Ethics, Integrity and Trust
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Transcript of Ethics, Integrity and Trust
Building SuccessfulEmployee
RelationshipsA Cornerstone to Fraud Prevention
and Risk Management
Building SuccessfulEmployee
RelationshipsA Cornerstone to Fraud Prevention
and Risk Management
Building SuccessfulEmployee
RelationshipsA Cornerstone to Fraud Prevention
and Risk Management
Ethics WebinarEthics, Integrity & Trust
Elaine Nissley, PrincipalMBA, CISA, PMP, CRISC, CRMA
Internal Audit & Management [email protected]
www.macpas.com
Webinar Objectives
Understand the Connection Between Ethics, Integrity and Trust.
Understand Different Ethical Perspectives
Understand different Ethical Decision Making Frameworks.
Learn How to Apply an Ethical Decision Making Framework
Ethical Perspectives
COMMONGOOD
JUSTICE
Ethical PerspectiveUtilitarian/Results
PrincipleConsequencesGreatest HappinessPleasure vs Pain
CautionsIndividual PerspectiveImpact to the Masses
Ethical PerspectiveMoral Rights
PrincipleProtects and respects moral rights
Six Moral RightsConsentPrivacyFreedom of ConscienceFree SpeechDue ProcessLife and Safety
Ethical PerspectiveFairness/Justice
Principle Fair distribution of benefits and burdens, consistencyPeople with similar characteristics are treated the same
ProceduralClear rulesConsistently applied
CompensatoryCompensated for cost of injuries by responsible partyParty not responsible if they had no control over circumstances
Ethical PerspectiveCommon Good
Principle
Good of the whole
Part of a larger community
Corporate initiatives
Social Responsibility
Community Service
Ethical PerspectiveVirtue
Principle
Moral character traits
Honesty, courage, faithfulness, trustworthiness, integrity
Individual
Human virtues
What sort of person one should be
Ethical Framework
UTILITARIAN
RIGHTS
FAIRNESS
COMMON GOOD
VIRTUE
“Ethics consists of
knowing what we
ought to do, and
such knowledge can
be taught.” Socrates
Integrity & Trust"The most important persuasion tool you have in your entire arsenal is integrity." - Zig Ziglar
"Have the courage to say no. Have the courage to face the truth. Do the right thing because it is right. These are the magic keys to living your life with integrity." - W. Clement Stone
“Trust is the glue of life. It's the most essential ingredient in effective communication. It's the foundational principle that holds all relationships.” - Stephen Covey
Ethical Decision Making FrameworksRESOLVEDD Model
Jonathan Kvanig
Davis 7 Step Process Michael Davis
Markkula Framework Markkula Center for Applied Ethics
PLUS Model Ethics & Compliance Initiative
RESOLVEDDR review the factsE estimate the problemS list possible solutionsO state probable outcomes or consequences of each solutionL describe the likely impact of the solution V explain the values upheld or infringed uponE evaluate solutions in terms of outcomes, likely impact and valuesD decide on the best solutionD defend the decision against objection
Raymond Pfeiffer and Ralph Forsberg, editors, Ethics on the Job: Cases and Strategies (Third Edition, Wadsworth, 2004).
Davis 7-Step Process1. State problem2. Check facts3. State specifications4. Develop list of five options
6. Make a tentative choice7. Make final choice
A. Harm testB. Publicity testC. Defensibility testD. Reversibility testE. Virtue testF. Professional testG. Colleague testH. Organization test
Michael Davis, “Developing and Using Cases to Teach Practical Ethics”, Teaching Philosophy, Volume 20, December 1997, pp. 353-385
5 TEST OPTIONS
Markkula Framework1. Recognize an Ethical Issue2. Get the Facts3. Evaluate Alternatives
4. Make a tentative choice5. Make final choice
Markkula Center for Applied Ethics at Santa Clara University.
