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ACCA Applied Knowledge · Business and Technology · Corporate codes of ethics

A company publishes a detailed code of ethics but senior managers openly ignore it and no employee has ever been disciplined for breaching it. What is the most likely consequence?

Employees will probably see the code as window dressing, which weakens the ethical culture. Codes need visible leadership commitment and consistent enforcement to be effective. Merely writing it down does not change behaviour, give legal protection or automatically increase stakeholder trust.

  1. AThe code will still be fully effective because it is written down
  2. BEmployees will regard the code as window dressing, weakening ethical cultureCorrect
  3. CThe company will become exempt from legal liability
  4. DStakeholders will automatically trust the company more

Explanation

A code only influences behaviour if management demonstrates commitment and enforces it. When leaders ignore it and breaches go unpunished, staff see it as empty words and ethical culture suffers. A written code gives no legal exemption and trust would not rise.

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