i CHAPTER 8 1 | = / _. ©00D. GOVERNANCE AND OF GVMICS... uu. “Where do the evils like corruption arise from? It comes from the never- ending greed. The fight for corruption-free ethical society will have to be fought against this greed and replace it with ‘what can I give’ spirit.” —A. P. J. Abdul Kalam The learners shall be able to: 1. Explain the basic concepts and elements of good governance; 2. Appraise the importance of ethics, values and morals in governance; 3. Assess the different individual and social influences on ethical behavior; 4, Write policies on ethical practices in a code of ethics; and 5. Create a code of conduct based on given characteristics. * Governance describes the overall management approach through which senior executives direct and control the entire sing a combination of management ipformation and hierarchical management control structures. Governance activities ensure that critical management information reaching the executive team is sufficiently complete, accurate and timely to enable appropriate management decision making, and provide the control mechanisms to ensure that strategies, directions and instructions from management are carried out systematically and effectively. organization, u: Good governance is an ideal concept which is difficult to achieve in its totality. Governance typically involves goodhearted people who bring their ideas, experiences, preferences and other human strengths and shortcomings to the policy-making table. Sod ‘ough continues discussion so that all of governance is achieved thr the considerations involved in assuring that stakeholder’ interests are addressed and reflected in policy initiatives. 83ee Ce ee a ae CONCEPTS OF GOOD GOVERNANCE e concept of good governance has become a buzzworg prod the world in eae times. Currently the term ae has become synonymous to sound development manage me me the mid-1980s, the term governance only emphasizes on s Fs erence to the rule of law. After the fall of the Soviet Union and the cone lusion, of the Cold War, governance as a word has been used to ne the reinventing of public administration, mostly on those deve loping counties that are open to the needs of globalization. 3 The concept of “governance” is as ancient as government itself. Both governance and government came from the French word “gouvernance” which means the act or manner of government. The government word later in the mid-16th century meant “system by which something is governed”. In the 18th century after, it came te develop the meaning asa “governing authority.” However, gradually by the 19th century, the word “governance” was considered an outdated word that was hardly used as a political term. Yet, during 1980s under economic reforms particularly with the advent of globalization, governance again became a very popular word. This time the focus is on the process and the sty le of governing towards the idea of sustainable development. Organizations such as International Monetary Fund (IME), Non-Government Organizations (NGOs), the United Nations (UN) and its agencies as well as World Bank and other international institutions started to use the word “governance” in a lot of ways. The term “good governance” then became a catchword of policy and governmental improvement particularly in developing countries which rely most of their Supports from the mentioned international development agencies, Basically, good governance in its i i . , Seneric approach is the efficient, transparent and equitable del i i q ivery of goods and services bs eo as the Policy-making by means of exercising authority. ‘ood governance is a normative Principle that offers well-managed and well-allocated Tesources to provide the collective Provide the needs to Me « 84« Corporate Sociat Ps al Responsibility and Good Governance in the Millennial Age * Serrano Jt is good governance that is required of a democratic platform to avoid corruption, offers rights, the ways and the capability to create decisions that touch the lives of every individual and make every organization accountable for what they had decided to do. ; Good governance as a principle denotes an approach in administration that could be applied in internal operations of both public and private sector organizations. Good governance is receptive to the present and future needs, of the organization. Here, the decision-making strategies of the organizations incorporate the principle of good governance so that shareholders’ and stakeholders’ interests are accounted and assured. Basic Elements of Good Governance Mainly, good governance is a way of systematic governing established in justice and peace with the intention of safeguarding rights and freedom of every member of the society. The assurance of minimized corruptions, the accounted views of the minorities and the protected rights of the most vulnerable in society are all considered in good governance. Here are the basic elements of good governance to understand its concept more: Rule of Law + Good governance requires the rule of law. Rule of law is the protection of human rights and civil liberties particularly those of minorities by the independent, unbiased and principled law enforcement agencies. It is exemplified by autonomous judiciary workers such as lawyers and judges, good legal framework, equal access to justice, incorruptible police force and tested dispute mechanisms among others. ule of law, the absence of governance in to political instability and widespread e severe consequences on the investment Jar are affected by such bad governance. Biased rules and unethical practices in the public sector means added costs of doing business and new business entrants as well as contract- bidders are discourage to provide fair and healthy competition. Inthe corporate world, members of the board should-be fair and impartial In the context of ri a country may give rise corruption that could hav climate. Businesses in particu 