Chapter 10

Initiatives to Improve
Business Ethics and
Reduce Corruption
 Expected Learning Outcomes

After studying the chapter, you should be able to...

1. Explain why there is a need to improve business ethics.

2. Describe the “ Integrity Initiative Campaign ”.
3. Explain why a Code of Conduct is necessary.
4. Familiarize yourself with the Unified Code of Conduct for
Business a initiated by the “ Integrity Initiative “
organization.
5. Familiarize yourself with the “ Code of Conduct for Business
“ as initiated as endorsed by the Bishops-Businessmen
Conference of the Philippines.
6. Familiarize yourself with the Code of Conduct of Conduct
adopted by Private Companies.
Introduction

Improvement of business ethics is a common

concern of everybody. It is imperative that all
parties involved- manufacturers, sellers,
consumers, government and relevant organizations
must participate in improving business ethics.

Unless there is a concerned effort on the part of

everybody. We cannot effectively remind business
and professional of their ethical responsibility to
each other, to their customers and clients.
The Integrity Initiative Campaign

In 2010, a private sector-led campaign

aiming to strengthen ethical standards in
business. It was organized after the
Philippines received a grant from Siemens.
The Makati Business Club (MBC), and the
Europe Chamber of Commerce of the
Philippines (ECCP) serve as the Integrity
Initiative Secretariat.
 Integrity Initiative

 Is a multisectoral campaign that seeks to

institutionalize integrity standards among various sectors
of society such as business, government, judiciary,
academe, youth, civil society, church and media.

 Hopes to build trust in government, a more equitable

society and fair market conditions.
This will result:
 Improved competitiveness and increased business confidence.
 employed in a vibrant and dynamic Philippine economy.

 The Philippines will become a benchmark.

Need for a Code of conduct

A Code of Conduct is a formal expression of the

organization’s values and ethics.

A Code of Conduct should:

 Guide directors and senior executives, as a minimum, as to the practices
necessary to maintain confidence in the organization’s integrity.
 Promote responsibility and accountability of individuals for reporting
and investigating reports of un ethical practices.
 Ensure compliance with legal and other obligations to legitimate
stakeholders.
 Unified Code of Conduct for Business

One of the most significant accomplishments of the Integrity

Initiative.

The Code’s Purpose is two-fold:

• It harmonizes existing ethical standards among business
operating in the Philippines.
• It formally communicates the signatories commitment to
upholding high standards of ethics in all business
transactions.
 Unified Code of Conduct for Business
Top Management
 Management strongly supports integrity
practices and allocates sufficient resources
for their implementation.

 Our officers strongly communicate our

organization’s position against bribery,
corruption and unethical business practices
within the company.
Human Resources
 In the spirit of fairness and due process, all employees
have the right to file and respond to complaints
against practices suspected to be illegal or unethical.

 Employees filing complaints will be protected from all

types of retaliation, while those involved in unethical
practices will be subject to commensurate
disciplinary actions.

 We have instituted training program on business ethics

covering all levels of the organization.
 Sales and Marketing

 We clearly communicate rules and

guidelines on giving gifts, entertainment,
tokens of hospitality and contributions
to/from public and private organizations
and their representatives.
 Finance and Accounting

 We require all employees to ensure that all books and

records they create or are responsible for are complete
and accurate.

 Our financial records conform to standard accounting

principles.

 We pay taxes in compliance with all laws.

 Procurement

 A track of integrity and compliance with existing

laws is a prerequisite when we vet third party
consultants, suppliers, intermediaries and agents.

 Contracting a third party to bribe or commit

corrupt practices on behalf of the company is
strictly prohibited.
 Logistics

 We comply with laws and regulations pertaining to

supply chain management.

 We do not tolerate any breaches in existing laws in

exchange for undue advantage and unethical
concessions or favors.

 Employees are not penalized for refusing to pay

bribes or facilitation payments even if it results in
failure to meet deadlines or los of revenue.
Implementation and Monitoring

 We will continually to align our operations to the

principles contained in this Code periodically
assess and monitor our compliance to it.
BISHOPS- BUSINESSMEN’S
CONFERENCE

PHILIPPINES-CODE OF
ETHICS FOR THE
PHILIPPINES BUSINESS
Code of Ethics for the Philippine
Business

Issued by the Bishops- Businessmen’s Conference

Philippines is reproduced in this chapter for reasons
of continuing applicability, relevance and significance

to entities doing business in the Philippines.

