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BUSINESS ETHICS AND SOCIAL RESPONSIBILITY  Sound accountability structures are the most
01.2 Core Principles Underlying Fairness, important aspect of prevention and
Accountability, and Transparency in business detection of corruption.
 A civil society organization without proper
Notions of Fairness, Accountability, and accountability systems is fragile and open
Transparency to rumors about mismanagement and abuse
Business leaders influence the scope and of power.
character of formal ethics programs and the  Worst of all, it will prevent it from enjoying
integration of ethics into everyday organizational respect and full legitimacy in the eyes of its
life. stakeholders.
However, business leaders in most
countries most of the time are not held Accountability - what it is:
accountable for dysfunctional moral, social,  To be accountable is to be liable to explain
and environmental performance. or justify one's actions and decisions.
Many are seldom held accountable for  Accountability is the process of
adverse impacts of their decision-making, for explanation and justification.
example, deepening poverty, social  Holding to account is the process of
disintegration, and environmental requiring explanation and justification,
degradation. but it is also about testing, forming a
judgment, and if necessary, taking action.
There is a need to convince managements  Accountability implies responsibility: it is
that they should develop their "integrity reasonable only to hold people to account
capacity" which is the individual and/or for those things for which they are
collective capability for repeated process responsible.
alignment of moral awareness, deliberation,
character, and conduct that demonstrates Accountability Structures
balanced judgment, enhances sustained Accountability, then, is the obligation to
moral development, and promotes demonstrate that work has been conducted in
supportive systems for moral decision- compliance with agreed rules and standards or
making. to report fairly and accurately on performance
results vis-a-vis mandated roles and/or plans.
These four key dimensions of integrity
capacity - process, judgment, development, Examples of Accountability in Business
and system - should present challenges for 1. Performance evaluation
business leaders so that they become more 2. Establishing a code of ethics and conduct
aware of moral concerns and thus respond more 3. Compliance with regulations
effectively to the problems that arise. 4. Quality control
5. Financial management
6. Safety and security
Accountability 7. Environmental responsibility
It is the embodiment of honesty,
transparency, and taking responsibility for one’s
words and acts and seeing beyond self interest. Fairness
- It is the willingness to accept responsibility It is the quality of making judgments that
- It is a state of being accountable on are free from discrimination. Judges, umpires,
obligation. and teachers should all strive to practice
fairness. Fairness comes from the old English
faeger, meaning "pleasing, attractive:'

Why is accountability important? Fairness

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This makes sense given that the word is Transparency is identified as an important
also used to describe physical beauty. mechanism for guaranteeing social
When someone shows fairness in making a accountability.
decision, he is pleasing to all parties involved
and offering a solution that is attractive to Both business and non-profit organizations
everyone. should be open and honest about their
operations, finances, and decision-making
Fairness in the context of a business processes.
organization, involves balancing the interests
involved in all decision-making including any Example: Appropriate information
decisions related to hiring, firing (including the disclosure is necessary to inform donors about
investigatory process), and the compensation, how their money is used by these organizations,
rewards system, incentives, recognition and due the percentage of funds directly used to help
process. people, the activities and the results achieved,
GOAL: to irradicate the role of and how these organizations' budgets are
discrimination in decision-making. distributed among different organizational
functions.
However, employees perceive their
organizations as just when they believe rewards Examples of Transparency
and the way they are distributed are fair. In other  Financial reporting
words, fairness or equity can be subjective;  Disclosure of conflicts of interest
what one person sees as unfair may be perfectly  Product labeling
appropriate for another. In general, people see  Customer feedback
allocations or procedures favoring themselves  Employee feedback
as fair.  Data privacy
Overall, fairness has to do with justice,
which is to give to another that which is due This includes providing clear and concise
him or her. More concretely, justice: information to stakeholders, such as investors,
1. looks at the balance of benefits and employees, and customers.
burdens distributed among members of a
group; and/or Transparency allows stakeholders to
2. can result from the application of rules, understand whether the activities of social
policies, or laws that apply to a society or a institutions such as international organizations
group. and NGOs provide a genuine service to civil
Examples of Fairness society and whether money is used
 Pay equity appropriately.
 Diversity and inclusion
 Customer service
 Environmental responsibility
 Equal opportunities NOTIONS OF COMPETENCE, PROFESSIONA
 Employee benefits LISM, AND RESPONSIBILITY
 Fair competition Studies show that moral character and
technical competence are viewed as being
equally important for worker excellence.
Transparency The greater the need to engage with co-
Transparency allows an individual to be workers who have different values, interests and
more authentic and genuine in his/her needs, the more important it becomes for
relationships to express his/her points of view employees to be able to connect with
and to actively work to find shared meanings colleagues, to understand different perspectives,
and objectives. to balance sometimes conflicting claims and to
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act competently both interpersonally and also be won in the ability domain simply by
ethically. demonstrating competence.

