ETHICS context of globalization and globalizing regimes of

SESSION 1 power: politically, economically and culturally.

2. Governance in “national space”
Ethics
Within a country: this is sometimes understood as
- Aka MORAL PHILOSOPHY the exclusive preserve of government, of which
- Systematizing, defending, recommending there may be several levels: national, provincial or
concepts of right and wrong state, indigenous, urban or local
Business Ethics 3. Governance in “organization space”
- Study of proper business policies and practices This comprises the activities of organizations that
regarding potentially controversial issues such are usually accountable to a board of directors. 
as corporate governance, insider trading,
4. Governance in “community space”
bribery, discrimination, corporate social
responsibility, and fiduciary responsibilities Community Governance - this includes activities at a
local level where the organizing body may not assume a
Social Responsibility
legal form and where there may not be a formally
- Businesses should balance profit making and constituted governing board
activities that benefits society
- Developing a positive relationship in the society “Community governance” refers to the processes for
making all the decisions and plans that affect life in the
in which they operate
community, whether made by public or private
organizations or by citizens.
SESSION 2
Governance is not only about steering but also about Corporate Governance (Private Sector)
who should be involved in deciding, and in what
capacity. - refers to the system of direction and control of
business corporations
- Steering – controlling the direction; moving or
guiding in a particular direction Public Governance
- exercise of power or authority by political - refers to the method through which power is exercised
leaders for the well-being of their country’s in the management of the country’s political, economic
citizens or subjects. and social resources for development (World Bank,
- essentially means the process of decision- 1992).
making and implementation Governability refers to management of the people or
- manner in which the organizations involved the extent to which societal institutions and spheres can
be steered. Basically, it could mean the ability of the
relate to each other
people to govern and to be governed.
Areas of Governance
There can be good governance when government is
1. Governance in “global space” manned by people who have the ability to govern and
when the people themselves are willing and allow
Global governance or world governance is a themselves to be governed.
movement towards political cooperation among
transnational actors, aimed at negotiating
responses to problems that affect more than one
state or region. Institutions of global governance— It means that government leaders have the capacity,
capability and spirit to serve as civil servants. On the
the United Nations, the International Criminal
Court, the World Bank, etc.—tend to have limited or other hand, the people themselves must be willing to
give up some of their “rights” and privileges for the
demarcated power to enforce compliance. The
modern question of world governance exists in the government to be able to act.
 - Mobilizing peoples’ participation, cooperate with
the government but also hold government and
The Governance Framework market/business accountable.
- defined as a community, nation, or broad grouping
of people having common traditions, institutions,
State and collective activities and interests

Civil - includes political parties, interest groups, non-

Market governmental organizations, the media, the
society
academe and the church, among others

The Government/State
The right to hold the government accountable finds
- creating a favorable political, legal and economic
legal basis from the Philippine Constitution specifically:
environment
  Art. II, Section 1. The Philippines is a democratic and
- The Institution, that is, the establishment that
republican State. Sovereignty resides in the people and
governs.
all government authority emanates from them.
- The group of people that control a country, that is,
Art. II, Section 27. The State shall maintain honesty and
the elected and appointed officials that lead.
integrity in the public service and take positive and
- The people, that is, the citizens and constituencies effective measures against graft and corruption.
that compose the country.
  Art. II, Section 28. Subject to reasonable conditions
- A system of people, laws and officials that define prescribed by law, the State adopts and implements a
and control the country/state. policy of full public disclosure of all its transactions
involving public interest.
- Investment Policies such as tax incentives and
efficient operations such as streamlined business
processes application must be in place.
The Relationship among Government, Market and Civil
- This obligation of the government finds legal basis Society
from the Philippine Constitution, Art. II, Section 20
If government wants to encourage investment
which states:
opportunities, it must provide an enabling environment
Section 20. The State recognizes the indispensable for business to thrive.
role of the private sector, encourages private
For example, the peace situation must be stable and
enterprise, and provides incentives to needed
there is no threat of kidnapping of rich businessmen for
investments.
ransom or bombing. Applying for a business permit
 The Market must be easy and taxes must not be prohibitive. If the
people/civil society want the government to be not
- Creating opportunities for people. Labor intensive corrupt, it must not offer or pay bribes to government
businesses are best to create employment officials and report and testify against those who are
opportunities for people. Moreover, their corrupt so that they can be prosecuted. If the
employment must come with just wages in order for people/civil society want the business sector to engage
the people to have decent lives in good business practices such as paying their
- the area of economic activity in which buyers and employees just wages, they should patronize those that
sellers come together and the forces of supply and practice good business and boycott those that employ
demand affect price illegal practices. For example, if a mall or department
store does not pay the correct taxes to the government
- the business sector and the private sector or engages in child labor, the customers must not
patronize such business.
Civil Society
 • Unwelcome and unwanted sexual conduct that
either happens repeatedly or is of serious
nature (e.g. sexual assault)

