Importance and Role of Ethics in Business †Myassignmenthelp.Com

Question: What Is The Importance And Role Of Ethics In Business? Answer: Introduction In the context of this research paper, ASIC v Healey 2011 case is selected because it is the case with the commercial nature and published in the media. In addition to this, in this study ethical challenges with regards to the selected case would be discussed. Moreover, specific ethical practices would be suggested to overcome such types of commercial ethical issues. On the other hand, the concepts and roles of ethics in the business would also be discussed in order to attain the objective of the study. Case Overview In the case, ASIC v Healey 2011, the duties were breached by the company directors. Moreover, it is found that, the CFO (Chief Financial Officer), and directors of the Centro Group were breached their functions and duties through the mispresentation and misstatement of company in the financial year 2007. In addition to this, it is found that, along with the directors and CFO of the company, different companies such as: Centro Retail Trust (CRT), Centro Properties Limited (CPL), Centro Property Trust (CPT), Centro Retail Group (CER) and Centro Properties Group (CNP) had approved the financial statements of 2007 financial years (Bright Law. 2011). After some time, there were several issues in the financial reports of the Centro Group. For example, in developing and preparing of annual financial reports, they ignored more than$1.5 billion short term liabilities of CNP. It means they have not disclosed this big amount of liabilities in the financial statement of the company. In doing thi s, they divided the noncurrent liabilities. Apart from this, it is also analyzed that, they also did not disclosed $1.75 billion guarantees of CNPs short term liabilities. Moreover, they also ignored$500 million short term liabilities of CER. This indicates that, they have not fulfilled their duties properly that created legal and ethical issues (Lowry, 2012). Finding of the Case The directors approved the Centro Group solidified money related proclamations and yearly reports regardless of the mistakes. This circumstance showed the executives of Centro Group spoke to the money related misquote before partners that demonstrated the break of their obligations. The budgetary error wrong PL and accounting report is giving incorrectly course of the organizations that implies the share cost and market esteem isn't right. It demonstrates the executives not played out its obligations as not considered the enthusiasm of partners while arranged and displayed the gathering united monetary articulations. ASIC (Australian Securities and Investments Commission) brought procedures against the 7 respondent chiefs, the CEO and the 5 non-official executives for break of their executive's obligations under area 180(1), 601FD(3) and 344(1) of the Corporations Act 2001 (Cth). Healey is the main litigant chief and 6 other respondent chiefs went to an executive meeting on 6 Septemb er 2007 and displayed solidified money related explanations before shareholders or financial specialists, so that respondent executive, the CEO and the non-official chiefs have been in charge of present gathering misquotes (Dunn, 2011). Ethical Practices to Produce More Positive Scenario/Outcome Based on the identified case, it can be suggested that, the CFO as well as directors of the company should fulfill their duties by considering the organizational code of conduct. In addition to this, they should also follow the organizational ethical policy before making any decision. On the other hand, it can also be suggested that, they should adopt the principles and standards of corporate ethics to avoid ethical issues (Walmsley, Puri, 2011). At the same time, it can also be suggested that, they must follow the principals of Honesty, Integrity, Loyalty, fairness, Excellence, Obeying the law, Morale and accountability principals of ethics. Additionally, they should work as per the companys ethical policies, standards and norms. For case, they ignored the ethical policies of the company in the case (Hedges, Bird, Gilligan, Godwin, Ramsay, 2016). . Moreover, they should work only for attaining of organizational long term goals and objectives. Additionally, they should also follow the ethical code of duties to avoid such serious issues effectively. Apart from this, it is also suggested that, the CFO and director of the company must also follow the duty of care, and good faith and interest. Moreover, delegation and advice are other practices that should be followed by them in order to produce more positive outcomes. Hence, it can be said that, they should be followed all the suggested ethical practices in order to produce positive outcomes (Langford, Ramsay, Welsh, 2015). Importance and Role of Ethics in Business Ethics is