Question

Explain the challenges posed by business ethics and their relationship to legal requirements in company’s business environment.

Answer 1

Even before the business reaches the stage where the company's directors pitch the business plan to potential investors, there could be questions about the ethics of the company as the original founders imagined them. All founders must share the same entrepreneurial values , principles and ethics. They will have a difficult time securing funding or even getting the business through the start-up process if they have conflicting principles. Partners or a group of business founders typically come together because they have the same vision. However, differences can emerge as soon as they begin to explore the organizational function and structure.

It can be a challenge to establish a recruitment and selection process that screens applicants who are likely to follow the ethics of the company. Recruiters can assess whether applicants are eligible for certain positions based on their functional skills and core competencies by evaluating applications, resumes and work experience, and by interviewing candidates. However, it is difficult to determine if the corporate ethics of a nominee would be compatible with the principles of the organization until it is already on board.

They embody the principles of the organization and are therefore responsible for modeling actions and behaviors that emulate the company's management and workers. When executives at C-level engage in unethical or questionable business practices, they risk losing their employees, clients and other business community members' trust and confidence.

One aspect of corporate governance concerns the business relationship between a board of directors and the executive officers of the company. In general, a corporation's CEO is accountable to the Board of Directors and provides leadership and guidance to a team of executives comprising the Chief Operating Officer, Chief Financial Officer, and Chief Human Resources, Information Technology, and Marketing Executives. Although the structure may vary slightly from one company to another, senior executives also called C-level officers have a highly principled duty to run the organization.

Many companies mistakenly see ethics as intertwined with compliance. They really aren't. Combining ethics with legislation removes the checks and balances, rendering objectivity almost impossible of any sort. Ethics refers to the way you do business and whether your company, its management and its employees conduct business in a manner that is consistent with certain business standards and principles. In contrast, compliance has to do with oversight of certain rules and regulations, written laws or common law.

If unethical business practices underlie the operations of your company, and the executives responsible for assessing compliance are the same ones who engage in unethical business practices, an unethical practice could be determined by that arrangement itself. For instance, your chief financial officer who oversees the revenue, assets and liabilities of the company should not be the officer responsible for auditing financial operations as well.