SESSION 6
ORGANIZATIONAL ISSUES

Workplace Romance Legal Basis for Sexual Harassment

- relationship that occurs “between two members (Philippine Commission on Women)
of an organization where sexual attraction is Republic Act 7877- Anti-Sexual Harassment Act of 1995
present, affection is communicated, and both
members recognize the relationship to be SECTION 3. Work, Education or Training -Related,
something more than just professional and Sexual Harassment Defined. - Work, education or
platonic.” training-related sexual harassment is committed by an
- voluntary and reciproal employer, employee, manager, supervisor, agent of the
- no law prohibiting workplace romance, but employer, teacher, instructor, professor, coach, trainor,
there are companies whose guidelines prohibit or any other person who, having authority, influence or
it because of its negative effects. moral ascendancy over another in a work or training or
Advantages: education environment, demands, requests or otherwise
requires any sexual favor from the other, regardless of
1. Happily In Love Makes You A Good Worker whether the demand, request or requirement for
2. Motivation To Start Each Day submission is accepted by the object of said Act.
3. Positivity Everywhere
4. Less Distractions (a) In a work-related or employment environment,
5. Mutual Understanding of Professional Pressures sexual harassment is committed when:
Disadvantages: (1) The sexual favor is made as a condition in the
1. Commingling Of Personal And Professional Life hiring or in the employment, re-employment or
2. What If It Ends? continued employment of said individual, or in
3. Think About Promotion granting said individual favorable compensation,
4. Work Is No More An Escape terms of conditions, promotions, or privileges; or
5. Excess Of Everything Is Bad the refusal to grant the sexual favor results in
limiting, segregating or classifying the employee
which in any way would discriminate, deprive or
Sexual Harassment diminish employment opportunities or otherwise
They are unwelcome sexual advances, requests for adversely affect said employee;
sexual favors, and other verbal, visual or physical (2) The above acts would impair the employee's
conduct of a sexual nature. It is considered harassment rights or privileges under existing labor laws; or
when:
(3) The above acts would result in an intimidating,
• submission to the conduct is either explicitly or hostile, or offensive environment for the employee.
implicitly a term or condition of employment,
(b) In an education or training environment, sexual
• submission to or rejection of such conduct is harassment is committed:
used as the basis for employment decisions, or
(1) Against one who is under the care, custody or
• the conduct has the purpose or effect of supervision of the offender;
unreasonably interfering with an individual’s
work performance or creating an intimidating, (2) Against one whose education, training,
hostile, or offensive working environment. apprenticeship or tutorship is entrusted to the
offender;
 (3) When the sexual favor is made a condition to the from government, the business sector and the
giving of a passing grade, or the granting of honors labor unions.
and scholarships, or the payment of a stipend,
LIVING WAGE
allowance or other benefits, privileges, or
consideration; or - is a theoretical wage level that allows the
(4) When the sexual advances result in an earner to afford adequate shelter, food and the
intimidating, hostile or offensive environment for the other necessities of life. The living wage should
student, trainee or apprentice. be substantial enough to ensure that no more
than 30% of it needs to be spent on housing.
Any person who directs or induces another to
commit any act of sexual harassment as herein
defined, or who cooperates in the commission
thereof by another without which it would not have LABOR ORGANIZATION
been committed, shall also be held liable under this It is an employee union or association existing in whole
Act. or in part for the purpose of collective bargaining or of
Elements dealing with employers concerning terms and
conditions of employment.
1) The employer, employee, manager, supervisor,
agent of the employer, teacher, instructor, Although the employer follows certain business laws
professor, coach, trainor, or any other person has they still need as well to take note of the needs and
authority, influence or moral ascendancy over welfare of their employees by that the government
another; mandated organization to allow employees created
2) The authority, influence or moral ascendancy their own Labor Union.
exists in a working, education or training
Labor Unions of an organization is filed in DOLE for its
environment;
legitimacy, personality (rationale or background), and
3) The employer, employee, manager, supervisor, has the right privileges to
agent of the employer, teacher, instructor,
professor, coach, or any other person having 1. As representative of any employee or
authority, influence or moral ascendancy makes a employees.
demand, request or requirement of a sexual favor.
2. Conducts the employee collective bargaining for
policies and protocols that have been
implemented and will be implemented.
Just Wage, Labor Union, Unfair Labor Practice and
Strikes 3. Takes care of the employees’ welfare and
rights..
KINDS OF WAGES
JUST WAGE Presidential Decree No. 442 Labor Code of the
Philippines, Book Five Labor Relations, Art. 211.
- wage level for a job that is set by market Declaration
dynamics and justified by the requirements in
terms of the worker's experience, education, It is the policy of the State:
and skills. Justified wage is the wage level that is
1. To promote and emphasize the primacy of free
high enough to attract workers but low enough
to enable employers to offer employment. collective bargaining and negotiations, including
voluntary arbitration, mediation and
MINIMUM WAGE conciliation, as modes of settling labor or
- mandated by the government to be given to a industrial disputes;
worker for an 8 hour work. The minimum wage 2. To promote free trade unionism as an
differs from region to region and is set by the instrument for the enhancement of democracy
Regional Tripartite Wages and Productivity
and the promotion of social justice and
Board (RTWPB) composed by representatives
development;
 3. To foster the free and voluntary organization of Agency Problems, Disclosures and Corporate
a strong and united labor movement; Governance

