[Solution] Emerging Ethical Issues in Organizations
Created at:
Author: Sarah Bennett
Over the last few decades, several high-profile ethical scandals have shaken public and stakeholder confidence in corporations and other organizations. As a result, executives are under heightened scrutiny from both inside and outside their organizations.
Ethical Leadership and Corporate Governance
Leaders set the ethical tone for their organizations, and through their words and actions, they establish norms and create cultures that either promote or undermine ethical behavior. Ethical leadership is based in the idea that top managers are role models who should be honest themselves and take responsibility for any ethical shortcomings that occur.
Congress has written ethical leadership into law with the Sarbanes-Oxley Act, which requires CEOs and CFOs to vouch for the truthfulness and fairness of their companies' financial disclosures.
The unethical actions of corporate boards of directors can have serious consequences. In recent years, corporate governing boards have engaged in several types of unethical behavior:
- Using corporate funds to make personal loans to board members who could not repay them
- Giving themselves large bonuses when the company is experiencing financial losses
- Paying bribes to foreign officials to get around rules and regulations
Several corporations have limited the power of their boards to engage in these types of behavior.
Ethical Issues in Information Technology
The digital age has brought new ethical challenges for organizations, particularly around data privacy, cybersecurity, and digital rights.
Select the word or words that best complete the sentence.
The Sarbanes-Oxley Act effectively writes ethical leadership into law because it requires CEOs and CFOs to .
View Explanation
Congress has written ethical leadership into law with the Sarbanes-Oxley Act, which requires CEOs and CFOs to personally vouch for the truthfulness and fairness of their companies' financial disclosures.
Select the correct responses to the following question.
Which of the following are examples of ethical issues in information technology? Check all that apply.
- The need for a policy which prohibits lending corporate funds to members of the board
- The need for a policy which prohibits bribing foreign officials to overlook violations of the law
- The need to have a corporate data privacy policy
- The need to establish trust with customers by pledging to protect their private data
View Explanation
One high-profile ethical issue in recent years has been data privacy. Companies collect a great deal of personal data, and people are increasingly wary of how companies use their data. Thus, managers are advised to win the confidence of stakeholders by pledging to protect customers' private data, developing corporate data privacy policies, and not doing business with companies that lack data privacy policies.