 PREAMBLE
 This code of ethics has been formulated impelled by the
belief that man has a dignity that must be respected
and that all the resource of the earth has been created
for his growth and development.

 The code seeks to express systematically and professed by

the Philippine Business as its best.

 Finally, it is code for all people.

Those engaged in business should recognize
the following basic concepts:

 All business is essentially an expression of human

relationships.

 The owners, management, the work force, the

suppliers and subcontractors, the customers and
government contribute to the performance of the
business enterprise and are therefore entitled to
receive the proper worth of their contributions.

 The resources employed by a business enterprise

are financial, technological and human.
Those engaged in business should recognize
the following basic concepts:

 Business enterprise has a public responsibility to use all

it’s resources efficiently.

 Competition and incentives are essential for the

maintenance and continuing improvement of the quality of
goods and services of the growth and for the technology.

 In business, as in other institutions of society, any right or

authority enjoyed by or entrusted to business
presupposes, and is justified by corresponding duties,
responsibilities and performance.
Some Principles for the Conduct of
Business

Those responsible for business policy should

consider not only the interest of the owners of
the business, But also the interest of those
affected by the activities of the business.
Towards the Employees

Business shall recognize the unique position of employees as

individuals with a vital stake in their work at the same time
with inherent obligations to their own families and provide:

• For recognition
• For fair recruitment practice
• For job security
• For a safe and healthy atmosphere in the work environment.
• For condition
• For participative
Towards the Customers

Business shall, in production of goods and services:

 Strive after a quality

 Avoid anything that would be detrimental to the

health, safety or growth.

 Seek to apply or make us of the discoveries and

inventions of science.
Towards the Customers

In this marketing arrangement, business shall:

 Driver the product or service in the quality, quantity

and time agreed upon.
 Establish an after-sales and the complaints service
commensurate.
 Ensure that all mass media, promotional and
packaging communications be informative and true.
Towards the Suppliers

Business shall ensure:

 That the terms of all contacts be clearly stated and unambiguous

and honoured in full unless terminated or modified by mutual
consent.

 That abuse of economic power in dealing with a smaller concern

avoided and that, in all cases, terms of payment be strictly and fully
observed.

 That no supplier be encouraged to commit his recourses for

apparently long-term purposes unless there are reasonable
guarantees that the orders, he receives from the business enterprise
will not be terminated arbitrarily.
Towards the Owners and other Providers
of Capital
Business shall:
 Provide an adequate rate of return to those contributing capital
to the enterprise and ensure the security of their investments.

 Use their financial resources to provide goods and services

responsibility and efficiently.

 Furnish the owners and other Providers of Capital with such

information as they may reasonably require, provided that it
does not adversely affect the security or efficiency of the
business.

 Peruse the specific objectives of the owner and other Providers

of Capital provided that it does not run contrary to any of the
principles stated herein.
Towards Society in General
Business shall recognize in their decision- making the interest of
the general public and realizing that they are utilizing to an
important degree the nations resources shall:

• To take regular stock of their response to the basic needs of society

• Do their best to ensure that the way they deploy their resources
benefits society in general.

• Pay proper regard to the environment and social consequences of

their business activity.

• As corporation citizen make such contributions.

Towards Society in General
• Consider the human and social costs of mechanization and
technology.

• Establish a policy allowing employees, within reasonable limit,

to contribute to the public and community services during the
work time.

• Establish a policy regarding conflicts of interest based on the

principle.

• Not tolerate any form of illegal data- gathering or any form of

inducement that tends to distort normal commercial
judgement.
Survey’s of Laws Advocating Business
Ethics

 RA 7394 - “The Consumer Act of the

Philippines”, approved on April 13, 1992.

 RA 3720 – “The Food, Drug and

Cosmetics”, approved on June 22, 1963.

 RA8293 - “The Intellectual Property Code

of the Philippines”, effective January 1,
1998.
The Intellectual Property Riights Law
covers

1) Trademarks and Services Marls

2) Geographic Indications
3) Copyright and Related Rights
4) Industrial Designs
5) Patents
6) Lay-out Design (Topographic) of Integrated Circuits
7) Protection of Under
END OF CHAPTER 10

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