Art. 247. Concept of unfair labor practice and procedure AGENCY PROBLEMS
for prosecution thereof. Unfair labor practices violate
The agency problem arises in a situation where an agent
the constitutional right of workers and employees to
(i.e. a director of a company) does not act in the best
self-organization, are inimical to the legitimate interests
interests of a principal (i.e. a shareholder). When a
of both labor and management, including their right to
principal chooses to act through others and its interest
bargain collectively and otherwise deal with each other
depends on others, it is subject to an agency problem.
in an atmosphere of freedom and mutual respect,
“The problem lies in motivating the agent to act in the
disrupt industrial peace and hinder the promotion of
principal’s interest rather than simply in the agent’s
healthy and stable labor-management relations.
own interest.”

KINDS OF STRIKE
CORPORATE DISCLOSURE
When management violates the CBA, the workers go on
Corporate disclosure is information public companies,
a labor strike. Labor Strike is work stoppage caused by
mutual funds and corporate insiders are required to tell
the mass refusal of employees to work which usually
the investing public.
happens during collective bargaining or when the CBA is
violated. This is required by law such as the Annual Report.
Contents of the annual report must include but are not
Last resort and presupposes that the duty to bargain in
limited to:
good faith has been fulfilled and other voluntary modes
of dispute settlement have been tried and exhausted. • The financial and operating results of the
company
Unfair Labor Practices Strike is one called to protest
• Company objectives
against the employer’s acts of unfair labor practice
• Major share ownership and voting rights
enumerated in Article 248 of the Labor Code, as
• Members of the board and key executives and
amended, including gross violation of the collective
their remuneration
bargaining agreement (CBA) and union busting.
• Material foreseeable risk factors
Slowdown Strike is one staged without the workers • Material issues regarding employees and other
quitting their work but merely slackening or by reducing stakeholders
their normal work output. • Governance structures and policies
A strong disclosure regime is a pivotal feature of
Wild-cat Strike is one declared and staged without filing
market-based monitoring of corporate conduct and is
the required notice of strike and without the majority
central to the ability of shareholders to exercise their
approval of the recognized bargaining agent.
voting rights effectively. Experience in countries with
Sit Down Strike is one where the workers stop working large and active equity markets shows that disclosure
but do not leave their place of work. can also be a powerful tool for influencing the
behaviour of companies and for protecting investors. A
Economic Strike is one staged by workers to force wage strong disclosure regime can help to attract capital and
or other economic concessions from the employer maintain confidence in capital markets. Shareholders
which he is not required by law to grant. and potential investors require access to regular,
• Can be resolved by collective bargaining of the reliable and comparable information in sufficient detail
employees or the wage labors for them to assess the stewardship of management and
make informed decisions about the valuation,
• If an employer exhibits unfair practices or working ownership and voting of shares. Insufficient or unclear
conditions information may hamper the ability of markets to
function, may increase the cost of capital and result in a secrets, insider trading, and other types of securities
poor allocation of resources. violations

