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IAI Actuarial Core Principles · Business Finance · Ethical responsibilities of owners and managers

Which of the following is the best example of a company embedding ethics into its organisation, rather than merely stating it?

The best example is a code of conduct supported by training, a confidential whistleblowing channel and real disciplinary consequences. These mechanisms make ethical expectations operational, whereas a website statement or minimum legal compliance alone does not embed ethics in behaviour.

  1. AA code of conduct backed by training, a confidential whistleblowing channel and disciplinary consequences for breachesCorrect
  2. BA mission statement on the website promising honesty
  3. CA policy of complying with the minimum legal requirements only
  4. DAwarding bonuses solely on short-term profit targets
  5. A board statement that ethics is the responsibility of each individual employee alone

Explanation

Ethics is embedded when it is supported by systems: a code, training, a safe way to report concerns and enforcement. A website statement or minimum compliance does not change behaviour, and profit-only bonuses can undermine ethics. Leaving it to individuals provides no organisational support.

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