Business ethics: CIMA members are well placed to manage their firms' ethical performance and integrate ethical goals into corporate strategy.From organic food to Fairtrade T-shirts and from hybrid cars hybrid car, hybrid vehicle hybrid n → Hybridfahrzeug nt or -auto nt to recycled packaging, companies and consumers are becoming more switched on to the impact of business on society and the environment. A new survey of 1,300 finance professionals by CIMA and the Institute of Business Ethics business ethics, the study and evaluation of decision making by businesses according to moral concepts and judgments. Ethical questions range from practical, narrowly defined issues, such as a company's obligation to be honest with its customers, to broader social (IBE IBE International Bureau of EducationIBE Internet Booking Engine IBE Institut für Medizinische Informationsverarbeitung, Biometrie Und Epidemiologie (LMU, Muenchen, Germany) IBE Ion Beam Etching ) has found that 84 per cent believe that businesses have a moral obligation to help tackle global problems such as climate change and poverty. Many organisations recognise the importance of having an ethical culture Ethical Culture is a nontheistic religion established by Felix Adler in 1876. The Ethical Culture Movement is a non-sectarian, ethico-religious and educational movement. , yet they still often fail to manage their ethical performance. Almost every industry has been touched by scandal. Most recently, banks have been denounced for pursuing high-risk trading strategies In finance, a trading strategy (see also trading system) is a predefined set of rules to apply. Usually, this refers to a means used to replicate an option in order to give it an arbitrage free value in the sense that the cost of buying some financial assets to give the same , global companies have been implicated im·pli·cate tr.v. im·pli·cat·ed, im·pli·cat·ing, im·pli·cates 1. To involve or connect intimately or incriminatingly: evidence that implicates others in the plot. 2. in corruption and western retailers have been accused of allowing their suppliers to use child labour. A number of companies, eager to show their corporate social responsibility credentials, have responded by publicly embracing ethical and green agendas, but is it all mere rhetoric--a fancy PR exercise to show that they are tackling global concerns alongside the pursuit of profit? In some cases at least, the answer is yes. Companies are only superficially addressing the impact of their activities on the environment, local communities and other stakeholders Stakeholders All parties that have an interest, financial or otherwise, in a firm-stockholders, creditors, bondholders, employees, customers, management, the community, and the government. . [ILLUSTRATION OMITTED] According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the CIMA/IBE research, many organisations are still failing to back up their ethical commitments with action. Nearly three-quarters (72 per cent) of respondents reported that their firms had a code of ethics, but that relatively few trained or incentivised employees to uphold these standards. Four out of ten respondents felt that ethical standards were not fully monitored or evaluated at work. Such findings suggest that companies aren't approaching ethical performance management as systematically as they treat other elements of the business. There are signs that companies are starting to realise that ethical performance is a serious part of their business that, if not properly managed, can damage their reputation. But still only about a third of respondents said that they collected or reported information to manage performance against ethical standards. Almost half of those whose companies didn't collect such information believed that their organisations would benefit if they were to start doing so. So why are management accountants only rarely helping to monitor the ethical aspects of corporate performance? While many say that they contribute to the ethical culture of their workplace by doing their jobs in a professional manner, relatively few are involved in collecting or analysing ethical management information. In fact, of those who said that they did contribute to managing their companies' ethical performance, only 16 per cent gathered such information, 16 per cent analysed it and 15 per cent reported it. But measurement is only part of what needs to be done. Corporate social responsibility and ethical performance must be an integral part of organisational strategy. According to the CIMA/IBE survey, few companies see ethical standards as a strategic issue yet. For example, they are still much more likely to be taking action to reduce their carbon footprints A carbon footprint is the total amount of carbon dioxide (CO2) and other greenhouse gases emitted over the full life cycle of a product or service. than to be integrating environmental concerns or opportunities into their business plans. The strategic focus of CIMA accountants makes them particularly well placed to take control of this issue. Although accountants in business can play an invaluable role in measurement and management, they are also in a strong position to ensure that a company's strategy reinforces and reflects its ethical aspirations. As well as managing performance against ethical standards, they can integrate ethics into strategy development and business planning. As companies start embedding 1. (mathematics) embedding - One instance of some mathematical object contained with in another instance, e.g. a group which is a subgroup. 