In order to do that, a responsible worker This trustworthiness is all the more important
needs a minimum set of skills, as well as moral in managers: those who break this
and relational qualities. psychological contract with subordinates,
demonstrating they are not trustworthy, will find
employees are less satisfied and less
MINIMUM COMPETENCIES EXPECTED committed, have a higher intent toward
OF PROFESSIONALS turnover, engage in less citizenship behavior,
and have lower task performance.
Technical skills encompass the ability to apply
specialized knowledge or expertise. When you Managers who betray trust are especially
think of the skills of professionals such as civil likely to be evaluated negatively by followers
engineers or oral surgeons, you typically focus if there is already a low level of leader—member
on the technical skills they have learned through exchange. Once it is violated, trust can be
extensive formal education. regained, but only in certain situations that
depend on the type of violation. If the cause is
Human skills is the ability to understand, lack of ability, it is usually best to apologize and
Communicate with, motivate, and support other recognize you should have done better. When
people, both individually and in groups, which lack of integrity is the problem, though,
defines human skills. Many people are apologies do not do much good.
technically proficient but poor listeners, unable
to understand the needs of others, or weak at
managing conflicts. Because managers get The Relationship of Accountability
things done through other people, they must /Stewardship /Responsibility with Ethical
have good human skills Businesses

Conceptual skills are the skills and the mental Scholars have recently considered ethical
ability that managers must have to analyze and leadership from a new angle by examining
diagnose complex situations. Decision-making, servant leadership. Servant leaders go
for instance, requires managers to identify beyond their own self-interest and focus on
problems, develop alternative solutions to opportunities to help followers grow and
correct those problems, evaluate those develop. They do not use power to achieve
alternative solutions, and select the best one. ends; they emphasize persuasion.

The working professional also needs "relational Characteristic behaviors include listening,
intelligence (RI)" in order to connect and empathizing, persuading, accepting
interact effectively and respectfully with people stewardship, and actively developing followers'
and stakeholders from various backgrounds, potential. Because servant leadership focuses
diverse cultures, and with different interests, on serving the needs-of others, research has
inside and outside the organization, and to build focused on its outcomes for the well-being of
lasting and trustful relationships. RI is based on followers.
a combination of emotional intelligence and
"ethical intelligence." What are the effects of servant leadership?
 One, study of 123 supervisors found it
Part of the responsibility of the worker is to be resulted in higher levels of commitment to
trustworthy: employees need to demonstrate the supervisor, self-efficacy, and
that they have integrity, benevolence, and ability perceptions of justice, which all were related
in situations where trust is important. Trust can to organizational citizenship behavior
(OCB). This relationship between servant
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leadership and follower appears to be
stronger when followers are focused on
being dutiful and responsible. Women in Organizations
 Second, servant leadership increases team Several studies show that business
potency (a belief that one's team has above- organizations stand to gain from the presence of
average skills and abilities), which in turn women, especially on their Boards of Directors.
leads to higher levels of group performance. Although women will remain a distinct minority
 Third, a study with a nationally on boards for the foreseeable future, women
representative sample of 250 workers found continue to be appointed to boards through their
higher levels of citizenship associated with a personal relationships as well as track records
focus on growth and advancement, which in and appropriate expertise (Burke, 1997).
turn was associated with higher levels of
creative performance (Robbins and Judge, Findings appear to show that, among
2013). others: (1) firms employing more women
managers have probably done a better job of
recruiting capable managers from the total
The Notion of Organizational Diversity and available talent pool, and consequently will be in
the Role of Women in Business a better position to link with customers,
Organizations employees, and other constituencies (Shrader et
Organizations use a variety of efforts to al., 1997);
capitalize on diversity, including recruiting and Findings appear to show that, among
selection policies, as well as training and others: (2) firms having a higher proportion of
development practices. women serving on their boards do engage in
charitable giving to a greater extent than firms
Three distinct components of Effective, having a lower proportion of women serving on
comprehensive workforce programs their boards.
encouraging diversity: Findings appear to show that, among
others: (3) investors (in Singapore) value the
 First, they teach managers about the legal diversity and potential contribution of women on
framework for equal employment the board of directors, that is, the appointment of
opportunity and encourage fair treatment of female directors may be viewed as a means of
all people regardless of their demographic improving corporate governance of firms whose
characteristics. boards may be dominated by old-boys networks,
 Second, they teach managers how a besides adding to the diversity of corporate
diverse workforce will be better able to serve boards (Ding and Charoenwong, 2013);
a diverse market of customers and clients. Findings appear to show that, among
 Third, they foster personal development others: and (4), since women represent a
practices that bring out the skills and significant proportion of the customer base in
abilities of all workers, acknowledging how many corporations, the presence of female
differences in perspective can be a valuable directors would bring the female perspective to
way to improve performance for everyone. the boardroom and positively impact the bottom-
line of companies, as explained by evidence that
Some diversity programs are truly effective in male CEOs find the viewpoints of female
improving representation in management. They directors beneficial in understanding female
include strategies to measure the representation clients (Burke, 1994).
of women and minorities in managerial
positions, and they hold managers accountable
for achieving more demographically diverse
management teams (Robbins and Judge, 2013).
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