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Running Head: Ethical Conduct Ethical Conduct (Authors Name) (Institution Name) Code of Ethical Conduct: Introduction In the present day environments, activities related to business organizations are under more scrutiny then ever before by the government regulatory authorities, clients, shareholders and the general public. Therefore, the ethical conduct of business managers and their employees have become more important in the wake of large-scale business scandals that have rocked the confidence of all investors and consumers as a whole. Specifically, financial institutions and the banking industry have now come under more scrutiny and ethical values and activities have begun to play a leading role in the formalizing of company procedures and policies. To re-inspire the confidence and public trust of shareholders, clients and the public as a whole, ethical standards are now being formulated and recognized as firmly to be adhered to and never to be compromised with. (Code of Ethical Conduct, 2007) Background to Ethical Codes The code of ethical conduct of most organizations is applicable to all its employees, managers and directors and is a standard by which their professional behavior and responsibilities are guided in carrying out all the business dealings of the company. The fundamental principal of the ethical code is to immediately prompt the reporting of internal violations of ethical practice to an authority within the company that has been identified in the section Code of Integrity and Good Judgment and it is designed to detect and deter any wrong doing at each and every level of the company and its affiliates. (Code of Ethical Conduct, 2007) Examples of Three Ethical Codes of Different Organizations The three code of ethical conduct of the Cardinal Financial Corporation states that: Accurate, timely, full, fair and logically understandable disclosures are made in all the reports and documentation that are filed or submitted to the regulatory organizations and the general public by the company. The dealing of the company complies with the government laws and rules and regulations.
There is diligence exercised to detect and prevent criminal conduct of any type and there is accountability if adherence to the code of ethics is not respected. The three codes of ethical conduct of the AMR Group, which owns American Airlines are the following The Board members have a paramount interest in promoting and preserving the interests of the stockholders of AMR. Directors should avoid any conflict of interest between themselves and the Corporation. Any situation that involves, or may be perceived as involving, a conflict between the Directors personal interest and the interests of the Corporation should be disclosed to the Committee Chairman. In addition, Directors must disclose information regarding their financial interests in organizations that do business with the Corporation. Once a Director has disclosed a conflict or potential conflict of interest, that Director will refrain from voting on any issue before the Board that creates the conflict or potential conflict of interest.
A Director will not knowingly engage in any conduct or activity that is inconsistent with, or disruptive of, the Corporations best interest or its relation with any person or entity. Enron has become a byword name associated with sleaze and corruption and its code of ethics also includes some extraordinary codes of ethics such as: The compliance with the law and ethical standards being conditions of employment and any violations in these would result in disciplinary action, inclusive of termination and additionally its policy states that we are adopting this Policy Statement to avoid even the appearance of improper conduct on the part of anyone employed by or associated with the Company... We have all worked hard over the years to establish our reputation for integrity and ethical conduct. We cannot afford to have it damaged. " The prohibition of trading in Enron shares by the organizations directors, officers or employees when they have "non-public" information about Enron or its subsidiaries.
A ban on officers or employees to own or participate in the profits of any other entity which does business with or is a competitor of the Company" without bringing their intentions in this regard to the attention of the chairman or chief executive. (AMR Code of Conduct; Code of Ethical Conduct, 2007; Enron's Code of Ethics) Arguments and Counter Arguments As the types of businesses being conducted by all three of the above companies are different, their codes of ethics accordingly differ but we can note that all three of them stress upon the requirement to conduct the dealings in accordance of the law, to strictly ensure that wrongdoings are detected and reported immediately, that no misinformation of any type shall be provided in any form by them and most importantly, strict disciplinary action would be taken if there was any breach of the laid down terms and conditions of the ethical code of conduct. Despite such ethical codes on the records, we have seen how the case of the Enron fiasco shook up the very foundations of the financial world, after which the government had to intervene and enact the Sarbanes Oxley Law which ensures that the standard ethical practices of organizations are not abused and are in accordance with the laid down conditional rules and regulations. (Sarbanes-Oxley Act) Draft of an Ethical Code of Conduct for an Organization While the standard codes that have been referred to in the examples section of the essay would definitely be included in this draft of codes, some others which would be there are the following: At the time of recruitment of personnel within an organization, compulsory educative classes be conducted to make all employees aware of the codes of conduct they would have to follow. Equal and fair opportunities without any discriminatory practices are given to employees irrespective of their race, gender, religion, color, national origin, sexual orientation, disability, familial or marital status, veteran status, or age. Support and encouragement should be provided to employees who detect and report violations with regard to the code of ethics and under no circumstances should they be harassed for their diligence. The codes of ethical conduct should be open to internal and external suggestions to further enhance and improve their quality. Provisions must also be there in the codes of ethical conduct to ensure that all inquires, verbal or written are replied to within a pre-decided time frame, and an accountability process should be in place to record such incidences. (Codes of Conduct) Conclusion We can conclude this essay with the most important point being made that while importance is attached to how well written or badly written the ethical codes of organizations are; what is vitally important is how they are respected and translated for practical use by the employees and specifically by the Directors and senior management teams of corporations.
When there are morally correct people in decision making places the risks of abusing ethical beliefs is minimal, however even with the toughest ethical codes of conduct and the most stringent of laws, there will always be con-men at the top who will continue to abuse their positions just like the Enron directors did. References: AMR Corporation Code of Ethics (Accessed: April 26, 2007) web Code of Conduct (Accessed: April 26, 2007) web Code of Ethical Conduct, February 2007 (Accessed: April 26, 2007) web Enron's Code of Ethics (Accessed: April 26, 2007) web The Sarbanes-Oxley Act (Accessed: April 26, 2007) web
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Research essay sample on Sarbanes Oxley Act Ethical Conduct