2. (theory) embedding - (domain theory) A complete partial order F in [X -> Y] is an embedding if ethical goals into their business, the finance function will need to get more involved. Nearly three-quarters of the finance professionals surveyed said that ethical performance management would be part of their role within the next two to three years. Management accountants must be ready to contribute to managing ethical business performance beyond doing their day-to-day work professionally. Although companies are slowly starting to gather and report on information about ethical standards, many are still doing so in a reactive, risk-focused way. To realise the competitive advantage that ethical business can bring, they need to embed their values into all aspects of their operations. Addressing this at the superficial level with impressive-sounding statements and codes of ethics that aren't backed up with action is simply not enough to guarantee sound ethical standards. What does "business ethics" mean? Business ethics is the application of values--honesty, integrity and fairness, for example--to corporate behaviour. It's about how a company does business rather than what it does. It applies to any or all aspects of commercial conduct--from boardroom strategies to sales and marketing techniques, and from accounting practices to the treatment of suppliers and customers. Standards of business ethics are usually set out in an organisational code of ethics or conduct. This can cover such diverse issues as anti-competitive practices Anti-competitive practices are business or government practices that prevent and/or reduce competition in a market (see restraint of trade). Anti-competitive practices can include: Crime of giving a benefit (e.g., money) in order to influence the judgment or conduct of a person in a position of trust (e.g., an official or witness). Accepting a bribe also constitutes a crime. and corruption, and environmental pollution. A commitment to high standards of business ethics involves the management of non-financial aspects of performance. This can encompass what is variously termed as corporate social responsibility (CSR (1) (Customer Service Representative) A person who handles a customer's request regarding a bill, account changes or service or merchandise ordered. Agents in call centers are known as CSRs. See call center. ), corporate responsibility (CR) or corporate citizenship Corporate Citizenship The extent to which businesses are socially responsible in meeting legal, ethical and economic responsibilities placed on them by shareholders. The aim it to create higher standards of living and quality of life in the community in which it operates, while . While opinion is divided on whether or not these terms mean the same thing, what they all have in common that is they are about organisations taking responsibility for the way they conduct their business and the impact of their operations beyond a concern for the bottom line. Is global ethics Drafted initially by Dr. Hans Küng, in cooperation with the Council for a Parliament of the World's Religions staff and Trustees and experts drawing on many of the world's religious and spiritual traditions, Towards a Global Ethic: An Initial Declaration a myth? Join CIMA for a debate on whether business ethics can--or even should--be global. Moderated by newscaster Jon Snow This article is about the British newscaster. For other people named Jon or John Snow, see John Snow. Jon Snow (born September 28, 1947) is a British television newscaster on Channel 4 News, produced by ITN. , the discussion will be prompted by questions from the audience and the opinions of three panellists: * James Caan, entrepreneur and a star of the BBC Two For the BBC radio station, see BBC Radio 2. For the defunct Philippine network, see Banahaw Broadcasting Corporation. BBC Two is the second major terrestrial television channel of the BBC. series Dragons' Den Dragons' Den is a television programme that originated in Japan where the format is owned by Sony. The format, which now airs internationally, consists of entrepreneurs pitching their ideas to secure investment finance from business experts — the "Dragons". . * Andrew Nell, journalist and presenter of BBC One For the BBC radio station, see . BBC One is the primary television channel of the British Broadcasting Corporation (BBC), and was the first to be launched in the United Kingdom (as the BBC Television Service until 1960, and then renamed BBC tv until 1964). programme This Week. * Noreena Hertz Prof. Noreena Hertz (born September 24, 1967, London) is an English economist, author and campaigner. She is a leading expert on economic globalisation. Life Noreena Hertz is a great-granddaughter of British Chief Rabbi Joseph H. , economist and expert on ethical globalisation. To register your interest for the event, which will take place on November 17, e-mail ethicsevent@cimaglobal.com. Further information CIMA's Managing Responsible Business report is available to download from www.cimaglobal.com. For full details about CIMA's responsible business programme, visit www.cimaglobal.com/ethics. study notes Danielle Cohen cohen or kohen (Hebrew: “priest”) Jewish priest descended from Zadok (a descendant of Aaron), priest at the First Temple of Jerusalem. The biblical priesthood was hereditary and male. is CIMA's ethics manager.
What ethical guidance does your organisation offer its employees?
Don't know No Yes
A statement of ethical values, principles 7% 21% 72%
or commitments to stakeholders
A code of ethics or similar document 5% 23% 72%
Training on ethical standards at work 9% 46% 46%
A hotline for reporting conduct that 8% 53% 40%
violates the firm's ethical standards
A helpline offering advice on ethical 11% 55% 35%
behaviour at work
Incentives for staff to uphold standards 13% 68% 19%
of ethical conduct
Source: CIMA/IBE, 2008.
How do finance professionals manage their firms' ethical, performance?
Contribute to Greatest part
managing of your
ethical contribution
performance
Ensuring the integrity of 90% 34%
management information
Upholding professional 94% 30%
code of ethics
Leading by example 87% 20%
Incorporating ethical standards 49% 6%
into strategic decisions
Reporting ethical concerns 50% 3%
to the organisation
Contributing to the code of 26% 3%
ethics or similar document
Reporting ethical performance 15% 2%
against corporate goals
Collecting ethical 16% 1%
management information
Analysing ethical 16% 1%
management information
Other 2% 1%
Source: CIMA/IBE, 2008.
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