85Corporate Social Responsibility and Good Governance in the Millennial Age * Serrano: in their collaborations and in their dec! jon-making, in practice of 4 rule of law. Good corporate governance entails boards to perfoy their duties and responsibilities ethically, honestly and with the highest integrity. ‘Transparency Good governance requires transparency of the decision. making process to make certain that information is easily and freely obtainable to those who will be affected by such decisions as Well as the outcomes resulting by the decisions taken. This information should be provided in an accurate and easily understandable forms normally interpreted through the media so that readers get a complete view of the issues. In addition, any decisions taken ang their implementation must be in obedience with recognized rules and regulations. In the business sector, transparency can earn a level of trust in winning over shareholders, employees, and the general public. Trajisparency means making sure everyone is aware of what is going on throughout the organization at all times. Applying transparency in the workplace offers a lot of advantages including speedy problem solving, healthy employer-employee relations, enhanced teamwork and trust leading to better productivity. Records and processes are transparent and available to shareholders and stakeholders in the practice of good governance. There must be neither inflation nor exaggeration in reporting the financial health of the company. Financial records and findingsshould be reported to shareholders and stakeholders in an understandable and easily interpreted manner. Revealing salaries of employees throughout the organization is a transparency practice that shows a level of fairness which could reduce employee frustration and boost their morale. Letting employees know the determinants of their pay structure will make them understand more about compensation differences in the company. These days, a lot of companies have taken the advantage to boost transparency at the workplace. They have replaced complex 864 - - - oe - ~ Corporate Social Responsibility and Good Governance in the Millennial Age + Serrano ment of cubicles, rchies and adopted holacracy. As a replace managers as well hiera en floor spaces that housed executives, there are OP' as employees: Responsiveness Responsiveness is a requirement in good governance. Responsiveness simply means that organizations and their processes need to be planned in a manner that serves the best interests of all stakeholders within a practical and realistic period of time. v Responsiveness is the combination of two inseparable elements which are value and speed. Value is any information in the form of questions, data, insights, research, context, case studies and so on that a company can offer, and that allows its buyer in moving loser to making a decision. Speed, apparently, is the time it takes to give the demanded information to a customer. e world is faced with numerous crises and controversies and become unconscious of time. In the practice of good governance, companies must always find time to better communicate to shareholders and stakeholders within a sensible time period to provide honest answers to these crises and controversies in order to provide direction to the organization. Sometimes the corporat tical in the workplace and the lack Responsiveness is very cr leave valuable of it may cost real money. A delayed response may’ 1 rces idled without direction on how to move forward. In business, even spam e-mail, unsolicited phone call or direct mail item received should be provided response immediately especially when the person is known, and the inquiry is reasonable. resou! Consensus Oriented quires knowing the broad consensus about the best interest of the entire stakeholder group and how this can be achieved in a practical way. Reaching this consensus means seeking the many different needs, perspectives, and expectations of a diverse of people. Making decision through consensus manner allows a group to produce a ‘solution greater than any one member could reach alone. The consensus process necessitates commitment “Good governance Te 87Corporate Social Responsibility and Good Gavernance in the Millennial Age + Serrano and patience, but the resulting decisions are better, more Cffectiy, and, in the long term, more time efficient. A consensus decision depends on the assumption that eve individual's input is valuable and significant to the final Solution, Occasionally, it may be challenging to attain shared understandin but valuing each and every input is vital to the decision-makin, Process. With all the opposing viewpoints and different Personalities in the company, assisting group decision making is easier said thay done. Inside the boardroom a lot of robust discussions and debates happens which is normally expected. Most of the times, these intense and heated debates would generate the best consensus because of varying perspectives from diverse representatives of broad backgrounds and experiences. Equity and inclusiveness Equity and inclusiveness is based on the idea that all members of an organization or society must feel the sense of belongingness and must not have the impression of being excluded from the typical group. Those individuals and groups that are the most vulnerable must also feel the same and should have opportunities to improve or maintain their well-being. + Inclusivity means individuals are expect to be treated with respect, dignity, collegiality, and kindness. Each member of an organization can and should use their voice to share their experiences, opinions and philosophies to enrich and extend discussions. No one should feel that they do not belong or feel that their opinions have less significance compared with oth ‘ers. Employees feel being included when they experienced both: 1. Asense of uniqueness that they are acknowledged and appreciated for their specific attributes a ind contributions, A sense of belonging that they are received and treasured 25 member of their workgroups and among their coworkers. 