Code of Conduct

Group 2
S.M.Nabeel Imtiaz Asim Kumar Kundu Khandaker Raihan Hossain Tanzina Zubaida 1110280090 0910118090 1020365090 1020632090
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Code of Conduct

The Plan
Significance of Code of Conduct Essential Elements Novartis Findings Contemporary Issues and Challenges

Code of Conduct

The Significance
What is it? Why do we need it? Any repercussions of its absence?

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The Essential Elements

1. 2. 3. 4. 5. 6. 7. Compliance with Laws and Regulations Competition & Fair Dealing Corporate Opportunities Insider Trading Conflict of Interests Political Contributions Environmental
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Essential Elements (Contd.)

8. Discrimination & Harassment 9. Payments to Government Personnel 10.Confidentiality 11.Health & Safety 12.Financial Matters 13.Use & Protection of Business Assets 14.Reporting Illegal & Unethical Behaviour
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Exploring the Essentials

Code of Conduct

Compliance with Laws and Regulations

Importance
Fundamental to survival Determinant of Goodwill Well versed with the big picture

Failure
Regulatory intervention Suspension in extreme case Loss of Goodwill
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Competition & Fair Dealing

Issues
Cut throat era Seeking to out perform Gift has to be well defined

Do not
Steal proprietary information Misuse the possession of trade secrets Venture into back door lobbying
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Insider Trading
Deals with confidential information like details of strategic alliances, R&D data etc. Focuses on senior management Critical to companys survival; hence enforced with a two tier structure: Ethics & Compliance Committee (ECC) The Compliance Officer (CO)
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Conflict of Interest
Exists when self interest interferes with firms interest Typical Scenarios include:
An employee taking part in evaluation in selection process of a bidder or supplier when the contesting party is related to the person in some capacity. An employee failing to disclose in the selection process that the job candidate is related to him An employee providing part time services to the competitor of his employer
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Conflict of Interest (contd.)

Difficult to ascertain its presence hence there should not only be:
elaborative guidelines

But also
culture of confiding and consulting the superiors

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Discrimination & Harassment

Never exists in paper; always exists in reality There should be a culture of zero tolerance for:
The display or transmission of inappropriate or offensive pictures, cartoons, posters, jokes, graffiti or written materials Any discriminatory practices relating to recruitment; selection; promotion; termination of employment; conditions of service and training and development

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Payments to Govt. officials

Difficult to implement across the planet The word Bribery could not encompass the mammoth usage of grey transactions hence now we have:
Facilitation Payment

Not illegal in some countries; especially belonging to developing world

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Confidentiality
Similar to Insider Trading but broader in context
All staff is responsible for the appropriate handling and use of confidential information Customers should be made aware that the information they give may be recorded, and shared, and for which purposes Access to confidential information should be restricted to a need to know basis
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Financial Matters
Under the magnifying glass after the global recession It covers:
Honest, accurate and timely recording and reporting of information All of the Companys books, records, accounts & financial statements be maintained in reasonable detail;

Vital to reach correct Business Decisions

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Novartis Bangladesh
Compliance with laws, Competition & Fair Dealing, Environment, Health & Safety, Confidentiality Insider Trading, Conflict of Interest, Use & Protection of Business Assets Corporate Opportunities, Political Contribution, Discrimination & Harassment, Payments to Govt. Officials
Financial Matters, Reporting Illegal & Unethical Behaviour Code of Conduct
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Contemporary Issues & Challenges

Why do managers bend the rules? Deterring white collar crimes Strategic leadership of ethical behaviour

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Why Manager Bend the Rules?

Performance Based Judgment Calls
Performance contingencies demand otherwise 90% Necessary to get the job done 86% Unfair/overly restrictive standard 72% To avoid negatively affecting the organization 70%
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Bending continues
Faulty Rules
The rules are out of date 75% Emergency situation supersede some rules 95% The rules are wrong 75%

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Bending concludes
Socially Embedded Norms
Every one else does it 19% Pressure from others 23% No one expects strict adherence to the rules 27%

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White Collar Crime

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 Over 43% white collar guys arrested are never prosecuted The last decade has seen an average annual conviction of over 78% defendants. And the trend is upward! Economic losses ratio between common crime and white collar crime stands at 1:17(2001) 1:32(2010)
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The Strategic Leadership of Ethical Behaviour

Customer Defections Loss of Reputation Lost Employee Morale Employee Turnover

Government Fines and Penalties

Less Damaging

Legal and Investigative Corrective Actions

More Damaging

Level 1 Costs

Level 2 Costs

Level 3 Costs

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Conclusion
Corporate Bangladesh in its infancy Regulatory competence light years away Opportunity to be smart learners by learning from others mistakes!

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