Business Ethics and Corporate Social Responsibility
There is growing importance of business
ethics,
integrity,
code
of
ethics,
obligation, good corporate governance
and corporate social responsibility in
setting business objectives in the
business world today.
Sabga: Companies need good corporate governance
Sunday, November 25, 2012
Andrew Sabga
Andrew Sabga, president of the T&T Chamber of Industry and Commerce, says Government must
devise proper policies to ensure good governance practices among businesses in T&T. But he did not
rule out the role of the private sector, including the Chamber, in protecting the reputation of the
industry in light of the collapse and CL Financial and Hindu Credit Union.
The ongoing commission of enquiry in this financial debacle is revealing numerous cases of
management inefficiencies and in some cases greed which led to the failure of the companies, causing
the State to inject $20 billion CL Financial in an effort to save the investment of depositors.
Sabga was speaking at Tuesday’s gala awards ceremony at the Hilton Trinidad, hosted by the Ministry
of Trade, Industry and Investment, to celebrate the 60 companies that re-invented themselves to
become modern-day symbols of excellence.
Sabga said, “One cannot underestimate the importance of good corporate governance, which is the
foundation for sustainable business. We must now look at formalising the process, through proper
government directive and further private-sector partnership with the public sector, to continue the
efforts of economic diversity in T&T.”
He added, “As we look back through the past 50 years, we see that those companies which continue
to succeed today have placed emphasis on strong corporate governance and have made their core
values and even our nation’s watchwords—Discipline, Production and Tolerance—the backbone of their
companies’ policies and procedures.
We need to ensure, as business practitioners, that we all make a commitment to good corporate
governance and incorporate ethical behaviour in our business strategy, operations and culture, so that
those who succeed us can stand proud and carry on the great legacy, we have created.”
Sabga called for more companies to embrace the concept of corporate social responsibility. For those
already on board, he urged them to go beyond mere obligation as required by the law and show a
genuine concern, not only for the environment, but for the nation. Doing business in an ethical way
was in the interest of the wider community, he said, and companies must continue to find ways to
give back to the people of T&T, who have been good to them.
He said: “Fifty years ago, in 1962, the way business was conducted was vastly different from what it
is today. In the past half-century, advances in technology have drastically improved the way we all
conduct business. Business processes have changed and made organisation more efficient.
“At the same time, technology has opened lines of communication, allowing businesses to
communicate and collaborate beyond borders with ease. “Collaboration is the future of the business
competitiveness as companies become more innovative, connect to people better and overall act
faster in the ‘flattened’ marketplace of today’s global, economy,” he said.
What is 'Business Ethics'?
 The study of proper business policies and practices regarding
potentially controversial issues, such as corporate governance, insider
trading, bribery, discrimination, corporate social responsibility and
fiduciary responsibilities.
 Business ethics are often guided by law, while other times provide a
basic framework that businesses may choose to follow in order to gain
public acceptance.
Integrity in Business
In the rush to start a business, keep it running and make money, there’s one important detail that can get lost
in the hullabaloo: integrity. Integrity isn’t something easily monetized, but when it’s implemented into a
business’s DNA, there is plenty of money to save and the great potential to make more.
It’s easy to overlook the quality of integrity when running a business, but incorporating it into all of your
business dealings and decisions can advance your company to greater levels of success.
Integrity is synonymous with trust in the business world. After all, clients have to trust the people they do
business with to keep them, so owning up to every responsibility is paramount.
The bottom line is consistency. A company needs to maintain what it says it does, and who it says it is. There
shouldn't be an external impression of the business that is dramatically different from the internal version.
Especially in rough economic times, to be someone the buying public can trust is priceless. So while it might
not seem immediately top on your list, your business can't afford to compromise its integrity in this
competitive market. "When people choose to lead with integrity they position themselves at the top of their
industry," says Lisa Krohn, a personal organizer and life coach who works to bring the concept of integrity
back into businesses. "All the other details, like the product, or service, or whatever, come after integrity
because people do business with people they know, like, and trust."
What are Ethical codes?
These are adopted by organizations to assist members in understanding the
difference between 'right' and 'wrong' and in applying that understanding to
their decisions. An ethical code generally implies documents at three levels:
codes of business ethics, codes of conduct for employees, and codes of
professional practice.
A code of ethics will start by setting out the values that underpin the code and
will describe a company's obligation to its stakeholders. The code is publicly
available and addressed to anyone with an interest in the company's activities
and the way it does business. It will include details of how the company plans
to implement its values and vision, as well as guidance to staff on ethical
standards and how to achieve them.
What is good corporate governance?
The framework of rules and practices by which a board of directors ensures
accountability, fairness, and transparency in a company's relationship with its
all stakeholders (financiers, customers, management, employees, government,
and the community).
The corporate governance framework consists of (1) explicit and implicit
contracts between the company and the stakeholders for distribution of
responsibilities, rights, and rewards, (2) procedures for reconciling the
sometimes conflicting interests of stakeholders in accordance with their
duties, privileges, and roles, and (3) procedures for proper supervision,
control, and information-flows to serve as a system of checks-and-balances.
What is 'Corporate Social Responsibility'?
The term "corporate social responsibility" came into common use in the late
1960s and early 1970s after many multinational corporations formed the
term stakeholder, meaning those on whom an organization's activities have
an impact.
CSR refers to corporate initiatives to assess and take responsibility for the
company's effects on the environment and impact on social welfare. The term
generally applies to company efforts that go beyond what may be required by
regulators or environmental protection groups.
Corporate social responsibility may also be referred to as "corporate
citizenship" and can involve incurring short-term costs that do not provide an
immediate financial benefit to the company, but instead promote positive
social and environmental change.