88Corporate Social Responsibitity and Good Governance in the. Millennial Age « Serrano Employees on the other hand, experience a sense of exclusion when they feel: 1. Degraded, dismissed, or discounted for the exceptional qualities they bring to the company. 2. Treated like outsiders because of their differences such gender, race/ethnicity, nationality, age, religion, sexual orientation, and, in some cases, job role or formal position of power. Effectiveness and Efficiency Effectiveness and efficiency is vital in good governance. It is developed by making sustainable use of resources to create advantageous results to meet the needs of its stakeholders. Sustainability means guaranteeing social investments are carried through and protecting natural environment, human and ecological health for future generations while driving innovation and not compromising people’s way of life. Everyone in the organization from the lowest ones to top management including the board directors must be responsible in conducting their duties effectively and efficiently. Material resources and time are the concerns of effectiveness and efficiency. Majority of companies also reflect the effect on the environment of their operations as they accomplish their duties and responsibilities. A very good example of effectiveness and efficiency is the trend of automation. Automation is the shift from manual paper processes to software solutions. Accountability 4 Accountability is a key requisite of good governance. Institutions such as government agencies, civil society, and the Private sector ought to be accountable to one another as well as to the Public and to their institutional stakeholders. Who is accountable for whatever decisions or actions should be documented in policy statements. Generally, an organization is accountable to those who will be affected by its decisions or actions whether they are internal Or external to an organization. Accountability also extends to the applicable rules of law which could be violated in the course of the ’ 89a Corporate Social Rt Millennial Age * Serrane octal esponsiitty and Good Governance ine jittennial Ag rporat i ntability cannot implementation of the decisions oF actions. Accou' y be enforced without transparency [00 . sad th ility i e' srnance best practice in many othe; Accountability is a key gove prac eee aspects. of business and social life. The accountability ot le pes a directors for instance, extends to ed groups a See Sein ers, lors, em the shareholders, stakeholders, ven e Me public who may be affected by their decisions and actions Participation Participation in good governance requires equal Pe by all groups with everyone having a role in the process 0! ‘ cision making, either directly or through legitimate represental tee Jn participation everyone must be informed and organized. It consists Prithe freedom of association and expression. In general, it needs attentive concern for the best interests of the organization and society especially for those most weak and helpless. Good governance these days gives emphasis on the importance of combined men and women perspectives in decision- making. Historically, the top management is mainly composed of men. Today, a lot of companies have recognized the importance of having gender and ethnic diversity in the workplace. Even in the company boards, women and members of ethnic groups to their boards are increasingly added for the purpose of diversity. Tough, well-composed boards embrace.a diversity of people, skills, talents, abilities, experiences and perspectives from both gender and the minorities. ETHICS, VALUES AND MORAL IN GOVERNANCE Governance is vital on ho i . ‘ Ww organization: other and its stakeholders. With a lot of changes im naee eal ings, governance requires a highly competent, well-ink Gand concerned administration, a ___ Ethics is about directin, of right and wrong that tel 'g human conduct using the standards rights, obligations, bene! lls people what mu: t : v ist be done based on fits to society, fairness, or specific virtues. TheCorporate Social Responsibility and Good Governance in the Millennial Age « Ser . + Serrano objective of ethics is to ensure good governance especially in ous countries where there is a spread of democracy. ’ ; vari Values are an individual's judgment or standard of behavior. hey are another individual factor that affects ethical behavior. Jo some people, acting in an improper way is just a part of doing pusiness- Would you feel that it is ethical to make up lies about your competitor just to win a contract? Some people's standard of behavior will feel that lying for a business financial win is not unethical. Morals are another individual characteristic that can affect an individual's ethics. Morals are the rules people develop as a result pf cultural norms and values and are, traditionally, what employees jearn from their childhood, culture, education, religion, and others. They are usually described as good or bad behavior. The over-all objective of morality is to guarantee good governance with primary regard for moral values, practices and behavior. These moral values are taught in an individual by his parents, teachers, religion, society and the environment of workplace. In the Philippines today, an increasing number of Filipinos are becoming educated, progressive and aware of their rights. Good governance cannot be successful in the absence of ethics and moral values. It is said that ethics and moral values can bring good governance and maximum public welfare. Therefore, government and private sectors must employ and promote ethical practices in management. INDIVIDUALS INFLUENCES ON ETHICAL BEHAVIOR There, are several individual and situational factors that may affect a person’s ethical behavior at