should every listed company have an ethics officer?
TRANSCRIPT
SHOULD EVERY LISTED COMPANY HAVE AN ETHICS OFFICER?
Presented by: Sairam T AAnu BalaJohn ThomasMeenatchi SVignesh S
Listed company
Company whose shares are traded on an official stock exchange
Listed companies drive the Stock Exchange. Clause 49 I (D) of the Listing Agreement with
the stock exchanges requires companies to institute a code of ethics for the Board and senior management and affirm compliance to the same on an annual basis.
Company officials who observe the law may avoid stiff personal penalties, both monetary and potential jail time.
What is an Ethical Issue?
A problem or situation that requires a person or organization to choose between
alternatives that must be evaluated as right (ethical) or wrong (unethical)
Example:
In 2010, Toyota ignored information about safety and delayed investigating possible recalls. In 2009, they learned about sticking pedals and faulty brakes; instead of addressing the issue, they added side airbags. In some cases, Toyota faced accusations of hiding evidence for hundreds of cases involving death and rollovers, putting their drivers and passengers at risk.
Chevron has attempted to avoid millions of dollars' worth of taxes plus 18 years' worth of unethical business practices. When they dumped billions of gallons worth of toxic waste into Ecuadorian rainforest, they were sued and tried to deny their involvement even though there was plenty of solid evidence.
Who is an Ethics officer?
Someone who aligns the practices of a workplace with the stated ethics and beliefs of that workplace, holding people accountable to ethical standards
Role of an Ethics officer
Risk/cultural assessment Program design/update Develop policies and procedures Communication, training, and implementation Ongoing self-assessment, monitoring, and
reporting
Need of an Ethics Officer
To provide assistance with meeting regulatory compliance
To improve the company's reputation and public perception
To provide a mechanism for reporting issues A quality ethics officer will be able to thoroughly
and discreetly investigate claims of unethical and improper behavior when they are reported
Establish an ethical corporate climate
Ethisphere Institute
The Ethisphere Institute, the global leader in defining and advancing the standards of ethical business practices, announced the 2016 World’s Most Ethical Companies®. The latest list includes 131 companies representing more than 45 industries spanning 21 countries and five continents.
World’s Most Ethical Companies: 2016
Company Industry Country Rank
National Australia Bank
Banking Australia #1
Teachers Mutual Bank
Banking Australia #2
The Rezidor Hotel Group
Lodging & Hospitality
Belgium #3
Tata Steel Limited Metals, Minerals &
Mining
India #13
Wipro Limited Information Technology
Services
India #15
What should you, as an Ethical Officer do?
You can ask yourself question such as: Do I dare take an outside opinion? Am I
courageous enough to hear that opinion and face up to what that implies?
How readily do my subordinates agree to my positions? Do they agree all too readily?
Is my ambition only for myself? Does it have a larger purpose?
Am I honestly making reasoned arguments and reaching a conclusion or rationalizing a pre –reached conclusion?
Benefits of having an Ethics Officer
Can create a climate of integrity and excellence.
Minimize subjective and inconsistent management standards.
Build public trust and enhance business reputations.
Can integrate a company's business objectives, culture and compliance initiatives.
Especially true for IT security personnel because of their access to sensitive information as well as the responsibility to protect it.
Cost incurred : Hiring of an ethics officer, providing salary,
wages etc. Developing, implementing and maintaining an
ethics compliance program within organization. Ethics policies need to be continually updated
to reflect changes in workplace.Cost reduction : Can reduce the costs associated with fines and
lawsuits. Can reduce the costs that may arise due to the
mistrust between employees.
Hence, Benefit is greater than Cost in case of having an ethical officer.
Thank You