Business Studies

In setting ethical standards, perhaps the most effective step that a company can take is to _________.


ANSWER

demonstrate top management support of ethical standards


SOLUTION
The top management is ultimately responsible for its firm’s success or failure, as well as for the ethical climate and practices of its company. As has been stated earlier the ethical tone of an organization is set at the top, the actions and attitudes of the board greatly influence the ethical climate of an organization. The directors on a company’s board assume legal responsibility for the firm’s resources and decisions. Board members have a fiduciary duty, i.e., a position of trust and confidence.
Due to globalization and the enhanced role of media and technology, the demand for accountability and transparency has increased greatly. This calls for ethical decision-making as well as ethical decision-making framework. 
A code of ethics should reflect top managements’ desire for compliance with the values, rules, and policies that support an ethical climate. The development of a code of ethics should involve the President, Board of Directors, and Chief Executive Officers who should be implementing the code.
Legal staff should also ensure that the code has assessed key areas of risk correctly and that it provides buffers for potential legal problems. 
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