 The purpose of requiring disclosures is to inform the 5. Family Interests

investing public about the performance, similarity of
This is where a child, spouse, or other close relative is
purpose and risks that may be attendant to investing in
hired based on their relation to the director or officer.
the company. For example, an environmentalist would
not feel comfortable investing in a company that invests A conflict of interest based on family relations is called
in mining and engage in practices that contribute to “nepotism”, and can also involve unfair distribution of
environmental degradation. Or, a human rights activist gifts like increased salaries and benefits.
would not invest in a company whose CEO or other
officer is facing a case for sexual harassment. Good Nepotism - the practice among those with power or
corporate governance disclosure, however, typically influence of favoring relatives or friends, especially by
includes voluntary disclosures providing information giving them jobs.
over and above the minimum statutory or regulatory TRADE SECRET
requirements.
A trade secret is a formula, practice, process, design,
CONFLICT OF INTEREST instrument, pattern, commercial method, or
"Conflict of interest" is a situation in which personal compilation of information not generally known or
and/or financial considerations have the potential to reasonably ascertainable by others by which a business
influence or compromise professional judgment in can obtain an economic advantage over competitors or
clinical service, research, consultation, instruction, customers.
administration, or any other professional activity. In INSIDER TRADING
most cases, this involves a breach of the person’s duty
of loyalty to their corporation or business organization. Insider trading is buying or selling the securities of a
publicly traded firm by an insider to benefit from insider
1. “Self-Dealing” information.
Self-dealing occurs when a director or officer It is also called insider dealing.
enters into a transaction with another organization that
benefits the officer to the damage of the company. Insider trading is not always illegal such as the
Conflicts like these are sometimes called “usurping corporate insider is buying or selling his/her own
corporate opportunities” securities. It becomes illegal when stock market
transactions are made with knowledge of nonpublic
2. Issues with Gifts information about corporate activity that might
Many business laws prohibit officers from influence the buying or selling by the shareholders who
receiving gifts from persons with whom the company do not know such information.
does business. Gifts include both tangible items and
non-tangible assets (like transportation and lodging
costs) Core Principles of Good Governance

3. Outside Employment Conflicts 1. Fairness

If a corporate official is employed with more Each decision made requires balancing the
than one company, their interests in one job can’t interest of different stakeholders. Fairness expresses
conflict with those of the other the just and reasonable treatment of the stakeholders,
free from discrimination and according to the rules and
principles of the corporation. Fair practices are able to
4. Confidential Information establish long-term relationships which are critical to
sustain the development of the corporation.
Confidential information can’t be used for one’s
own advantage, especially those relating to trade 2. Accountability
 Each decision-maker in the corporation should to look for the company’s direct competition and
assume complete responsibility to take initiative and be prevent disclosure of confidential information.
answerable for his/her decisions, actions, and
The agreement may include exclusion to approach the
behaviors.
company’s clients for a specific period of time.
3. Transparency
Finance and Accounting (Transparency)
Transparency is the openness and willingness by
Accounting policies deals with how money is
the company to provide clear, factual, and timely
handled in the company and how acquisitions and
information that accurately reflects the financial
liabilities are recorded. A well-managed finance
situation, performance, ownership and corporate
department should have clear guidelines on purchases,
governance of the company.
petty cash disbursements, and recording.
Trust from the stakeholders can be gained only
through transparency.

Stakeholders should be informed about the

company’s activities, its plans in the future, and the
risks involved in its strategies. All these will help
stakeholders have confidence in the corporation.

Common Practices in Business Organizations

Employee Conduct (Accountability)

Employee conduct policy sets the duties and

responsibilities each employee must follow as condition
of employment.

Equal Opportunity (Fairness)

Equal opportunity laws are policies that

promote fair treatment in the workplace. Companies
are expected to advocate anti-discriminatory policies
and encourage unprejudiced behavior within
workplace.

Attendance and Time Off (Accountability and Fairness)

Attendance policies not only outline employees’

responsibility to adhere to work schedules but also
define how employees may schedule leaves and
notification of an abuse or late arrival. It is also the
disciplinary action employees face for compliance.

Computer Use (Transparency and Accountability)

Companies may implement policies governing

the use of computers and internet in the workplace to
limit unnecessary and time-wasting internet surfing and
social media usage.

Noncompetition (Fairness)

Companies require employees to sign a non-

compete agreement that limits the employee’s activity