work. The likelihood of an informed and ethical decision is based from a lot of information about a person and the circumstances. Here are some of these individual and situational factors, namely: a1+ Serrano 5 Corporate Social Responsibility and Good Governance in the Mittenniat Age * Se es Individual Factors Affecting Ethics ad behavior from good is ethics. Ethics jg sod and continue until a person factors that when a What defines bi formed starting from early childhood ane becomes an adult, There are several individual person makes decision, all these factors unite. In the workplace, ethics works well and in consistency with the manner the busines world sees morality and values, dh ees, ethics is responsible for regulating the daily conduct of employ ; i these behaviors. ‘The individual factors that determine the ethical standards of a person consist of the following: 1. Stages of moral development - Moral development is the process Wherein children are able to develop their right attitudes and on how to treat other people in the society founded on social and culture norms, rules and laws. As discussed in Chapter 2, it was Lawrence Kohlberg who offered a framework on how children form moral reasoning through a series of six key stages. Although, in reality the development of morality differ in every individual and culture. behaviors 2. Personal values and morals — The ethical standards of people are influenced also by their individual values and morals. Locus of control is an important variable that affects ethical behavior. Locus of control is a concept in psychology that concerns how intensely people consider they have control over the situations and experiences that influence their lives. A person with an internal locus of control is confident that he controls all the events in his life. While a person with an external locus of control has the bet that either fate or luck or could be other people affects is life. 3. Family influences - Everything starts from the family, so they say. Children form their ethical standards based from their perception of their parent's behavior. When children see theif parents and other members of the family observe high ethical standard, individuals are more likely to also embrace high ethical paras i laren see their parents and family ‘members unethical behaviors, ikel develop low ethical standards, miotly Minky at they ros 92nN 2 Corporate Social Responsibility and Good Governance in the Millennial Age » Serrano Peer influences — Peers are those coworkers who are always around during the conduct of operations in the workplace. Sometimes an individual's decisions in life are influenced by the behaviors and attitudes of peers. These behaviors and attitudes of peers are vital in ethical decision making. Hence, establishing good relationships with coworkers should be established by an employee. There will be a harmonious workplace when there is a good relation among coworkers. This type of workplace will surely lead to success in attaining both the employees and the company’s goals. Life experiences — Life experiences of people help them evaluate whether their behaviors and attitudes are ethically correct, incorrect or acceptable. These experiences help individuals discover possible bases of moral obligations that consist of God, human reason or the goal to be happy. These experiences in life also serve as guide to actions for individuals and groups that form their principles of right behavior. Social norms — ethical behavior could also be defined through local customs and traditions in a certain culture. What is normally acceptable in one culture could be absolutely forbidden in another. Culture differs from one country to another and so are ethical practices. For instance, when Filipino children who have been conservatively raised go to other countries as immigrants, they quickly embrace the social norms of other nations. Religious beliefs — Most faith believes in life beyond death. The theme of judgment in the afterlife is a shared belief among It is the belief that good deeds while on earth most religions. afterlife. are rewarded and bad deeds could be penalized in the Commonly, the Ten Commandments serve as the moral codes for which to live by in defining good deeds for most religions. Obeying the commandments seriously is an important factor for a person to define his overall ethical behavior. A person’s upbringing also defines his ethical who were raised in a loving, non- and act ethically. People al family are likely to Upbringing - behavior. Generally, people violent home environment tend to show who were raised in an abusive, dysfunction: demonstrate unethical behavior during their adult years. 93a 9. Laws - Laws, and a person abiding by them, are ethicaly, influential. Many people do not break the law because of the fear of being prosecuted and punished. In the Philippines, most laws determine how people should behave ethically. The levg, of crime done dictates the level of punishment to be given. person who shoplifted may go to jail and this act makes him be discouraged to repeat the action. SITUATIONAL INFLUENCES ON ETHICAL BEHAVIOR With the intent to have a fair basis for judgments or action, one looks to personal ideals of what is appropriate to guide them, rather than an unchanging universal code of conduct, such as Biblical law under divine command theory or the Kantian categorical imperative. Basing ethical behavior from the situation means going against a principle and instead making use of a comparable reason which would justify it, There are two main situational factors that could influence ethical behavior and decision-making. They are explained fully below. Issue-Related Issue-related is the importance of the decision to the decision maker. Moral Intensity When facing with conflicting ethical demands or differing ethical values in very difficult situations, moral intensity is severely vital. The higher the intensity, the