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

A company's code of ethics states that integrity is a core value, yet the sales director is promoted after repeatedly misstating sales figures to meet targets. What is the MOST likely effect on the code's implementation?

The code's credibility will be undermined and staff will see it as window dressing. Promoting someone who misstated figures shows that results are rewarded over integrity, so employees will follow what is actually rewarded rather than the written values.

  1. AEmployees will see the code as mere window dressing and its credibility will be underminedCorrect
  2. BEmployees will treat the code as more binding because targets are important
  3. CEmployees will be unaffected because the code is a written document

Explanation

Rewarding unethical conduct signals that stated values are not really applied. This damages credibility and encourages staff to follow what is rewarded rather than what is written. Behaviour is influenced by observed consequences, so the claim that staff are unaffected is wrong.

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