Question

Ethics risk management is a key aspect of any business. Branch managers were able to manipulate the system for personal gain. Do you think there is a stronger or weaker response to unethical actions like these today?  

Does it differ by audience (consumers, employees, managers, executives, government)?

Answer 1

Ethical risk could be weighed as much as any other risk in today's time where people are more ethically responsible and aware. Take the example of Infosys, the company was recently in limelight for compliance related issues raised by a whistle blower, where in top level management was involved in fudging numbers by not reporting losses in places to promote shareholder support.

A complaint was filed by whistleblowers which suggested that the company CEO and CFO were hiding M& deal structures ion terms of losses and revenue recognition methods were palsy to aid companies other losses. The complaint includes instances of compliance and regulatory lapse on key position holder's side misguiding the investors to a false hope.

Revenues and profits were overstated, losses were hidden, investor trust was breached etc, all this led stock price to plummet, government to put a probe and investigation in to the same.

Employees in this case blew whistle while its safe to assume some became complacent and were acceptable to the forged data.

The Ethical risk may differ from management to consumers as explained above. However, to each case, some stakeholder might respond in one way or other depending on the magnitude of implication it has on them.