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who is Attract Logan
- associated with the development of Australian corporate ethics and the pace of sustainable practices in business life. Often referred to an ethicist achieved widespread recofnition during the 90s for her role as director of consulting with st james ethics centre in sydney. recently joined Australian operations of KPMG.
- Her work involves a broad range of ethical and sustainability projects including carrying out ethical audits of organisational values and assisting management in uderstanding, in an ethical context how the client's employees experience the firms system and communications. also helps clients develop sustainability benchmarking and ways of using triple bottom line reporting on social, environmental and financial outcomes.
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Attracta Lagan, senior executives and Professor Ken Trotman of UnnSW are all part of an ethics and conflicts committee to deal with issues of professional conduct and conflicts of interest within KPMG operations.
- This cousil provides indpendent perspective on auditor imdependence including:
- 1. reviewing the firm's policies and procedures in relation to ethics, independence and conflict checking,
- 2. Providing advice to the board, ceo and national managing partner, on risk and regulation, on ethical issues and potential conflicts of interest.
- 3. dealing with specific matters relating to ethics and conflicts referred to the committeede by KPMG staff.
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Attracta Lagan following speech to oil industry leaders-emphasises what 2 phrases?
"The experiences of global organisations such as BP, Shell, Rio Tinto and BHHP Billiton have demonstrated how protecting corporate reputations means moving beyond the rlegal requirementa and being seen to respond to societal expectations of socially and acceptable business standards. Ethical leadership means assisting employees to hone the skills necessary to balance these, often competing, stakeholder tensions - succeess now depends on managing organisational cultures.
- Moving beyond the legal requirements, and
- Assisting employees to hone their skills.
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Moving beyond the legal requirements - the conduct of 21st century business will be regulated in what to ways
- 1. through the traditional framework of legal and regulatory mechanisms and,
- 2. through a framework of acceptable values, corporate citizenship and social responsibility.
- (legal and ethical -while easy to define the interrelationsihips between business law and business ethics are more complex).
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what is an example of a legal and ethical conduct?
- fighting bushfires
- donating blood
- serving on juries.
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what is an example of both illegal and unethical conduct?
All forms of sexual harassment in the workplace.
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what is an exampl of legal but unethical conduct in the workplace?
calling in a casual employee for such a short period that the cost of getting to work exceeds the wages paid.
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what is an example of illegal but ethical conduct?
decision by an employee to strike in support of some social or political issue despite the stike being prohibited by the workplace relations act (eg. Australian unionists refusal to unload Indonesian ships during conflicts over East Timor).
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the question of what is ethical may well be a matter of personal definition. There may be disagreement about the appropriate moral course and about the best ways to prepare employees for such a course.
this is why it is important to assist employees to hone their skills.
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Assisting employees to hone their skills
Business ethics is not just and academnic pursuit but 'action guidiing'. It is suggested that ethics skills can be learned, implying a training role for the HR department. It is also suggested that it is better to avoid the notion that business eithics is about 'good' and 'bad' people or organisations. Rather it is abut preparing people for decision making in complex situations where there are a number of competing stakeholders.
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Can we train our employees to be ethical?
Perhaps the only way to ensure ethical decisions is to have them made by ethical people.
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what is ethics
ethics consists of a set of guidelines as to acceptable conduct directed towards resolving conflicts of interest so as to enhance societal wellbeing.
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ethical and mornal conduct can be taken as synonymous - leading to the follow defition of ethics and morality
morality is, at the very least, the effort to guide one's conduct by reason - that is, to do what there are the best reasons for doing - while giving equal weight to the best interest of each individual who will be affected by one's conduct.
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what are the four general characteristics of ethical or moral behaviour? (Grace and Choen)
- 1. Behaviour is generated by motives that go beyond self-interst for example, an employee refuses a chance at a highly paid promotion knowing that he/she intends to retire at the end of the year.
- 2.The principles underlying the behaviour can be universalised. In other words, we would expect widespread agreement that this is 'the right thing to do' Condemnations of racial vilification in a workplace is an example.
- 3. It should be possible to defend an ethical decision with a reasoned argument. Ethics in not just about conduct based on biases, tastes or mere preferences. In a business situation, a decision to install expensive energy-saving technology could be justified on the grounds of the firms duty to pursue environmentally sustainable outcomes.
- 4. Moral action is not just a matter of theoretical or academic interest . It is 'action-guiding'. This characteristic might remind us that it is not ethical conduct for a firm just to adopt a code of ethics. The actions that flow from that adoption are the heart of the ethics.