more important and valuable in the business that play a lot of significant role in the improving the individual and organizational productivity. For example, ethics is important because it play a key role in attracting the investors and customers for the business. Moreover, ethics bring innovation, accountability, creditability and flexibility within the business process and strategies. For case, with the help of ethics, a company can improve its image and reputation in the eyes of global customers. Moreover, it is also accessed that, workplace issues and conflict could be handled effectively by using the principals and standards of ethic. Moreover, with the help of ethics, a company could be able to motivate and encourage its employees to fulfill the long term organizational goals. On the other hand, ethics is also improve decision making abilities of the individual at the workplace so that they can make strategic decision to solve complex business issues and challenges ef fectively. Moreover, a company could also design and create a wide range of strategies by using ethical standards to fulfill the long term goals and objectives (Giordano, 2011). At the same time, it is also found that, it improves leadership qualities and management abilities. Furthermore, ethics is also important in reducing the organizational overhead costs and improving the profitability directly or indirectly. In the same way, ethics in the business helps the business firms to attain the competitive advantages over the other competitors. For case, through the ethical concepts, a company can design and produce the products and services according to the needs of customers (The civil lawyer. 2011). In addition to this it is also analyzed that, ethics in the business improve strategic thinking of the originations as well as their employees. For instance, the company can take strategic decisions for the growth and total success of the organization. Hence, ethics is more important and significant in the business and play specific roles in the total success (Carter, Peden, Tolhurst, 2007). Conclusion On the basis of above discussion, it can be summarized that, employees or organizational people should focus on using ethical practices, standards, norms and policies at the workplace in order to overcome potential serious issues. In addition to this, it is also concluded that, in the case, the CFO and director did not followed the ethical principles and ethical code of conduct of the company that created issues and challenges in the front of them. Moreover, it can also be said that, they must consider all the ethical aspects and concepts before taking any unethical actions. The unethical actions taken by them affected the reputation of the company. Furthermore, it can also be suggested that, each and every individual must take care of about ethical rules, policies, standards and these should be adopted in conducting day to day functions. Finally, it can be concluded that, ethics is the moral standards and indicates what is right and wrong. Hence, the ethics is more important in the business and play various significant role in enhancing the organizational and individual performance effectively. References Bright Law. (2011). Centro (ASIC v Healey) case note: directors duties for financial statements. [Online]. Retrieved From: https://www.brightlaw.com.au/centro-asic-v-healey-case-note-directors-duties-for-financial-statements/ Carter, J.W., Peden, E. Tolhurst, G. (2007). Cases and Materials on Contract Law in Australia (5th ed.). LexisNexis Butterworths. Dunn, K. (2011). Corporate Law: Directors Cannot Rely on Others to Discharge Their Duties. Keeping good companies, 63(8), 480. Giordano, F. (2011). Company Secretary: Financial Reporting Duties of Directors-Ten Corporate Governance Lessons from Centro for Non-Executive Directors of Listed Public Companies. Keeping good companies, 63(7), 390. Hedges, J., Bird, H. L., Gilligan, G., Godwin, A., Ramsay, I. (2016). An Empirical Analysis of Public Enforcement of Directors Duties in Australia: Preliminary Findings. CIFR Paper, 105. Langford, R. T., Ramsay, I., Welsh, M. A. (2015). The origins of company directors' statutory duty of care. Sydney Law Review, 37(4), 489-518. Lowry, J. (2012) The Irreducible Core of the Duty of Care, Skill and Diligence of Company Directors: Australian Securities and Investments Commission v Healey. The Modern Law Review, 75(2), 249-260. The civil lawyer. (2011). The Centro matter: ASIC v Healey [2011] FCA 717 and breach of director's duties. [Online]. Retrieved From: https://www.the-civil-lawyer.net/2011/06/centro-matter-asic-v-healey-2011-fca.html Walmsley, S. Puri, R. (2011). The Centro 'Penalties' Decision - ASIC v Healey (No 2) [2011] FCA 1003. [Online]. Retrieved From: https://www.jws.com.au/en/acumen/item/582-the-centro-penalties-decision-asic-v-healey-no-2-2011-fca-1003