successful management of Ethics
Managers:
1. Must know what is right
2. Value what is right
3. Do what is right
“ Carl Skoogland” – Ethics Director
Example of contents of Code of Ethics
A. Ayala Corporation Code of Ethics
(All directors, officers and employees shall)
1. Conduct business in accordance with Philippine laws and
regulations.
2. Personally and firmly adhere to the standards and
restrictions imposed by laws and regulations as well as the
corporation’s policies and procedures. and
3. Ensure compliance will all disclosure requirements,
making sure that all disclosure of material information are
full, fair, accurate and timely.
Example of contents of Code of Ethics
B. Uniliver Code of Ethics
(All employees must)
1. Respect the dignity and human rights of colleagues and all
others they come into contact with as part of their jobs.
2. Treat everyone fairly and equally, without discrimination on
the grounds of race, age, role, gender, gender identity, color,
religion, country of origin, sexual orientation, marital status,
dependents disability, social class or political views.
This include consideration for recruitment, redundancy,
promotion, reward and benefits, training or retirement which
must based on merit.
Example of contents of Code of Ethics
C. Nestle Corporate Business Principles
(Some of the basic values and principles are)
1. Favoring long-term development over short-term profit
2. Long-term commitment and relationships
3. Respect for and integration with diverse cultures
4. Proper conduct and ethical values as basic requirements for
our management and employees
5. Recognition that consumers deserved information about the
products they buy and the company behind the brand.
Suggestions for creating Corporate Codes of Ethics
in Business Organization
1. Adopt code of ethics
2. Provide ethics training
3. Hire and promote ethical people
4. Correct unethical behaviour
5. Take a proactive strategy
6. Conduct a social audit
7. Protect whistle-blowers
Suggestions for creating Corporate Codes of Ethics
in Business Organization
8. Empower the guardians of integrity
9.Assure commitment from the top.
10. Communicate the standard of conduct widely
11. Designate an ethics officers with clear responsibility for enforcing
ethical standards
12. Establish a process for reporting violations of ethical standards
13. Assure due diligence
14. Lead by example
Culture
Culture comes from colere a word that is of agricultural origin.
“ Cultivating”
Culture, then is a human world, created by man, a continuation
of nature
Culture, a human reality and resides in human communities.
Corporate Culture
Corporate Culture
Refers to the assumptions, beliefs, goals, knowledge and
values that are shared by organizational members
Barnard, a theorist, is the father of the concept of corporate
culture
Discussion Questions
1. What are the code of ethics?
2. What does code typically contain? Give examples of
corporate codes of ethics in the Philippine firms.
3. What is corporate culture? What is meant by corporate
ethical culture?
4. What steps can be taken to create and maintain an
ethical culture in a business organization?
Group Activity
Using the components of the Code of Ethics, form a small
groups. Formulate the code of ethics of class, share your
outputs to the class. Integrate the best outputs into the main
code that will be adopted by the class.
Assignment
Instructions:
In group of 5 members, answer the case study of Gordon
Gekko and “Greed is Good” in page 41-42.
Write your answer in a whole sheet of paper.