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utilitarian approaches
assume that ethics is about finding the best outcome for all those who have a stake in the decision - which strategy will bring about the greatest happiness or good for the greatest number?
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what is consequentialism?
- the real tests of our ethical position are the ultimate consequences of our decision, not just the immediate outcomes - difficulty with this approach is to know how to measure happiness or good.
- once we recognise stakeholderisms reliance on consequentialism we understand why corporateions that embrace stakeholderism find themselves attempting the intellectually impossible task of weighing all of and act's certain and possible effects on a potentially infinite number of stakeholders.
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Deontological approaches
- assume that ethics are based on duties that we owe to others.
- focused on obligations and responsibilites that exist prior to our actions. can be difficult when more than one stakeholder is owed for a duty eg managers duty is to generate profits for shareholders so to engage in socially responsible activity at the firms expense is misdirect duty.
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Virtue ethics approaces
are less concerned with outcomes and duties and emphasise the importance of the role of moral people in ethical decision making. (ie attracta lagan suggesting that organisations should help employees hone their skills in ethical decision making.) For HR manager it might demand less in the way of training but considerably more in the way of careful recruitment.
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ethics and general business issues
- there has been increasing evidence that there has been agrowing mistrust of corporate morality. 35% of people in a survey in 2001 believed that being ethicaland fair in business was more important that good servicec, innovation, communication, teamwork, technological proficiency and new techniques.
- public are most likely to trucs drs, teachers and clergymen whicl not likely to trust journalists, politicians and business leaders (scientists and police were in the middle)
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enronitis and its causes
Collapse of enron can tell us much about the growth of unacceptable business cultures. concentating too much on technical deficiencies in accounting and corporate governance, which may ignore the underlying cause of the collapse of ethical structures. The real prolems lie in deep-seated cultural influences. An Engon cultural centerpiece was that money and access to power and privilege could be used to buy off or coopt those who should have scrutinised Enron's reckless and illegal conduct.
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who were the cooptees in enron
- 1. the auditors (received 50 mil for silence)
- 2. Audit committee ( 1 member had a consulting contract, 2 benefitted from academic donations to their universities and all members were shareholders of Enron.
- 3. Politicians (received donations from Enron)
- 4. Corporate regulators (chair of commission to a job in a texas uni with donations from enron and later became a member of the audit committee).
- 5. Senior managers (remuneration and benefits were tied to earnings which, in final years were more imaginary than real).
- 6. Senior managers, auditors and politicians (were admitted to a regional power elite in Houston with strong links to Washington, charity dinners, trade functions, sport sponsorships, political fundraisers and expensive clubs).
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what is a whistleblower
persons who make a disclsure about improper conduct in a public or private organisation.
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sherron watson
advised CEO of Enron that improper accounting would lead to the collapse of the company. worked together with FBI and worldcom - named person of the year for her contribution as a wistleblower.
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which states are whistleblower states?
Victoria and SA have specific whistleblower legislation. It is al provided by bodies such as the independent commission againts corruption (ICAC) in NSW and Crimes Misconduct Commission in QLD.
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Best Developed of legal frameworks is in VIC - Whistleblowers Protection ACT 2001 featuring:
- 1. Deals with improper conduct by public bodies such as government departmerns, universitites and hospitals, and public officers such as members of parliment, council officers and police officers.
- 2. A whistleblower is defined as person who makes a disclosure about improper conduct on the part of a public body or public officer (VIC law only covers public bodies)
- 3. The whistleblower must disclose the conduct to the employer of the person whose conduct is in question, or to the ombudsman.
- 4. The conduct must be such that the person has committed a crime or could be dismissed for that conduct.
- 5. If the disclosure is proper, then the whistleblower is protected from civil, criminal or disciplinary procedings, will not be in breach of any confidentiality agreement, cannot be sued for defamation and can sue from any losses resulting from reprisal.
- 6. Persons found guilty of repriasal activity can be imprisoned for up to 2 years.
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in late 2003 a new ethical regime based on comply or explain forced companies to explain why they don't meet practice recommendations in areas such as directors'. For the first time companies would be required to give details of rewards to the five highest-paid executives covering (role for HR department to record and report)
- 1. sign on payments
- 2. salary
- 3. Fees
- 4. Non-cash benefits
- 5. Bonuses and profits as they accrue
- 6. Superannuation
- 7. The value of shares held and options cranted
- 8. Loans
- 9. Termination and options granted.
