Skip to content

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

A manager at Corvo Co meets a sales target by pressuring staff to bend rules. The code of ethics states integrity is a core value, but bonuses are based solely on sales. What is the main implementation weakness?

The main weakness is that the reward system conflicts with the stated values. Bonuses based solely on sales signal that results matter more than integrity, so staff follow the incentives and the code loses credibility. Rewards and appraisal must be aligned with the code.

  1. AThe code is too long
  2. BReward systems conflict with the stated values, undermining the code's credibilityCorrect
  3. CStaff have not been given a copy of the code
  4. DThe code has not been approved by shareholders

Explanation

When incentives reward results regardless of how they are achieved, staff take the real message from the rewards and not the code. Alignment of reward and appraisal systems with ethical values is essential. The scenario does not say the code is long, undistributed or lacking shareholder approval.

Did you get it right without looking?

One question tells you little. A timed set on Corporate codes of ethics shows your real accuracy, how long you take and where you lose marks.

Practise Corporate codes of ethicsFree diagnostic mock

More Corporate codes of ethics questions