more likely it is that the decision t an ethical rather than an unethical deci: Ir instance, a person promised his friend to provide cman ‘o jaye PProaching test, but another friend in the midst of an eenotional disturbing situation is also seeking guidance. In the process of deciding who to prioritize between the two challengin ethical demands, moral intensity is a big factor. The urgency of the problem being faced, the time element needed to provide the help’ id the comparative ethical sensibilities are Part of the moral tence 94Moral intensity i ear ranee, is the amount that people observe an issue as ces On moral intensity include magnitude of consequences, social consequene i 5 i "e, concentra! er aeaisey and eae tion of effect, temporal 1. The magnitude of consequences — or benefits that could be impacted action. This is the sum of the harm as the consequence of a given 2. The social consensus - It is the degree that members of a society approve that an act is good or bad and the possibility of effect is the increase and decrease of moral intensity based on how likely people consider the results are. 3. Temporal immediacy ~ This is the distance between the time an action happens and the start of consequences or the soonest the results of any effect are likely to take place. 4. Proximity -This refers to the emotional intimacy the decision- maker feels to those disturbed by the decision. . 5. Concentration of effect — It is to whether the effect is focused on a few people or may affect a lot people in a small extent. Another illustrative case is the disagreement on the principles of professional code of ethics faced by building contractors who are mostly engineers and architects. Most often in the construction industry, the conflict is between the safety and welfare of the public and working within the budget of the contract. Engineers and architects find themselves trapped in these competing ethical demands. Once more, the moral intensity of the situation is a significant consideration. The situation becomes more challenging when it is expensive to consider the impact of the project to the public. Thus, the pressure is more remarkable. sue, the moral intensity is always associated with different value systems may have very ral intensity of a dispute. For example, he environment as valuable may regard to deforestation as high moral ho do not consider too much Within an i: to values. People different opinions of the mo individuals who appreciate t the decreasing number of trees due intensity issue. While those people w! 95Z Corporate Sociat Responsibility and Good Governance in the Milennial Age « Serrano Cutting of trees as unethical would just ignore the topic except when, they become the victims of the consequences. The source/s of ethical disagreements could only be appreciated when people are trained in pinpointing the moray intensity of a condition. Possibly, the conflict can be due ty differences in the values people considered to be related to the issue, It could also be that the moral intensity of the ethical issue may be of help in developing ones understanding of other cultures as a basis for ethical disagreements. Besides, identifying the specific nature of the disagreement, the source of the disagreement could also bette, appreciated by the disputing groups. Below is an example of this ethical disagreement. ‘Special Bombing Mission No. 13 When the atomic bomb was dropped on Hiroshima, the plane crew were silent. Captain Lewis uttered six words, "My God, what have we done?" Three days later another one fell on Nagasaki. About 152,000 were killed, many times more were wounded and burned, to die’ later. The next day Japan sued for peace. When deciding whether to use "the most terrible weapon ever known" the US President appointed an Interim Committee made up of distinguished and responsible people in the government. Most but not all of its military advisors favored? Using it, Top-Level scientists said they could find no acceptable alternative to using it, but they were opposed by equally able scientists. After lengthy discussions, the committee decided that the lives saved by ending the war swiftly by using this weapon outweighed the lives destroyed by using it and thought that the best course of action. Source: https:/len-wikipedia.org/wikilSituational_ethi Moral Framing A frame of reference, or point of view, refers to the way people look at a given situation. How a person views that situation can affect his appreciation of the facts and may affect how he determines right from wrong. A big problem in moral framing is the use of language in which moral issues may be made to appear harmful if described ina certain manner. The power of framing is not what is being said, 96Bee r Corporate Social Responsibility and. Good Governance in the Millennial Age « Serrano put how it is said. Sometimes it might have an even stronger effect on reasoning. Hence, moral intensity could be perceived by people differently in different organisations. It is when morals are conferred openly that decision-making, can possibly be more ethical, Normally, the use of moral words helps in framing because they lead to ethical decision making. Although, many businesses hardly make use of moral words that’s why often ethical decision-making suffers. This is called “ moral muteness”. ; Moral muteness usually takes place due to some concerns on perceived threats to: 1, Harmony -~ This is the belief that moral talk wor n uld encourage conflict and retaliation, 2, Efficiency — It is about the belief that moral talk could cloud issues which leads to a more time-consuming decision-making. 