• Eric Pilmore, the new senior vice president of corporate governance at Tyco, had to determine how he was going to repair the tarnished image of Tyco. • Tyco would have to start from scratch to develop a new code of ethics in order to reestablish credibility with its stakeholders.
• Established the Guide to Ethical Conduct which was applicable to all employees – Covered ethical areas such as sexual harassment, potential conflicts of interest, compliance rules, and fraudulent behavior – Also developed ethical vignette videos to highlight potentially unethical behavior in different situations
• Four types of statements a corporation may adopt to communicate the corporation’s view of ethics: 1. Values Statements 2. Corporate Credos 3. Codes of Ethics 4. Internet Privacy Policies
• JCPenney – Developed one of the first corporate codes of ethics – Stores were originally called the Golden Rule Stores – In 1913, when the JCPenney stores were formed, the Penney Idea was adopted
• Fiduciary responsibilities • Absence of prejudice • Compliance and harassment • Accounting • Conflict of interest • Governance • Human resources • Member • Cooperation with other communications and credit unions confidentiality • Social responsibility • Commitment to learning and skill enhancement
10 Role of Total Responsibility Management and a Code of Ethics • Total Responsibility Management (TRM) – Starts with the premise that the vision of the firm drives the development of the code of ethics – The firm’s vision establishes the benchmark goals in which the firm is now accountable to its stakeholders
Improvement, and Learning Systems 1. The responsibility measurement system 2. Transparency and accountability 3. Innovation, improvement, and learning systems
• Many companies begin their ethical codes with a mission statement – The mission statement sets forth a brief explanation about what the company stands for and why it exists • Also identifies stakeholders of the company and explains the interactions with the group
• Section 406 of the Sarbanes Oxley Act of 2002 requires companies that are publicly traded to disclose whether or not they have a code of ethics – If code of ethics does not exist, the company must explain why – Based on SOX requirements, only top level managers are required to be held accountable to the firm’s code of ethics
1. Caux Round Table Principles 2. Organization of Economic Co-operation and Development Guidelines for Multinational Enterprises 3. United Nations Global Impact
3. Many companies ignore or overlook differences in translating codes of ethics into other languages. Why is it important to have codes of ethics translated into the native languages of the countries in which the company may operate?