Values, Ethics and Professional Conduct – Secretarial Audit Compliance Management and Due Diligence Important Questions
Question 1.
Write short note on: “Ethical Dilemma”.
Or
Briefly discuss “Ethical Dilemma”?
Answer:
1. Ethical Dilemma is the situation where a person’s view regarding selecting an object or the alternative includes series of outcomes, which is very confusing. Each outcome has a serious overlapping outcome, which cannot be at a time wrong for one person but the same may be ethically wrong for the other.
2. Ethical dilemma is also known as moral dilemma. Ethical dilemmas make the situations too difficult. A person has to choose only one way from two of them – a moral or an immoral way. Ethical dilemmas can be seen everywhere in daily lives. However everybody has their own particular experience towards ethical dilemma. Ethical dilemmas assume that the chooser will abide by societal norms, such as codes of law or religious teachings in order to make the choice ethically impossible.
Example(s) of Ethical Dilemma:
- Example 1: A doctor refuses to give a terminal patient morphine but the nurse can see the patient is in agony.
- Example 2: A secretary discovers her boss has been laundering money and she must decide whether or not to turn him.
Question 2.
“Dilemma is a situation that requires a choice between options that are seen equally unfavourable or mutually exclusive”. In the light of this statement, elaborate the ethical dilemma. State the steps to resolve an ethical dilemma.
Answer:
1. Dilemma is a situation that requires a choice between options that are seen equally unfavorable or mutually exclusive. Ethical Dilemma is the situation where a person’s view regarding selecting an object or the alternative includes series of outcomes, which is very confusing. Each outcome has a serious overlapping outcome, which cannot be at a time wrong for one person but the same may be ethically wrong for the other.
2. If you find yourself in a situation when this approach doesn’t work, you can resolve a right versus right dilemma by finding the highest “right”. There are three ways to make the best choice when faced with these types of dilemmas:
- Ends-based: Select the option that generates the most good for the most people.
- Rule-based: Choose as if you’re creating a universal standard. Follow the standard that you want others to follow.
- Care-based: Choose as if you were the one most affected by your decision. Once you’ve identified an ethical right versus right di-lemma, lay out your options according to these three principles. One approach will immediately present itself as the “most right”.
Steps to Resolve an Ethical Dilemma:
1. What are the options?
List the alternative courses of action available.
2. Consider the Consequences: Think carefully about the range of positive and negative consequences associated with each of the different paths of action available.
- What will be helped by what is done?
- What will be hurt?
- What Eire the short term and long term implications?
- What kind of benefits and harms are involved and what are their relative values?
3. Analyze the actions: Action should be analyzed in different perspective.
4. Make decision and act with commitment: Both parts of analysis should be brought together and a conscious and informed decision should be made.
5. Evaluate the system: The circumstances which led to the dilemma with the intention of identifying and removing the conditions that allowed it to arise.
Question 3.
As a Company Secretary, prepare a note differentiating between concept of Ethics and Values.
OR
Authors’ Comment for Answer See December 2019 Paper
Question 4.
Analyse the differences between Ethics and Values.
Answer:
Differences between Ethics and Values :
1. Ethics refers to the guidelines for conduct, that address question about morality. Value is defined as the principles and ideals, which helps them in making the judgment of what is more important.
2. Ethics is a system of moral principles. In contrast to values which is the stimuli of our thinking.
3. Values strongly influence the emotional state of mind. Therefore, it acts as a motivator. On the other hand, ethics compels to follow a particular course of action.
4. Ethics are consistent, whereas values are different for different persons i.e., what is important for one person may not be important for another person.
5. Values tell us what we want to do or achieve in our life, whereas ethics helps us in deciding what is morally correct or incorrect in the given situation.
Question 5.
Describe Professional Misconduct in relation to members of the ICSI under First Schedule to the Company Secretaries Act, 1980?
Answer:
PART I: Professional misconduct in relation to Company Secretaries in Practice : A Company Secretary in Practice shall be deemed to be guilty of professional misconduct, if he –
(1) Allows any person to practice in his name as a Company Secretary unless such person is also a Company Secretary in practice and is in partnership with or employed by him;
(2) pays or allows or agrees to pay or allow, directly or indirectly, any share, commission or brokerage in the fees or profits of his professional business, to any person other than member of the Institute or a partner or a retired partner or the legal representative of a deceased partner, or a member of any other professional body or with such other persons having such qualifications as may be prescribed for the purpose of rendering such professional services from time to time in or outside India.