3. Image of power and effectiveness — Managers consider that their image will be hurt if they would be seen as someone idealistic or making decisions for ethical reasons. Context Related Sometimes ethics take into consideration the particular background of an act when evaluating it whether right or wrong, rather than judging it based on absolute moral standards. This is known as context-related situation in ethical behavior. Here are the . factors under it, namely: 1. Reward — Putting into practice ethical principles and standards may possibly be repeated and become contagious throughout the organization when appropriately recognized and rewarded. Ethical decision-making can be affected when the basis of the reward is achievement. When unethical behavior is left unpunished or even supported by the company, there is a great tendency that unethical decision-making would increase. Often, the morality of a certain act in the company is dictated by people in top management. 97Corporate Social Responsibility and Good Governance in the Millennial Age + Serrano 2. Y Authority - Subordinates are likely just to follow instruction, from their superiors. On the other hand, middle managers obe, orders from their seniors. Hence, when senior managers creaty unethical decisions, their juniors are just expected to conform, There are several instances that senior managers also initiat that an unethical decision-making is tolerable in the workplace, Subordinates even fear possible retaliation from top leaders when they disclose unethical conduct being practice inside the company. Bureaucracy - In an organization that has a bureaucratic set-up, most employees are likely to follow rules instead of reflecting about the ethics of decisions created. The more bureaucratic an organization is, the lower is the ethical decision- makin, involved, though sometimes it would depend on authority. There are several negative effects of bureaucracy on deciding ethically which could be in the form of suppression of moral autonomy, instrumental morality, distancing and denial of moral status. Work Roles — Work roles usually consists of a complete set of expectations of what to value, the manner of relating to other people and the approach of displaying behavior. While some employees elect to put more effort into their work when they are being closely observed, they are ethically obligated to contribute 100 % strength to their job whatsoever. Organizational Cultures — The norms of the group often define the standard or satisfactory behavior in an organization. This could mean that even an unethical behavior may be considered ethical if the group is amenable to it. For instance, while bribery for many is non-acceptable, if a company considers it pleasing then it would turn to be ethical. Hence, every member of the group would participate into such activity. National Context - Every country practices different ways of ethics based on its culture. Culture is the basis for a decision to be considered as ethically right or not. Notwithstanding the nationality of the person making the decision, the concern is the country where the decision-making is happening. Thus, thet will be differing views of what is right i ight and wrong depending 0” the shared values of the country. eeeoe we Ey Corporate Social Responsibility and Good Governance in the Millennial Age = Serrano CODES OF ETHICS Codes of ethics govern decision-making when eonteunied ith ethical dilemmas or questionable issues. It is often referred as wi Jue statement of a company designed to assist professionals in i a business fairly and with integrity. It works similar to the Constitution with general principles to direct behaviour as well as outlining a set of principles that influence decision-making. Aco « of ethics may include areas like business ethics, a code of professional practice and an employee code of conduct. Codes of ethics are commonly used in the business and professional perspective to guarantee the public thi and members of regulated professionally satisfactor and publishe: at corporations Professions are acting in a socially and Y manner. Organizations with a recognized d code of ethics have prepared review processes and appeals procedures to protect against spiteful or self-centered use of the code for individual benefit. Possible termination or dismissal from the organization may be the result in breaking the code of ethics. A code of ethics is imperative because it openly outlines the rules for behavior and offers the basis for a preventive cautioning. Here are some exam companies when creatin; practiced inside the orgai ples of code of ethics that may assist 8 Policies on ethical practices that must be nization: 1. Employee code of conduct — framework of policies founde company requires all employe of industries have conflicting 1 govern a company’s code of et! own intergrity-based Policies a: A business code of ethics is a don laws and values that a es to follow to. Different types egulatory requests that partially hics, All companies can set their part of the company brand. Confidentiality and privacy policies - A lot of days have been targets or has become Customers’ personal information or proprietary data. In order to handle Properly customers’ private information, employees need to be required to preserve confidentiality as an ethical practice, Similarly, the company’s secrets should also have the same companies these victims of hackers who steal Fee 99Corporate sociat Responsibility and Good Governance in the Millennial Age + Serrano Privacy treatment. Professional appearance policies ~ A dress code or dress pof; can also be made as a requirement. Numerous service Providers require uniform shirt for their employees. Those employees Who work as account representative may be obligated to wear a suit and tie. Most companies would allow their employees to Wear business casual during Fridays. As part of the policy employees clothing must be clean and pressed to look more presentable and Professional. 4. Promoting green business practices— Promoting green and being environment friendly is a sound business practice. Regulating Paper use in addition to recycling, proper disposal of waste are ways of being friendly to the environment. At the same time, compnies particulary those involve in manufaturing shoulf follow specific environmental standards of safety for people, animals and the environment. 