What’s ethics?
 « Ethics is a set of rules or standards governing the
conduct of a person, a community or the members
of a profession »
 It encompasses: values, beliefs, principles, a code
of conduct, the dos and the don’ts, the rights and
the wrongs…
 Your behaviour may said to be :
Ethical = morally acceptable/ unethical
Business ethics
The study of appropriate business
policies and practices regarding
potentially controversial issues, such as
corporate governance, insider trading,
bribery, discrimination, corporate
social responsibility and fiduciary
responsibilities.
Examples of misbehaviours
1-financial misconduct:
 Creative accounting (Enron, Worldcom)
 Insider trading (Lagardère and EADS / A380)
 Excessive compensations (bailout / public money
 Embezzlement
2-Human resource management
discrimination (gender, age, origin)
Union / strike busting
Privacy violation: electronic monitoring
3-Production
-Dangerous or defective products (alcohol,
tobacco, weapons, GMO…)
-Child labour
-Environmentally inefficient processes
4-Knowledge and skills
-Patent infringement
-Business intelligence (espionage)
-Employee raiding
Financial scandals: ENRON
 American Energy company based in Texas.
 Its CEO, Jeffery Skilling, hid millions of debts (creative




accounting).
In May 2000, Enron stock price was $90
In November 2000, it nosedived down to $1
11 billion loss bankruptcy
Total loss $ 63.4 billion
Jean Marie Messier?
 Former CEO of Vivendi Universal
 Sentenced to 3 years in prison and €150 000 in fine.
 Charged with:
 insider trading (délit d’initié)
 Excessive compensation
€ 20.5 million
(he was forced to
 Manipulation of financial data
 Publication of false financial statements
 (Vivendi had €35 billion oh hidden
debts)
Paying of bonuses to executives of bankrupt
corporations
 Public outcry over supersized pay, especially at big banks.
 AIG, which is now 80 percent owned by American
taxpayers, doled out $165 million in executive bonuses.
Merrill Lynch authorized $3.6 billion in bonuses after
receiving $10 billion from the government, $209 million of
which went to 10 bankers alone.
 bailout recipients shouldn't give out bonuses
 regulators have been going after bonuses more aggressively
 “It's not unethical to pay people money you are
contractually obligated to pay them. Even if doing so
makes you, or other people, want to pull your hair out.
It's the right thing to do. Not always because the
person getting the money deserves it, in some abstract
sense, but because you promised.”
—Chris MacDonald
Transparency International
Corruption is widespread
Low wages
Insufficient promotion
Inequalities
Impunity
Disrespect /infringement of the law