ethics Flashcards
ethics vs. compliance
ethics: principles of behavior to which we hold ourselves
compliance: extent a company conducts its business operations in accordance with applicable regulations/laws
fraud triangle
ethical violations in business: pressure, opportunity, rationalization
giving voice to values (GVV) & 7 pillars
effectively act on your values in professional life
- values
- purpose
- choice
- normalization
- self knowledge and alignment
- voice
- reasons and rationalizations
case: follow dubious orders or speak up?
ethical dilemma - asked to misrepresent herself, violate her own values, risks of damaging her own rep/university’s
enron
one of the biggest ethical fraud scandals in business world; energy company.
“legal fraud” - so much of what they did was legal. hid massive trading losses -> large accounting scandals and bankruptcy. used fraudulent accounting practice to inflate revenues and hide debts
SEC accused of negligence, Congress passed Sarbanes-Oxley Act to hold corporate executives more accountable for financial statements
Theranos
consumer healthcare tech startup claimed to revolutionize blood testing industry. obtained tons of capital from venture capitalists and private investors
SEC charges Theranos, CEO Holmes and former President Balwani w/ fraud
Defense: “Failure is not a crime”
FTX
centralized crypto exchange specializing in derivatives, filed for bankruptcy. CEO is Sam Bankman-Fried – accused of using billions of FTX money to pay off debts at other companies, buy real estate, make political donos
separation fallacy vs. integration thesis
separation fallacy: tendency to separate the business case from the ethics case
integration thesis: ethics isn’t just about avoiding illegal actions, conducting ourselves and business to benefit rather than harm others
legal vs. ethical
law: how not to behave, minimum standard, sometimes ambiguous and evolves over time
