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

A multinational has a group code of ethics. Its subsidiary in a country where facilitation payments are customary finds the code's ban on them hard to apply. Which approach best embeds the code while recognising the difficulty?

The best approach is to keep the ban across the whole group while giving local training, practical guidance on handling payment demands and support for staff who refuse. This keeps standards consistent and makes the code workable, rather than excusing local custom or diluting the code.

  1. AMaintain the ban group-wide, and provide local training, guidance on handling such demands and support for staff who refuseCorrect
  2. BAllow the subsidiary to ignore the ban since local custom prevails
  3. CRemove the ban from the group code to avoid inconsistency
  4. DApply the ban only to head office staff

Explanation

A consistent group standard preserves integrity and legal exposure, while practical guidance and support make it workable locally. Deferring to local custom or diluting the code undermines its purpose and creates inconsistent standards, and limiting it to head office is arbitrary.

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