(3) accepts or agrees to accept any part of the profits of the professional work of a person who is not a member of the Institute :
Provided that nothing herein contained shall be construed as prohibiting a member from entering into profit sharing or other similar arrangements, including receiving any share commission or brokerage in the fees, with a member of such professional body or other person having qualifications, as is referred to in item (2) of this part;
(4) enters into partnership, in or outside India, with any person other than a Company Secretary in practice or such other person who is a member of any other professional body having such qualifications as may . be prescribed, including a resident who but for his residence abroad would be entitled to be registered as a member under clause (e) of sub-section (1) of section 4 or whose qualifications are recognized by the Central Government or the Council for the purpose of permitting such partnerships;
(5) secures, either through the services of a person who is not an employee of such company secretary or who is not his partner or by means which are not open to a Company Secretary, any professional business : Provided that nothing herein contained shall be construed as prohibiting any arrangement permitted in terms of items (2), (3) and (4) of this Part.
(6) solicits clients or professional work, either directly or indirectly, by circular, advertisement, personal communication or interview or by any other means:
Provided that nothing herein contained shall be construed as preventing or prohibiting:
- any company secretary from applying or requesting for or inviting or securing professional work from another company secretary in practice; or
- a member from responding to tenders or enquiries issued by various users of professional services or organizations from time to time and securing professional work as a consequence.
PART II – Professional misconduct in relation to members of the Institute in service : A member of the Institute (other than a member in practice) shall be deemed to be guilty of professional misconduct, if he, being an employee of any company, firm or person –
(1) pays or allows or agrees to pay, directly or indirectly, to any person any share in the emoluments of the employment undertaken by him;
(2) accepts or agrees to accept any part of fees, profits or gains from a lawyer, a Company Secretary or broker engaged by such company, firm or person or agent or customer of such company, firm or person by way of commission or gratification.
PART III – Professional misconduct in relation to members of the Institute generally : A member of the Institute, whether in practice or not, shall be deemed to be guilt of professional misconduct, if he –
(1) not being a Fellow of the Institute, acts as a Fellow of the Institute;
(2) does not supply the information called for, or does not comply with the requirements asked for, by the Institute, Council or any of its Committees, Director(Discipline), Board of Discipline, Disciplinary Committee, Quality Review Board or the Appellate Authority;
(3) while inviting professional work from another Company Secretary or while responding to tenders or enquirers or while advertising through a write up or anything as provided for in items (6) and (7) of Part I of this Schedule, gives information knowing it to be false.
PART IV – Other misconduct in relation to members of the Institute generally : A member of the Institute whether in practice or not, shall be deemed to be guilty of other misconduct, if –
(1) he is held guilty by any civil or criminal court for an offence which is punishable with imprisonment for a term not exceeding six months;
(2) in the opinion of the Council, he brings disrepute to the profession or the institute as a result of his action whether or not related to his professional work.
Question 6.
What are four main branches of Ethics?
Answer:
Description:
1. Descriptive Ethics – deals with what people actually believe (or made to believe) to be right or wrong, and accordingly holds up the human actions acceptable or not acceptable or punishable under a custom or law. Descriptive Ethics is also called comparative ethics because it compares the ethics or past and present; ethics of one society and other.
2. Normative Ethics – deals with “norms” or set of considerations how one should act. Thus, it’s a study of “ethical action” and sets out the rightness or wrongness of the actions.
It is also called prescriptive ethics because it rests on the principles which determine whether an action is right or wrong.
3 “Meta-Ethics” or “analytical ethics” – deals with the origin of the ethical concepts themselves. It does not consider whether an action is good or bad, right or wrong.
- It questions – what goodness or rightness or morality itself is.
- It is basically a highly abstract way of thinking about ethics.
4. Applied Ethics – deals with the philosophical examination, from a moral standpoint, of particular issues in private and public life which are matters of moral judgment. This branch of ethics is most important for professionals in different walks of life including doctors, teachers, administrators, rulers and so on.
There are six key domains of applied ethics:
- Decision Ethics.
- Professional Ethics.
- Clinical Ethics.
- Business Ethics.
- Organizational Ethics.
- Social Ethics.
Question 7.
