Boards of Directors
‘Inside’ and ‘Outside’ directors
Board composition: former CEOs and COOs, academicians,
lawyers, government officials, and bankers.
Financial institutions and investment companies as Board
Members: Germany, Denmark, Sweden, Belgium, and Italy
Holding Boards/Board Members accountable
Ethics and Management
Stakeholders – anyone who has a financial
interest, stake, or claim in an organization
and/or what it does
Shareholders, customers, employees, interest
groups, government, etc.
What are a company’s responsibilities to its
What are the company’s responsibilities to customers?
What are a company’s responsibilities to its employees?
Prioritize the three stakeholders above from most important
Q: In order, list the most important stakeholder
to the least important e.g. 1,2,3,4 :
Government, employees, owners
Be ready to support your ranking with sound
Ethics – a code, usually belonging to a profession or
occupation, indicating what is right and wrong;
acceptable practices and behavior
Ethical behavior has to do with adhering to a code of
Social Responsibility ?
There is one and only one social responsibility
of business—to use its resources and engage in
activities designed to increase its profits so long
as it stays within the rules of the game, which is
to say, engages in open and free competition
without deception or fraud. –Milton Friedman
Morality has to do with adhering to principles of good versus bad
behavior; usually on the basis of philosophy or religious belief
Kohlberg’s Levels of Moral Development:
Ethical Decision Making
“When in Rome…” (Moral Relativism)
The “American Express” Approach
Is there such a thing as universal truth?
Kant and Cavanaugh
Kant: A person’s action is ethical, only if he is willing to have that same action
taken by everybody else, who is in a similar situation.
A person should never treat another human being simply as a means, but
always as an end.
Application: Adding false expenses to a company expense account.