Chapter 4 - Demanding ethical and socially responsible behavior. After you have mastered the material in this chapter, you will be able to: Explain why obeying the law is only the first step in behaving ethically, ask the three questions you need to answer when faced with a potentially unethical action, describe management’s role in setting ethical standards, | Demanding Ethical and Socially Responsible Behavior Chapter 04 McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Explain why obeying the law is only the first step in behaving ethically. Ask the three questions you need to answer when faced with a potentially unethical action. Describe management’s role in setting ethical standards. Distinguish between compliance-based and integrity-based ethics codes, and list the six steps in setting up a corporate ethics code. Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders. Analyze the role of . businesses in influencing ethical behavior and social responsibility in global markets. LEARNING GOALS Chapter Four 4- Ethics is More Than Legality Scandals have shaken the real estate, mortgage and banking industries. How do we restore trust in the free market system? Punish those who have broken the law. Make accounting records more transparent. | Demanding Ethical and Socially Responsible Behavior Chapter 04 McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Explain why obeying the law is only the first step in behaving ethically. Ask the three questions you need to answer when faced with a potentially unethical action. Describe management’s role in setting ethical standards. Distinguish between compliance-based and integrity-based ethics codes, and list the six steps in setting up a corporate ethics code. Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders. Analyze the role of . businesses in influencing ethical behavior and social responsibility in global markets. LEARNING GOALS Chapter Four 4- Ethics is More Than Legality Scandals have shaken the real estate, mortgage and banking industries. How do we restore trust in the free market system? Punish those who have broken the law. Make accounting records more transparent. Consider what is ethical, not just what is legal. LIFE AFTER SCANDAL LG1 4- Madoff Investment Securities: Bernie Madoff is serving 150 years behind bars after running his exclusive wealth management firm as a gigantic Ponzi scheme. Enron: Jeffery Skilling is serving a 24 year sentence for accounting fraud while Richard Causey, who pled guilty, will be released in October 2011. Former CEO, Kenneth Lay, died before sentencing. WorldCom: Former CEO, Bernie Ebbers, was convicted of fraud, conspiracy and false filings and sentenced to 25 years. COST of CORRUPTION (Legal Briefcase) 4- WHAT is a PONZI SCHEME? A fraud by paying returns to existing investors from funds contributed by new investors. New investors are promised opportunities claimed to generate high returns with little or no risk. Fraudsters focus on attracting new money to make promised payments. Source: Securities and Exchange Commission, , accessed June 2011. 4- Ethical Standards are .
