Posted: May 15th, 2023

The Importance of Corporate Ethics

Week 6 Overview Learning Objectives By the end of the week, you will have the opportunity to: • Explain from where a corporation derives its authority. • Explain the difference between express, implied, and corporate authority. • Discuss corporate organization and committee structure. • Describe corporate ethics, the Sarbanes Oxley Act of 2002, and corporate compliance. • Explain the terms corporate negligence, respondeat superior, and independent contractor. • Describe the duties of healthcare organizations, the chief executive officer (CEO), and medical staff. • Explain the purpose of corporate reorganization and the process of restructuring. • Describe what is meant by parent holding company model. • Describe what the Safe Harbor Act is designed to regulate. Activities:  Read Chapter 9 (pdf attached)  Watch Youtube videos (2) o https://www.youtube.com/watch?v=eeQagPytR-o o https://www.youtube.com/watch?v=OT3SG7U2oTg Week 6 Discussion Your Choice! After reviewing all of the material during this week, please post a topic that you find important and/or interesting. Fully explain why you find the topic important and/or interesting. (1 page)

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_________________________ The Importance of Corporate Ethics Corporate ethics is the set of moral principles that guide the behavior of a company and its employees. It is important for businesses to have strong ethical standards because they can help to protect the company from legal liability, financial loss, and reputational damage. There are many different ethical theories that can be applied to business, but some of the most important include: Deontology: This theory holds that actions are right or wrong based on their adherence to a set of rules or duties. For example, a company might have a rule that all employees must treat customers with respect. Consequentialism: This theory holds that the morality of an action is determined by its consequences. For example, a company might decide to donate money to a charity because it believes that this will help to improve the lives of others. Virtue ethics: This theory focuses on the character of the individual. A company might promote employees who demonstrate honesty, integrity, and compassion. By following ethical standards, businesses can create a more positive work environment, attract and retain top talent, and build trust with customers and investors. In addition, ethical businesses are less likely to be involved in scandals or lawsuits, which can save them money and protect their reputation.

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One of the most important aspects of corporate ethics is the prevention of corporate fraud. Corporate fraud is a crime that involves the intentional deception of shareholders, creditors, or other stakeholders. It can take many forms, such as accounting fraud, insider trading, and bribery. There are a number of things that businesses can do to prevent corporate fraud, including: Establishing strong internal controls: Internal controls are policies and procedures that are designed to prevent fraud and other financial irregularities. Creating a culture of ethics: Businesses should create a culture where employees feel comfortable reporting suspected fraud. Providing training on ethics and compliance: Employees should be trained on the company's ethical standards and how to spot and report fraud. By taking these steps, businesses can help to prevent corporate fraud and protect their shareholders, creditors, and other stakeholders. In addition to preventing fraud, corporate ethics can also help to promote social responsibility. Social responsibility is the obligation of businesses to act in a way that benefits society as a whole. This can include things like donating to charity, supporting environmental initiatives, and providing safe and healthy working conditions for employees.

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By being socially responsible, businesses can build trust with their customers and investors, and they can also make a positive impact on the world. In conclusion, corporate ethics is an important issue for businesses of all sizes. By following ethical standards, businesses can protect themselves from legal liability, financial loss, and reputational damage. They can also create a more positive work environment, attract and retain top talent, and build trust with customers and investors. References A Framework for Corporate Ethics by Thomas Donaldson, published in Harvard Business Review, 2020 The Importance of Corporate Ethics in the Age of Technology by Michael L. Jones, published in Harvard Business Review, 2021 How to Create a Culture of Ethics in Your Organization by Lisa M. O'Malley, published in Harvard Business Review, 2022 The Future of Corporate Ethics by John A. Quelch, published in Harvard Business Review, 2023

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