5. Obeying the law — Obviously, complying and abiding the law is a mandatory ethical practice. Certainly, employees must follow the law althroughout their stay in the workplace to protect their company’s image. 6. Caring and consideration policies - Businesses must not allow their consumers to feel that they are just after profit, Cnsumers are often flooded with sales pitches everyday. Companies should create as part of their code of ethics that employees should reflect a caring, considerate manner atmosphere to customers. Employees must be trained to be helpful and sympathetic staff, Key Components of Codes of Ethics in Business When writing a company’s code of ‘ethics, the legal, compliance, value-based and violation of codes of ethics components are important in defining and running a company successfully. Here is the discussion of these components: 1. Legal issues - Besides expressing to all employees that they must follow the Jaw, this needs to be documented, In any business organizations, employees should follow local and national lawS- 100Corporate Sociat Responsibity and Good Governance in the Millennial Age « Serrano Although, there are some ind, have legal requirements, B, screened for money |. reviews when they employees must kni may subject them t ‘ustries or particular professions that ‘ank employees for instance are being laundering. Drivers too are subjected to apply for driver's license. In the code of ethics ‘Ow those specific rule-breaking scenarios that ‘0 immediate disciplinary action. Compliance and regulations ~ Most industries follow certain legal requirements. They are expected to shoulder fines and penalties, and face potential legal action once there is failure to conform to the rules. In the Philippines, there are highly regulated industries such as the financial, energy and telecommunications sectors, which are bounded by tight regulatory systems. Value-Based Components - The code of ethics normally embraces the six universal moral values that companies expect of their employees. These values consists of bei ig, trustworthy, respectful, responsible, fair, caring and good citizens. Besides these values, companies may also embrace diversity, being environment-friendly or dress codes. It is vital to take in all things necessary in successfully accomplishing the mission and vision of company. Violation of the Code of Ethics - It is important to address also in the codes of ethics the action to take in cases of violation. The process as well as the possible disciplinary actions resulting from a specific violation must be clearly stated. Obviously, these disciplinary actions must always be fair and justifiable for the violation. Codes of Ethics Categories A code of ethics is a set of principles and rules used by companies, professional organizations and individuals to oversee their decision-making in selecting between right and wrong. -The Principles behind writing the codes of ethics for companies are under two basic categories of compliance-based and value-based. Here is a brief discussion of the two types: 101nial Age * Serrano & Social R sont ana cova covernanenin ee Mile ‘orporate Social Rest Compliance-Based Code of Ethics - of ethics is based on specific rules and individua serving Of personal distinct consequences instead of individual obs vi He He ronal behavior. Thus, even with ea ‘s oe a age envincninn janct o des of conduct do no compliance-based codes ; of moral responsibility inside the company Compliance-based code of ethics increases regulation and aes offenders by giving explicit examples of what is are and articulates to employees what behavior is standard and w at j a Hence, it does not only set guidelines for right manners but also define penalties for violations. This type of code In order to guarantee that the purposes and philosophies of the code of ethics are strictly monitored, some companies engage the service of a compliance officer. A compliance officer simply keeps up to date on the various chages that may happen in regulation codes and also observe employee conduct to promote conformity. This is true with the banking industry which is govern by specific laws on business conduct. Usually employees are trained formally to learn the rules of conduct. Value-Based Code of Ethics A value-based code of ethics addresses a company’s core value system. It may shape standards of accountable conduct as they communicate to the larger public good and the environment, This code of ethics may necessitate a greater degree of self-regulation than compliance-based codes. It also defines a company’s guiding values and permits the employee to ma ei i and pe ploy to make their own interpretation of those Some codes of ethi comps codes of ethics cover language that addresses both ’s. For example, create a code of ethi ple, a grocery st. ain !-mi and ae ethics that adopts the company’s ee might chain mig oetions more than financial advantage Teg nee ght also take in a statement about declining t at grocery (0 deal wil suppliers that nouris| rish hormones to li oe . te cruel living sittaeaee © livestock or nurture animals in 102 | | |Corporate Social Re sPonsibility and Good Governance in the Millennial Age + Serrano CODES OF CONDUCT Codes of conduct govern actions. A code of conduct defines how a company’s employees should act on an everyday basis. It reflects the organization’s day-to-day operations, ee Rae and the general company culture. Moreover, a code is a vital guide and reference ae employees to support routinary decision-making. a ae eee to manage ethical dilemmas they , It is often referred to as the meat and potatoes to the code of ethics. Simply, a code of conduct applies the code of ethics to a multitude of applicable circumstances. For instance in a company, a specific rule