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ethics issues and HRM -
Material on the new ASX rules suggests, there will be operational aspects of the ethical workplace to be dealt with (record-keeping and reporting to ensure proof of compliance). There may be a much more strategic role in developing pervasive ethical cultures through recruitment of good people(virtue ethics approach) or in training people to make good decsions in complex stakeholder situations(utilitarian approach)- much easier for an HR manager to justify any of these endeavours if the HR department is above reproach.
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who shoud carry the responsibility for creating, implementing and sustaining ethical orgaisational behaviour?
- there can be no doubt that legal departments, finance offices and groups supporting the governance function will play a large part in overseeing legislative and regulatory compliance. Sudies suggest that responsibility for ethical leadership should cut across all functions and managerial levels, including line and senior managers. HR is 'well positions' for creating, implementing and sustaining ethical organisation behaviour. The following aspects of HR work as crucial for such a role:
- 1. Organisation Culture
- 2. Communication
- 3. Training
- 4. performance management
- 5. Leadership
- 6. motication
- 7. Group dynamics
- 8. Organisation structure.
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what is the ethical implication of the roles of hr professions and what are their function. - Monitoring
HR monitors conduct in the organisation for compliance with laws and policies.
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what is the ethical implications for an hr professional - modelling
HR attempts to enhance ethical conduct by serving as an ethical role model.
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What is the ethical implications for an hr professional - advisory
HR advises organisation members on ethical standards and policies.
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What is the ethical implications for an hr professional- organisational
HR defends the organisation's actions when confronted by outside agencies.
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What is the ethical implications for an hr professional - investigative
HR investigates unethical/ethical situations and complaints.
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what is the ethical implications for an hr professional - advocacy
HR acts on behalf of employees, HR protects employees from reprisals from management.
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what is the ethical implications for an hr professional - educative
HR trains or distributes information on ethics policy.
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What is the ethical implication for an hr professional- questioning
HR act to questions the ethical dimension of managers decisions.
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what is the consequence of the multiple roles taken up by HR people?
Role conflict leaving them caught in complex ethical dilemmas ie advocacy for employees and supporting management decisions.
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The HR department as ethical role model.
Responsibility is place on HR people to keep their own ethical houses in order. HR departments will need to develop the highest levels of credibility and authority if this is to be achieved.
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Unethical conduct in HRM practice - discrimination issues
involving grounds such as maternit leave, pregnancy, and 'glass ceilings' barring access by women to senior positions.
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unethical conduct in HR practice - recruitment issues
especially those dealing with the treatment of of applicants, inviting applicants to fruitless interviews tomake up the numbers or to satisfy gender balance requirements, considergin psychological tests of applicants without giving the opportunity to applicants to see or rebut their contents. Under this heading we can also include unethical applicant behaviour, such as the falsification of academic certification, employment history and references.
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unethical conduct in HR practice - whistleblower issues
where in the public interest, employees reveal unpleasant truths about their workplaces and, as a consequence are punished, fired or vilified.
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unethical conduct in HR practice- basic rights issues
- where the ethical discussion is about, say the 'right' to be given meaningful work, the 'right' to a just wage or the 'right' to strike
- from the employer's perspective - questions of the 'right' to expect loyalty and confidentiality, for example, and the 'right' to dismiss.
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unethical conduct in HR practice - Privacy issues
Including questions of confidentiality (eg employees' medical records), Surveillance (eg installation of cameras in work areas) and the proper use of workplace email and internet facilities. These might also include the 'right' to a private life or, as it is seen by organisations such as the Australian Council of Trade unions, the right to an appropriate balance between work and lifestyles
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unethical conduct in HR practice - Testing issues
at both pre-employment and post-employment stagesThese include personality testing and DNA testing to detect propensity to contract illness later in life. Pos employment testing includes drug and alcohol testing on the job.
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unethical conduct in HR practice - Salary and benefits issues
large payouts and taking them when the company is not doing well financially and your role has contributed.
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unethical conduct in HR practic - Employee protection issues
in situations where an employer company is wound up (eg ansett) or where a company outsources some functions and attempts to transfer its employees to the outsourcing provider (sometimes on less favourabe conditions).
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KPMG fraud survey (2002)
surveyed 2000 of Australia's largets firms and public bodies concerning the incidence of fraud in the organisations. Also included were questions about thenature and causes of unethical behaviour in each organisation - results indicated that there were considerable implications for the HR Department.
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