Difference between: “Ethics” and “Values”
Answer:
Following are difference between “Ethics” and “Values”:
| Basis | Ethics | Values |
| Meaning | Ethics refers to the guidelines for conduct, that address question about morality. | Values are defined as the principles and ideals, which helps them in making the judgment of what is more important. |
| Principles Vs. Thinking | Ethics is a system of moral principles. | Values are the stimuli of our thinking. |
| Consistency | Ethics are consistent. | Values are different for different persons i.e., what is important for one person, may not be important for another person. |
| Usefulness | Ethics helps us in deciding what is morally correct/incorrect in the given situation. | Values tell us what we want to do or achieve in our life. |
| Correctness of options Vs. Priorities of Life | Ethics determines to what extent our options are right or wrong. | Values define our priorities for life. |
Question 8.
Discuss five ethical practices?
Answer:
Following arc five ethical practices as discussed below:
Description:
1 Least Harm:
- This theory deals with situations in which no choice appears beneficial.
- Decision makers seek to choose to do the least harm possible and to do harm to the fewest people.
- This principle is mainly associated with the utilitarian ethical theory.
2. Utilitarian:
- This is a normative ethical theory that places the locus of right and wrong solely on the outcome or consequences of choosing one action/ policy over other.
- It moves beyond the scope of one’s own interest and takes into account the interest of others
3. Beneficence:
- The principle of beneficence guides the decision maker to do what is right and good. This priority makes an ethical perspective and possible solution to a dilemma acceptable and resolvable.
- This is also related to the principle of utility which states that one should attempt to generate the largest ratio of good over evil possibility.
- This principle stipulates that ethical theories should strive to achieve greatest amount of good because people benefit from the most good.
4. Autonomy:
- This principle states that decision making should focus on allowing people to be autonomous i.e., to be able to make decisions that apply to their own workplace or lives.
- This ethical principle is an extension of the ethical principle of beneficence because a person who is independent usually prefers to have control over his own experiences in order to secure the lifestyle that he/she enjoys.
- In other words people should have control over their own selves as much as possible because they are the only people who completely understand their chosen type of work/life style. Each individual deserves respect because only he/she has had those exact life experiences and understands own emotions, motivations, and physical capabilities in an intimate manner.
5. Justice:
- The justice ethical principle states that decision maker should focus on actions that are fair to all those involved.
- It means that ethical decisions should be consistent with the ethical theory unless extenuating circumstances that can be justified and exist in the case.
- It means that cases with extenuating circumstances must contain a significant and vital difference from other similar cases that justify the inconsistent decision.
Question 9.
What are parameters of “Professional Ethics”?
Answer:
Following are parameters of “Professional Ethics”:
- Complying with the laws of land where business is conducted and engaging in fair practices in the light of social ethics.
- Aiming to become a sensible corporate citizen, and striving for harmony with local society.
- Disclosing information in a timely manner, and engaging in honest and transparent communications mode.
- Protecting the irreplaceable earth and contributing to the preservation of the environment.
- Respecting fundamental human rights and individuality, and building up a corporate culture with a broad vision which fosters the spirit of corporate ethics.
Question 10.
What do you mean by “Professionalism”? List any five golden rules of Professionalism for enjoying a reputable, professional and prosperous career in providing service to the client?
Answer:
Professionalism: Professionalism is the virtue, conduct, aim, value or quality that characterize or marks a profession or professional person; it implies quality of workmanship or service. Having a reputation for excellence and being thought of as someone who exhibits professionalism under any circumstances can open doors for him/her in the individual’s workplace or personal ambition.
Any Five Golden Rules of Professionalism for enjoying a reputable, professional and prosperous career in providing service to the client/organization:
1. Be accountable : It implies that one should be able to stand tall and be counted upon for all actions undertaken; this is also construed as a quality of being credible and responsible for actions performed and their consequences – good or bad.
2. Be courteous and respectful : Courteousness is more than being friendly, polite and well-mannered with a gracious consideration towards others. It makes social interactions in the workplace run smoothly, avoid conflicts and earn respect. Respect is a positive feeling of esteem or deference for a person or organization. It is built over span of time and can be lost with one single inconsiderate action. Further, continual courteous interaction is required to be maintained to enhance the respect gained.
3. Be honest, open and transparent : Honesty is a part of moral character that connotes positive and virtuous attributes such as truthfulness, straightforwardness, good conduct, loyalty, fairness, sincerity, openness in communication and generally operating in a manner for others to notice the perfection with which actions are performed. A virtue highly appreciated and valued by clients, employers and colleagues because it builds trust and personal reputation.
