For this discussion forum,
First, identify one real-life example of personal ethics and one real-life example of corporate social responsibility in the financial field from the last five years (no Enron or WorldCom examples, as these are too old). The example can be positive or negative. Note: When possible, select a different example than those already posted by a fellow classmate.
Next, explain each ethical example and what might have been done differently, as well as what you learned from the example.
Finally, select one financial business regulation (e.g., Sarbanes-Oxley Act of 2002, Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, etc.) and debate how it does or does not promote ethical behavior. Be sure to be specific when describing the regulation. What are other ways to ensure strong ethical business decisions?
Personal ethics are a person’s beliefs regarding right and wrong. Personal ethics guide us in our personal and professional lives. Personal ethics often develop from things learned throughout life. Sadly, I have encountered several people in the workplace with poor ethics. When I think of poor ethics, I always think back to one of my first encounters with individuals with poor ethics. Straight out of high school I started working at Dollar General. I soon came to realize that my manager and assistant manager at the time were not very ethical people. Other employees and I started to suspect that they were doing something that was wrong. Someone had witnessed them take money out of the safe and they did not put it in a deposit bag or fill out a deposit slip. We began to suspect that they were some how stealing money. Someone filed a complaint, and an investigation was conducted. Shortly, we learned that both managers were going to be fired and if they returned the money the company would not press charges.
There were several ethical dilemmas in this situation but the biggest one was theft. To change the outcome of the situation, the managers could have chosen not to steal money from the company. From this situation I learned at an early age that not everyone has the same ethical and moral code. Some people despite knowing something is wrong will do it anyways. No matter the consequences.
Corporate Social Responsibility
“Corporate social responsibility (CSR) is a business model in which for-profit companies seek ways to create social and environmental benefits while pursuing organizational goals, like revenue growth and maximizing shareholder value” (Gavin, 2019, pp. 4). Organizations use CSR to give back to the community. It also can be used as a competitive advantage because people like to see their money mean something or make a difference. Many companies have implemented very extensive CSR programs and dedicated entire departments to ensure that the CSR programs are a success. An example of a company that displays CSR is Lego. Lego is the only toy company to be named a World Wildlife Fund Climate Savers Partner. Lego was named this because of its pledge to reduce its carbon impact and its commitment to sustainability. By 2030, Lego desires to use environmentally friendly materials to manufacture its core products and packaging. Over the years, Lego has to committed to this plan
through several things like decreasing the size of the boxes they use. “In 2018, the company introduced 150 botanical pieces made from sustainably sourced sugarcane- a break form the petroleum-based plastic typically used to produce the company’s signature building blocks” (Gavin, 2019, pp. 9). The company has also committed to take away all single-use plastic packaging from its products by 2025.
This ethical example shows a company displaying CSR and caring about the world of tomorrow. I do not think that there is anything that should be done differently. It is a positive example. From this example I learned that many companies can and should do more no matter how big or small. Hopefully, other toy manufactures will follow in Lego’s footsteps.
Sarbanes-Oxley Act of 2002
The Sarbanes-Oxley Act of 2002 is a law that was passed by the United States Congress on July 30, 2002. The purpose of the law was to help protect investors from company participating in fraudulent financial reporting. “Also known as the SOX Act of 2002 and the Corporate Responsibility Act of 2002, it mandated strict reforms to existing securities regulations and imposed tough new penalties on lawbreakers” (Kenton, 2020, pp. 1). The SOX Act of 2002 was passed in response to multiple financial scandals in the early 2000s. Sadly, the scandals involved large publicly traded companies like Tyco International plc and Enron Corporation. Due to the scandals coming from such large corporations, investors lost confidence in corporate financial statements. There were four new major reforms that the SOX Act enforced, corporate responsibility, increased criminal punishment, accounting regulations, and new protections. The SOX Act promotes ethical behavior by holding corporations and its CEOs to a code of ethics and protection whistleblowers from retaliation. It also promotes ethical behavior by requiring organizations to be transparent with consumers and investors.
Gavin, M. (2019). 5 Examples of Corporate Social Responsibility | HBS Online. Business Insights – Blog. https://online.hbs.edu/blog/post/corporate-social-responsibility-examples
Kenton, W. (2020). Sarbanes-Oxley (SOX) Act of 2002 Definition. Investopedia. https://www.investopedia.com/terms/s/sarbanesoxleyact.asp