Development Stages of Business Ethics.

SARBANES OXLY ACT 2002.

SECURITIES AND EXCHANGE COMMISSION
OF PAKISTAN.
 Evolution of Business Ethics.
What is Business
Ethics?
Evolution of Business Ethics are divided into following
stages:
Business ethics is the • Before 1960.
application of ethical • The 1960.
principles and values to • The 1970.
the conduct and • The 1980.
• The 1990.
decision-making of a
• The Twenty-First Century.
business and
its stakeholders.
 Before 1960
Ethics in Business.
• The US faced several challenges in questioning the concept
of capitalism before 1960.
• The progressive movement, the New Deal, and the Fair Deal
Before 1960 tried to provide citizens with a living wage and make
businesses more ethical and responsible.
Ethics in Business
• Different religions discussed ethical issues related to
business and applied their moral concepts to all aspects of
life.
• Religious traditions laid the foundation for the future field
of business ethics.
 The 1960
The Rise of Social Issue in Business.
• The 1960s was a time of anti-business sentiment, urban
decay, and environmental issues in the U.S.
• President Kennedy proposed four basic consumer rights:
safety, information, choice, and voice.
Before 1960 • Ralph Nader exposed auto industry’s negligence of
Ethics in Business
safety and led a consumer movement that pushed for
various laws to protect consumers from harmful
products and practices.
• President Johnson’s Great Society programs aimed to
provide economic stability, equality, and social justice
for all citizens.
 The 1970
Business Ethics as an Emerging Field.
• It is based on the moral principles of theologians and
philosophers.
• Business professors and philosophers explored the concept
Before 1960of corporate social responsibility, as the duty of businesses
Ethics in Business
to act ethically towards their stakeholders.
• The Watergate scandal and the Foreign Corrupt Practices
Act raised public awareness and legal standards for ethical
conduct in business and government.
• Various ethical issues in business, such as bribery, were
identified and researched by academics.
 The 1980
Consolidation.
• Business ethics became a recognized field of study in the
1980s.
• The Defense Industry Initiative on Business Ethics and
Before 1960Conduct was a landmark effort to guide ethical conduct
in the defense sector, based on six principles of codes,
Ethics in Business
training, reporting, auditing, integrity, and
accountability.
• The Reagan-Bush era favored self-regulation over
government regulation, leading to more global and
complex business environments that challenged the
existing values.
 The 1990
Institutionalization of Business Ethics.

• The Clinton administration supported self-regulation and free

trade, but also intervened in health-related social issues such as
teenage smoking and cigarette advertising.
Before 1960• Arthur Levitt, the chairman of the Securities and Exchange
Commission, tried to reform the accounting ethics standards, but
Ethics in Business
failed to prevent the scandals of Enron and WorldCom.
• The Federal Sentencing Guidelines for Organizations (FSGO)
provided incentives and penalties for businesses to prevent and
detect misconduct.
 The Twenty-First Century
A New Focus on Business Ethics.
• Some business leaders did not follow high ethical standards in
the 2000s and cheated on their financial reports.
• The Sarbanes-Oxley Act was a law that made it harder for
Beforebusinesses
1960 to lie about their money and punished them if they
Ethics indid.
Business
• The FSGO was another law that made businesses responsible for
finding and fixing ethical problems in their work.
• Different types of businesses have different ethical risks and
need to prevent them from causing trouble.
 The Sarbanes-Oxley Act of 2002

Definition:
It is a law passed by US congress in 2002 that made public
companies more honest and accountable for their money and actions.

• It made a new agency that checks and controls how public companies report their
Beforemoney1960and how auditors do their job.
Ethics
• in Businessworkers who report fraud and speak in court against their bosses
It protected
from being fired or treated badly by their companies.
• It also made top executives take responsibility for their companies’ money reports
and face harsh punishments if they lie.
• It stopped accounting firms from doing other business with the companies they
audit, to avoid cheating and bias.
• It also gave job safety to whistleblowers who report bad behavior to
the authorities.
 Securities and Exchange Commission of Pakistan

Definition:
It is a government agency that established in 1997 which regulates and
oversees the corporate sector, capital markets, insurance, non-banking financial
companies, and other financial services in Pakistan.
Before 1960
• It aims to develop a modern and efficient corporate sector and capital market that
Ethics incanBusiness
contribute to the economic growth and development of Pakistan.
• It also supervises and regulates Islamic finance products and services in accordance
with Shariah principles.
• It has investigative and enforcement powers to ensure compliance with the laws
and regulations under its jurisdiction.
• It provides online services for company name reservation, incorporation, filing of
statutory returns, and other processes through its e-Services portal.