Ethical Perspective
Plus
P = Policies
L = Legal
U = Universal
S = Self
Connects.ethics.org
Define Problem
Define Possible
Solutions
Evaluate Alternatives
Implement the
Solution
Evaluate Outcomes
Apply Ethical Decision Making Process
Code of Ethics/ConductOrganizationalProfessional
ETHICAL DECISION
APPLY
MODELCODE
Institute of Internal Auditors
Professional Code
of Ethics
FRAMEWORK
INTEGRITY
OBJECTIVITY
CONFIDENTIALITY
COMPENTENCY
ethicsE
SummaryIntegrity – consistency that establishes trust and provides the basis for reliance on the auditor’s judgement. Objectivity – Balanced assessment of all relevant circumstances, not influenced by the auditor’s own interest or by the judgement of others.Confidentiality – Respect for the value and ownership of information the auditor receives. The auditor does not disclose information without appropriate authority unless there is a legal or professional obligation.Competency – Auditors have the knowledge skills and experience needed to perform the services.
Internal Auditor Ethical DilemmaProblem – You have just completed a governance audit of senior management
and the Board of Directors. There were several significant findings. The President of the company asks you to change the report and change or suppress many of the findings. It is quite clear that failure to comply will result in the loss of your job.
Alternatives1. Comply with the President’s request.2. Compromise and reduce some of the findings but do not remove any of
the findings.3. Report the incident through the organization’s hotline and do not issue
the report.4. Issue the report with all of the findings intact and report the incident.
Evaluation of the Solutions
Alternative Solutions1. Alter report as requested
2. Sugar coat the report
3. Whistleblow and do not issue the report
4. Whistleblow and issue the report
IIA Code of EthicsIntegrity
Objectivity
Confidentiality
Competency
Internal Auditor Ethical DilemmaImplement the Decision
Issue the audit reportReport the President’s action on the Whistleblower Hotline.
Evaluate the OutcomesThe President terminates you.You can still sleep at nightHuman Resources investigates the whistleblower reportYou are reinstated with back pay.
Hershey’s, Code of Ethical Business Conduct, Hershey, Pa. retrieved from www.thehersheycompany.com
Hershey’s Code of Ethical Business Conduct
OUR COMMITMENT TO STOCKHOLDERSWe act honestly and transparently at all times, maintaining the trust our stockholders have placed in us. OUR COMMITMENT TO CONSUMERS We maintain the trust consumers place in our brands, providing the best products on the market and adhering to honest marketing practices.OUR COMMITMENT TO THE GLOBAL COMMUNITY We comply with all global trade laws, protecting our natural resources and supporting the communities where we live, work and do business.OUR COMMITMENT TO THE MARKETPLACE We deal fairly with our business partners, competitors and suppliers, acting ethically and upholding the law in everything we do.
Hershey’s, Code of Ethical Business Conduct, Hershey, Pa. retrieved from www.thehersheycompany.com
Ethical DilemmaProblem – You have just received a tip on the hotline that factories in China are
requiring children to work ten hour days in poor environmental conditions such as no ventilation and poor temperature controls.
Alternatives1. Ignore the report because the organization’s most recent inspections of the
factories in China did not report these types of conditions.
2. Ignore since this is the only incident that has been reported.
3. Conduct a special investigation into the specific allegations.
4. Review the organization’s process for inspection of factories and use the information from the tip to improve the process as needed to address this concern.
Evaluation of the Solutions
Alternative Solutions1. Rely on Company Inspections
2. Ignore and wait for additional similar reports
3. Special Investigation
4. Assess and upgrade current inspection process
Hershey Code of Ethical Business ConductMaintain Stockholder Trust
Maintain Consumer Trust
Comply with Global Trade Laws and Support Communities
Deal Fairly with Business Partners, Competitors, and Suppliers
Ethical DilemmaImplement the Decision
Assess and upgrade current inspection processes.Take action based upon the results of the assessment.
Evaluate the OutcomesThe company may need to conduct an inspection sooner than
plannedYou have eliminated the risks of bad press and resulting reduced
market share.
Implementation of the CodeWrittenAcknowledgedTrainingEmbedded in the culture
Evaluation
Socrates concluded that, “Ethics consists of knowing what we
ought to do, and such knowledge can be taught. “
DO YOU KNOW WHAT YOU DO NOT KNOW?
ETHICAL BUSINESS EVALUATIONInternalExternal
THANK YOU!
Elaine Nissley, PrincipalMBA, CISA, PMP, CRISC, CRMA
Internal Audit & Management [email protected]
www.macpas.com
Questions?
Elaine Nissley, PrincipalMBA, CISA, PMP, CRISC, CRMA
Internal Audit & Management [email protected]
www.macpas.com