4. Be ethical : Ethical behaviour is acting within certain moral codes in accordance with the generally accepted code of conduct or rules. It is always safe for a professional to’“play by the rules” where the rule book is inadequate; and acting with a clear moral conscience is the right way to adopt.
5. High Integrity : Honourable action is behaving in a way that portrays “nobility of soul, magnanimity of person” derived from virtuous conduct and integrity in adherence to the dictum of “wholeness or completeness” of character in line with certain values, beliefs and principles with consistency in action and outcome.
Question 11.
“The ICSA (UK) code of professional ethics and conduct comprises four core principles”. List out the name of those four core principles?
Answer:
The ICSA (UK) Code of Professional Ethics and Conduct comprises four core principles to which all Fellows, Associates, graduates, students and affiliated members registered need to follow:
- Integrity.
- High standard of service/professional competence.
- Transparency.
- Professional behaviour.
Question 12.
What are common causes of loss of Ethics & Values?
Answer:
Following are common causes of loss of Ethics & Values:
1. Unclear Policies in some cases, managers and employees exhibit poor ethical behaviour : The Company does not offer a clear model of ethics. Some businesses have no formal ethical policy documents and offer no guidance at all. Others have policies that are unclear, vague, inconsistent or not consistently enforced.
2. Conflict between Organisational & Individual Goal : When the Organizational & Individual Goals overlap, it becomes difficult to balance things. The problem arises when one thing has to be sacrificed for the sake of others. To achieve Organisational goal, Individual goal, has to be compromised and vice versa so this leads to Ethical Dilemma.
3. Cultural Value & Background : Every individual decision is based on background. For some people it may be ethical to give priority for self and then decide about others but for some others it may be other way round. Thus, background & value system creates the ethical Dilemma.
4. Dynamic & Different Human Nature : Ethical Dilemma arises due to difference of the opinion among the group of people.
5. Pressure from Management : Each company’s culture is different, but some companies stress profits and results above all.
6. Negotiation Skills : Pressure to get the very best deal or price from another business can cause some workers to negotiate in bad faith or he to get a concession.
7. Conflicting Values : Ethical dilemmas may occur because of conflicting values between two or more people in an organization. One manager may value product quality over quantity while another may value thriftiness.
Question 13.
Write note on: “Inclusion in an Organisation Transparency Checklist”.
Answer:
An Organization Transparency checklist includes the below mentioned:
- Board meetings including details like: dates, times and locations of Board meetings are conveyed at least
- one week in advance of the meetings.
- Financial disclosure statements.
- Freedom of information legislation.
- Budgetary Reviews.
- Annual Audits.
- Annual Reports (Posted on the organization’s website for easy access).
- Strategic plans and priorities.
- Board of Directors and names of key staff as well as their contact information.
- Straight talking leadership.
- Open culture and operations.
- Disclosed partnerships.
- Frank, open communications including the good and bad.
- Core Values & Code of conduct.
Question 14.
What are the strategies for overcoming from the Evils?
Answer:
Strategies for overcoming from the Evils: The human traits and characteristics shape human behaviour and a few probable solutions are mentioned below:
Satisfaction:
To achieve happiness it is essential that the culture of ‘being satisfied’ is developed. The most challenging and unanswerable question on satisfaction is “How much is Enough”. The issue is very difficult to resolve especially in the corporate field where expansion is the prime direction in which it is supposed to move yet it is the need of the hour to understand and remain satisfied with what is achieved within the validly available means.
Ends not to justify the means:
The results matter and what was done to achieve the same is of no consequence. An irregular or an unethical action leading to a good outcome may not necessarily justify the method of achieving the goal. It is essential to note that however worth the cause may be the means to achieve the same should also be equally valid.
Ethical Leadership:
The Professional should lead the organisation like Krishna as he led Pandavas to success by guiding them to fight morally. It is the duty of the leader driving the organization to ensure use of proper and ethical means in his conduct. It is equally essential that the leader walks the talk and sets an example of good governance and ethical leadership.
Character:
Professional should always consider the old idiom: If Character Is Lost Everything Is Lost. The idiom fully highlights the importance of good character. Character is generally built or earned by virtues like courage, honesty, values and ethics. Great leaders and eminent personalities are judged by their character. A good character is synonymous to reliability.