in the code of ethics is to obey thé law. The code of conduct may offer a list of some definite laws relevant to diverse areas of organizational operations, or industry, that employees must ollow. Irrespective of whether an organization is officially required to have a code of conduct such as public companies are, all organization ought have one. A code is valueable as an internal guideline and at the same time as an external statement of corporate values and commitments. The code of conduct contains definite behavior that are ned as a condition of continues engagement in work. Sexual harassment, racial coercion or viewing unsuitable or unapproved contént on company computers are some probihited behavior inside any company. Numerous control measures have been placed to help companies to be free from scandalous situations which in turn made a lot of organizations have a healthier work environment and reputation. necessary or bai A well-written code of conduct explains an organization's mission, values and principles, connecting them with standards of professional conduct. The code expresses the values the aoe needs to adopt in leaders and employees, thus defining, ene behavior. Consequently, written codes of conduct to" or yardsticks against which individual and organizational pe! can be quantified. 103a7 o— = Wo ein tho miutenniat AGS * Serrano Corporate Social Responsibility. and Good |Governanc’ ‘ to the organization it difficult to write a great 5 often fall short, understanding no matter are certain distinctive ies find it their code: an in-depth jon. Neverthel codes of conduct shi of conduct is many compa” nsequence, Every code represents. Howeve code of conduct and, as a cons Writing a great code of conduct nee of the company, its culture and Vv the nature of a company, all great characteristics. A great code of conduct is: it is simple to understand and does not 1. Written for the reader ~ 1 gal terminology. contain any technical or le ive — It covers all significant details that may 2, Comprehens ployees and answers common influence the daily lives of em questions that arise. 3. Supported by leadership - It has been recognized and ratified by the company’ssenior management team. Thisis usually confirmed in the form of a foreword written by the Chief Executive Officer (CEO) or President. 4. Accessible - It is available to all empl i sible loyees, current invest: potential investors. P storsand 5. Visually appealing - It f i vee ly appeals ‘6 follows a style that is clean and reflective Sn tha Pivot - con duct and tee Republic Act (RA) 6713 spelled out the This eto be ical, Standards for public officials and employe the government peernd Wee being a public trust” pr incipe in - This Act expres: ivi ancl and rewards for those who have shoven mene ee ce aaa > service. This Act also enumerated th cts and tr ei , ose forbiddey ay i nai pee Iles for ta es ¢ fi nsactions and theif “quivalent penalties for those who wou id violate.rer is sand ng of Direction: Read the case study and do the things required below it. Disney & McDonald's Linked to $0.06/Hour Sweatsho Source: http:/howw hat tford-hnwp.comfarchives/54/103.html p in Vietnam Seventeen year old women are forced to work 9 to 10 hours a day, seven days a week, earning as little as six cents an hour in the Keyhinge factory in Vietnam making the popular giveaway promotional toys, many of which are Disney characters, for McDonald's Happy Meals. After working a 70 hour week, some of the teenage women take home a salary of only $4.20! In February, 200 workers fell ill, 25 collapsed and three were hospitalized as a result of chemical exposure, Background Included in the Happy Meals sold at McDonalds are small toys based on characters from Disney films. According to McDonald’s senior vice president Brad Ball, the Happy Meals characters from the “101 Dalmations” movie were the most successful in McDonald’s history. Ball adds, “As we embark on our new global alliance, we anticipate ten great years of unbeatable family fun as customers enjoy ‘the magic of Disney’ only at McDonald’s”. Located in Da Nang City, Vietnam, the Keyhinge Toys Co. Factory employs approximately 1,000 people, 90 percent of whom are young women 17 to 20 years old. Overtime is mandatory: shifts of 9 to 10 hours a day, seven days a week, Wage rates average between six cents and eight cents an hour--well below subsistence levels. Overcome by fatigue and poor ventilation in late February, 200 Women fell ill, 25 collapsed and three were hospitalized as a result of exposure to acetone. Acute or prolonged exposure to acetone, aCorporate Social Responsibitity and Good Governance in the Millennial Age + Serrano dizziness, unconsciousness, damage to chemical solvent, can cause ycam throat and skin irritation, the liver and kidneys and chronic eye, nose, All appeals from local human and labor rights. groups continue to be rejected by Keyhinge management which refuses to improve the ventilation system in the factory or remedy other unsafe working conditions. Along with demanding forced overtime, Keyhinge management has not made legally mandated payments for health insurance coverage for its employees, who now receive no compensation for injury or sickness. Many of the young women at the Keyhinge factory making McDonald’s/Disney toys earn just 60 cents after a 10 hour shift. The most basic meal in Vietnam--rice, vegetables, and tofu--costs 70 cents, Three meals would cost $2.10. Wages do not even cover 20 per cent of the daily food and travel costs for a single worker, let alone her family. Questions to ponder: 1. What failure does McDo has towards its outsourced employees in Vietnam if any? Use the situational influences on ethical behavior. 2. Doyou think culture hasan influence on how Vietnamese workers were abused as employees? Defend your-answer. 3. If you are given the chance to solve this sweatshop problem, how would you do it? Explain briefly your answer. 412