Ethics & Governance: key terms, formulas and examples
Ethics and governance keep a company trustworthy: compliance, transparency, conflict-of-interest rules, whistleblower channels and fair treatment of stakeholders.
Example
Accepting a supplier's expensive gift risks bribery.
Takeaway
When in doubt, disclose, ask compliance and pick the honest option.
Key terms
- Corporate governance
- The rules and bodies that direct and control a company.
- Conflict of interest
- When personal gain could bias a business decision.
- Corporate social responsibility
- A company's duty to act well toward society and the planet.
- Risk management
- Finding, ranking and reducing threats to a business.
- Whistleblower
- Someone who reports wrongdoing inside an organization.
- Bribery
- Offering something of value to gain an unfair advantage.
- Insider trading
- Trading shares using secret information.
- Data privacy
- Protecting personal information from misuse.
- Compliance
- Following the laws and rules that apply to a business.
- Fiduciary duty
- A duty to act in another party's best interest.
- Code of conduct
- A written guide to expected behavior.
- Sustainability
- Meeting today's needs without harming future generations.
- Fraud
- Deceiving someone to gain money unfairly.
- Ethical dilemma
- A choice between two values.
- Transparency
- Being open about decisions and information.
- Antitrust law
- Rules that protect competition.
- Product liability
- Responsibility for harm caused by a product.
- Contract
- A legally binding agreement.
- Breach of contract
- Failing to keep a contract's promises.
Formulas
Profit margin(R − C) ÷ R × 100
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