CIMA P2 Syllabus D. Risk and Control - Ethics - Notes 3 / 9
Ethics
Ethics is more than a set of rules, in business it requires judgement
There are consequences of unethical behaviour
Consequences:
Fines
Reputation
Illegal
Ethical codes
Ethical codes are often used by large businesses to guide all involved, and reduce the risks of unethical behaviour
For them to be effective they must be:
Embedded throughout the business
Strongly endorsed from the top
Training offered
Kept up to date
Rewards and penalties for following/not following it
Ethical Stance of a firm
| Stereotype | |
|---|---|
| 1 | Only interested in short-term shareholder wealth. Will do the minimum necessary for other stakeholders. |
| 2 | Interested in long-term shareholder wealth and well-managed relationships with other stakeholders. |
| 3 | Other stakeholders' interests should be more explicitly incorporated. Interested in more than just profits. Go beyond minimum coprorate governance rules. |
| 4 | Society shaping firm. Ideological. Easier for owner managed businesses. |