Chapter 6 - Managing Ethics And Legal Compliance

Question 1

Structuring ethics management: Many businesses are allocating significant resources to _______________.

Answer 1

formal ethics and legal compliance programs.

Question 2

Structuring ethics management: sentencing guidelines were designed to _______________.

Answer 2

use a carrot and stick approach.

Question 3

Structuring ethics management: describe ethics infrastructure.

Answer 3

Ethics infrastructure can be centralized, decentralized or a combination of both. Depends on the structure of the organization and the needs of business units (if departments are decentralized, it is probably better for the ethics structure to be decentralized as well)

Question 4

Structuring ethics management: Describe some typical corporate ethics committees

Answer 4

Legal council = ethics officer
VP or Director of Ethics/Compliance
Most locate the ethics officer at the executive level

Question 5

Structuring ethics management: Describe insiders vs. outsiders

Answer 5

Insanization.
Outsider - ethics officer brought in from outside the organization.
Insiders - an ethics officer that is internal to the organization.

Question 6

What are the three general types of people in the organization (that will be the audience for an ethics movement)?

Answer 6

+ = characteristics – = needs
Good soldier: + good compass, know rules – encouragement, reinforcement
Loose Cannons: + good compass, don’t know rules – training, heightened supervision
Grenades: + no compass, personal agenda, may or may not know rules – swift discipline

Question 7

Name the communication channels/mediums used in formal ethical communications

Answer 7

• websites
• recruiting brocheurs
• orientation materials
• newsletter and magazines
• booklets

Question 8

Name some methods for formal ethics communications.

Answer 8

• mission and value statements
• policy manuals
• code of conduct
• Senior management communication done through training programs and stuff

Question 9

What is the difference between the code of ethics and the code of conduct?

Answer 9

A code of ethics describes broad ethics aspirations (also referred to as the value statement) which are intended to guide behaviour.
A code of conduct is an extensive description of acceptable behaviours in specific situations (often developed by the legal department).

Question 10

Describe a type of ethics program that an organization should employ based on the number of employees.

Answer 10

For 1-9 employees: Orient employees to relevant laws and regulations.
For 10-49 employees: Develop a code of ethics and code of conduct
For 50 - 199 employees: Appoint an ethics officer, steering committee and develop formal ethics training
For 200-999 employees: Develop ethics monitoring and reporting systems
For 1000-4999 employees: Ethics assist line and whistle-blowing procedures
More than 5000 employees: Create an ethics office

Question 11

What is the Sarbanes-Oxley Act?

Answer 11

All companies have to report whether or not they have a Code of Ethic for senior financial officers.

Question 12

What 6 main values should be present in all codes of ethics content?

Answer 12

1. Trustworthiness
2. Respect
3. Responsibility
4. Fairness
5. Caring
6. Citizenship

Question 13

What’s the purpose of strategic planning?

Answer 13

It integrates the organizations mission and vision and provides a clear direction.

Question 14

Describe the difference between compliance based and values based approaches to ethics.

Answer 14

Compliance based: 
- Based on law and regulations 
- reactive 
- limited senior management involvement
- obvious penalties
- signatures required
Values based:
- based on culture and driven by values
- proactive 
- commitment from senior management
- aligned with performance measures