Chapter 4

Question 1

What are ethics?

Answer 1

Rules of behaviour based on what is good & bad.

A system of moral principles, which guides people in making decisions

Question 2

What are the 4 types of ethics?

Answer 2

1. Personal or individual ethics
2. Professional ethics
3. Business ethics
4. Societal ethics

Question 3

What is corporate governance?

Answer 3

It is how an organization is managed & controlled and how it’s resources are used efficiently

Question 4

What is the King IV code?

Answer 4

It provides a framework with principles & practices aimed at achieving good governance

Question 5

King IV defines ethics in business as?

Answer 5

In the context of organisations, ethics refers to ethical values applied to decision-making, conduct & the relationship between the organisation, its stakeholders & broader society

Question 6

What is the King IV approach?

Answer 6

• ethical& effective leadership
• organisation’s role & responsibility in society
• corporate citizenship
• sustainable development
• stakeholder inclusivity & responsiveness
• integrated reporting & thinking

Question 7

What is the King V approach?

Answer 7

“inclusive capitalism” that serves the causes of human equality & diversity & protects the ecology of the planet, alongside driving returns to shareholders

Question 8

What does a strong corporate governance based on ethical behaviour attract?

Answer 8

• investors
• ethical customers & clients
• quality employees

Question 9

What are the critical items of the code of ethics?

Answer 9

• conflict-of-interest policy
• code of conduct policy
• whistle-blower policy
• organisation-specific Ethical Statement & Value Statements
• Gift acceptance policy
• Donor Bill of Rights

Question 10

What is Legislation?

Answer 10

Acts & regulations designed to encourage ethical behaviour

Question 11

What are policies & procedures?

Answer 11

They are set-up within the business, which includes sexual harrassment, whistle-blowing & codes of conduct

Question 12

What are personal or corporate culture?

Answer 12

Moral stance taken when any law, policy or procedure does not specifically deal with an issue, but which needs to be dealt with

Question 13

Which are the 2 codes in financial services which deal with business context & legislation?

Answer 13

• codes of conduct
• governance codes of conduct (king IV)

Question 14

What principles & sections are included in a code of ethics?

Answer 14

• Mission & purpose statement of the organization
• purpose of the code of ethics
• principles governing internal organisational relationships
• principles governing relationships with customers
• enforcement of the code

Question 15

Rights Approach

Answer 15

• Deontological ethics
• By Immanuel Kant
• Humans can choose freely what they will do with their lives & their choices must be respected
• Does the action respect the moral rights of others

Question 16

Utilitarian Approach

Answer 16

• By Jeremy Bentham & John Stuart
• Ethical actions are those that balance good over evil
• The greatest good for the greatest number of people

Question 17

Fairness or Justice Approach

Answer 17

• “Equals should be treated equally & unequals unequally”
• Favouritism & discrimination are unjust & wrong
• Does an action show Favouritism & discrimination?

Question 18

Common good approach

Answer 18

• members of a society are bound by the pursuit of common values, goals & focuses
• e.g Affordable healthcare

Question 19

Virtue approach

Answer 19

• Ideals that helpfully develop humanity
• virtues are attitude or character traits that enable us to develop our highest potential & to pursue ideals we strive towards
• virtues are like habits
• e.g honesty, courage, compassion

Question 20

What questions do you ask when solving ethical problems?

Answer 20

1. What benefits & what harms will each course of action produce & which alternative will lead to the best overall consequences?
2. What moral rights do the affected parties have, & which course of action best respects those rights?
3. Which course of action treats everyone the same, except where there is a morally justifiable reason not to & does not show favouritism or discrimination?
4. Which course of action advances the common good?
5. Which course of action develops moral virtues?