Chapter 8 - Corporate Culture / Business Ethics

Question 1

What is corporate culture?

Answer 1

A company’s behaviours and the way it conducts business and embraces and adopts its values.

Question 2

Board’s responsibility regarding corporate culture (Code B /E / Wates/B.Effectiveness)

Answer 2

Code B
The board should establish the company’s purpose, values, and strategy and ensure culture I’d aligned to those. Directors must act with integrity, lead by example, and promote the desired culture.

Code E
Policies/ practices align with values. Should raise matters of concern (whistleblowing)

WATES
Effective boards develop/promote the company’s purpose and ensure values, strategy, and culture align.

BOARD EFFECTIVENESS
an effective board defines the companies purpose and sets strategy to deliver it, underpinned by the values and behaviours that shape its culture and the way it conducts business.

Focus on culture should be continuous

Question 3

How can a company’s culture and/or code of ethics be set?

Answer 3

1. Agree values and how they align to strategy
2. Develop/adopt a code of ethics
3. Consider values when developing P&Ps
4. Publicise values/code of ethics internally and externally (include in employee training)
5. Integrste values into functions/operations
6. Rewards encourage behaviours consistent with values/culture
7. Ensure culture of accountability/ openness (whistleblowing)
8. Set the tone from the top

Question 4

How can a co sec help the board establish/maintain an ethical culture?

Answer 4

1. Add to agenda
2. Suggest KPIs are selected based on stakeholders’ expectations
3. Develop dashboard for KPIs (reviewed by board occasionally)
4. Draw from a variety of sources to monitor perception of performance for KPIs
5. Organise board site visits to see if culture is embedded
6. Help develop stakeholder reporting on culture/ ethics.
7. Develop/draft code of ethics

Question 5

Culture and Ethics - Key words

Answer 5

Values
Attitudes
Behaviours
Purpose
Strategy
Align

Question 6

Benefit of a healthy corporate culture

Answer 6

• a valuable asset
• a competitive advantage
• vital to long-term value
• protects and generates value

Question 7

How can corporate culture be measured?

Answer 7

1. Staff survey
2. Stakeholder survey /discussion
3. Board agenda
4. Reports of customer complaints
5. Reports/feedback of whistleblowing
6. Direct interaction with employees/stakeholders

Question 8

What is business ethics

Answer 8

The application of ethics values to business behaviours

Question 9

Code of Ethics content

Answer 9

1. Values
2. Ethical principles
3. Ethical standards towards stakeholders
4. Implementation of the code of ethics
   > statement of responsibility
   > how to get advice
   > training

Question 10

Ethical principles are statements that … (4)

Answer 10

1. Provide guidance / direction for behaviours
2. Relate to fairness and equality
3. Are universal
4. Set boundaries

Question 11

Business Ethics are achieved by (7)

Answer 11

1. Develop ethical values
2. Reflect in code of conduct / code of ethics
3. Communicate
4. Implement / train / refresh
5. Reward behaviours that match
6. Environment to raise concerns
7. Review code

Question 12

Ethical values (4)

Answer 12

1. Shapes context in which ethical principles are implemented
2. Guides staff choices
3. Frames behavioural norms
4. Incorporate into culture.