Chapter 6: Ethics, Professionalism and Social Responsibility

Question 1

Professional codes

Answer 1

• Aim to regulate the behaviour of people practising a particular profession

Question 2

Good business practice

Answer 2

• The standards of professionalism, ethics and accountability that should be conducted
• Professionals should be guided by the Professional codes that state that there are predetermined consequences for professionals that do not adhere to the standards
• Illegal is always unethical but unethical is not always illegal

Question 3

Un/ethical behaviours

Answer 3

• Conflict of interest
• Bribes and corruption
• Unauthorised use of funds
• Innappropriate gifts
• Sexual Harassment
• Unfair advertising
• Employment/labour issues
• Pricing of goods
• Insider Trading
• Piracy
• Counterfeiting/Bootlegging
• Taxation
• Whistle-blowing

Question 4

Conflict of interest

Answer 4

When someone in the business has the opportunity to make a decision that benefits their personal interest over the business’s

Question 5

Bribes and corruption

Answer 5

• When a reward is offered to give a third party an advantage that they aren’t entitled to
• Does not have to be monetary, can be a promotion, employment, gift, etc
• If monetary can also be refered to as a soothing payment or facilitation payment
• Corruption is when someone in a position of power abuses that power

Question 6

Innapropriate gifts

Answer 6

• Al gifts received by en=ployees must be declared
• There may be a limit as to how much a gift may cost
• All these rules are because certian gifts may be viewed as bribes even if there are no strings attached

Question 7

Unauthorised use of funds

Answer 7

• When someone in the business uses the business’s funds for personal use
• Is the same as theft

Question 8

Sexual Harassment

Answer 8

• Business must clearly stipulate what sexual harassment entails, the consequences for it and the procedure should someone feel they are a victim of it
• Unwelcomed touching
• Verbal conduct like sexual advanced, sexual jokes, innappropriate questions about personal sex life, unwelcomed whistling
• Sexual gestures, innappropriate exposure or display of sexual content
• Exchanging rewards for sexual favours

Question 9

Employment/labour issues

Answer 9

• Abusing sick leave
• Verbal abuse of employees/collegues
• Abuse of internet
  1. * Watching porn on work internet
  2. Making confidential information available
  3. Spreading rumours that could damage business/employee
  4. Being of social platforms instead of working
• Taking work stationery home for personal use

Question 10

Pricing of Goods

Answer 10

• Price fixing: When the competitiors agree to charge buyers a predetermined price
• It is illegal to charge more in rural areas than in urban areas
• It is illegal for two or more businesses to come together to make their pricing unfair to other businesses
• It is illegal for a business to eliminate the buyer’s freedom of choice by forcing them to only be able to access a product or service through them

Question 11

Piracy

Answer 11

Illegal use of reproduction of someone else’s work that has been copyrigthed or patented

Question 12

Insider trading

Answer 12

When someone trades shares on the JSE based off of information that is confidential

Question 13

Taxation

Answer 13

• Tax avoidance: Is a legal and ethical way for a business to find ways to reduce how much tax theyre charged
• Tax avoidance: Is a illegal and unethical way for business’s to pay less taxes by not declaring income and lying about expenses

Question 14

Counterfeiting/Bootlegging

Answer 14

• Counterfeiting is fraudulently imitating another business’s/person’s work and making it out to be the original
• Bootlegging is the illegal production and/or distribution of a product

Question 15

Whistle-blowing

Answer 15

• A whistleblower is someone who exposes unethical or illegal acts done by a business or individual
• It is illegal to fire someone for whistle-blowing so blowers are protected by law

Question 16

Code of ethics in business and finance

Answer 16

• Ethics codes serve as a framework for expected behaviour and the consequences of unethical behaviour
• Guide business decisions
• Communicate ethical vision of the business
• Protects the business if employee breaches the code
• Helps new employees understand what will not be tolerated and what is deemd ethical
• Eliminates confusion when interacting internationally because every group has a different standard of ethics
• Can guide employees and business regarding CSR
• Can create a favourable image to the public and create competitive advantage

Question 17

Code of ethics in government

Answer 17

• NACF:National Anti-Corruption Forum- An initiative to fight against corruption
• National Crime prevention that created the Code of Conduct for the Public Service(governs behavior of civil servants)
• Parliament has a Code of Conduct for Members of Parliament

Question 18

Ethics in the international market

Answer 18

• Ethical standards in different countries will differ a lot
• Business must be aware of what happens within their supply chain

Question 19

Implications of CSR

Answer 19

• Employee: Happy and appreciated employees perform better and show loyalty, even outside work
• Customer: Creates competitive advantage and has the customers talking good about them
• Supplier: Other businesses will want to associate themselves with ethical and responsible businesses
• Community: Improving community’s standard of living benefits in the long run
• Government: Less likely to enforce through legislation if businesses do it voluntarily

Question 20

Implications of CSR for the community

Answer 20

• Healthier and well taken care of environment results in healthier people
• More skills lead to less unemployment, which means improved standard of living and less socio-economic issues
• Better control over diseases due to better education
• Feedings schemes take care of basic needs to children can focus on school
• Sponsorships make a difference

Question 21

FTSE / JSE Responsible investment Index

Answer 21

• Continue the work that was started by the JSE in recognising companies with good Corporate Governance and Integrated reporting
• Measure the policies and procedures of businesses listed on the JSE against the ESG standards
• Promote responsible business standards in SA and beyond

Question 23

Benefits of the FTSE/JSE Responsible Investment Index

Answer 23

• Promotes ESG disclosure in businesses
• Scores points on the FTSE/JSE which lets shareholders know that the business is transparent and responsible regarding its ESG dealings
• Could create a favourable image and thus competitive advantage
• Companies that market themselves as compliant with the FTSE/JSE Responsible Investment Index will adopt it into their business culture and make it apart of their brand
• Good performance on this thing can benefit the business financially

Question 24

Global Reporting Initiative

Answer 24

• Is a non profit organisation that promotes reports on sustainability through a Sustainabilty Reporting Framework
• It’s used to promote transparency within all businesses

Pros:
* Provides guidelines to the business’s impact on environmental, economic and social issues
* Because it’s international, it ensures the relevant businesses are compared to one another in different countries and sectors