高级管理会计学课件：Lesson 2 Corporate governance and ethical issues

1、1Corporate governance and ethical issues Lesson 22Introduction of lesson 2This lesson provides a broad overview of corporate governance, ethics, and social responsibility.Corporate governance: is the system by which organizations are directed and controlled by senior officers.Ethics: Ethics is a set

2、 of moral principles to guide behaviour. Social Responsibility: are actions which the organization is not obliged to take, taken for the well-being of stakeholders and the public.Ethics, law, governance and social responsibilitylawCorporate governanceSocial responsibilityethicsHighly regulated; comp

3、anies must follow;Minimum level of behaviourLess regulated; listed companies must follow; others encouraged to followNo regulation; companies have a free choice; pressured to followNo regulation; companies have a free choice; expected to follow by society 4Lesson 2 Topics outlineEthics of management

4、 accounting (2.1,2.8)Unethical corporate behaviour (2.5)Moral management (2.7)Corporate social responsibility (2.2, 2.3)Agency theory ( 2.4 )Corporate governance and controls (2.6)Case analysis: Vector Aeromotive Corporation (2.9)5Topic 1: Ethics of management accountingLearning ObjectiveExplain the

5、 main ethical responsibilities of a management accountant . (Level 1)Describe whistle-blowing (Level 2)Required reading Ethics readings handbook , Unit C5: “Ethics of managerial and financial accounting” Ethics readings handbook, Unit B6: “Find an acceptable solution or blow the whistle?”Ethics Ethi

6、cs: Ethics is a set of moral principles to guide behavior. Ethics involves notions ofRight and wrongFair and unfairMoral and immoralBusiness ethics: principles and standards that determine acceptable conduct in business7Ethical modelsTextbook Page 658The utilitarian view道德的功利观The rights view道德的权利观Th

7、e justice view道德公正观The virtues view 道德美德观1. Utilitarian View伦理的功利观.Ethical decisions are made solely on the basis of their outcomes or consequences such that the greatest good is provided for the greatest number为最大多数人提供最大的利益Comparing benefits and costsAction is ethical if net benefits exceed net cos

8、tsEncourages efficiency and productivity and is consistent with the goal of profit maximizationBut difficult to measure some human and social costs. Majority may disregard rights of minority伦理的功利观完全依据决策的后果作出选择有利于利润最大化牺牲少数人利益原则目标结果为尽可能多的人提供尽可能多的利益2. Rights View伦理的权利观Concerned with respecting and prot

9、ecting individual liberties and privacy 尊重和保护个人自由和权Basic Human rights are respectedDifficult to balance conflicting rightsAll people have basic rights which include individual :rights of privacy (隐私权权利), rights of conscience (思想自由权利), rights of free speech (言论自由权利), rights of life and safety (生命与安全权

10、利), and rights of due process (法律规定权利).伦理的权利观体现组织对个人利益的尊重尊重和保护个人的基本权利保护个人自由和隐私强调个人权益、忽视组织的整体利益。原则目标结果3. Justice view 伦理的公平观Organizational rules are enforced fairly and impartially and follow all legal rules and regulations经理者公平和公正地贯彻和加强规则Protects the interests of under-represented stakeholders and t

11、he rights of employee.Distributing fair sharesBenefits and costs are fairly distributedDifficult to measure benefits and costs. Lack of agreement on fair shares伦理的公平观要求管理者公平地实施规则按公平原则行事保护了未被充分代表的利益相关者容易忽略行为对组织整体利益影响原则目标结果4. Virtues view 伦理美德观Managers should attempt to cultivate and incorporate such

12、virtues as firmness, fairness, objectivity, forethought, loyalty and so on in daily decision-making.经理应该在日常决策中培养并结合坚定、公平、客观、前瞻和忠诚的美德。 Virtues provide their own intrinsic rewards. Publicized sets of virtues can provide guidance as to what is the right thing to do.伦理的美德观强调管理者应具有美德按美德原则行事有助于培养有道德的人某些美德

13、会阻碍道德行为原则目标结果Harvard University public class “Justice”01 The Moral Side of Murder 假设你是一个电车司机,你的电车在轨道上以每小时60英里的速度飞驰前行,在轨道的尽头,你发现五个工人在轨道上工作。你尝试刹车，但力不从心,刹车失灵了。你感到绝望，因为你知道:如果你冲向这五个工人，他们必死无疑。假设你清楚地知道这一点。所以你感到很无助，直到你看到,在轨道的右侧上,有一条侧轨，并在该轨道的尽头，只有一个工人在那条轨道上工作。你的方向盘还能用，所以你可以把车转向，如果你愿意，转到岔道,撞死这名工人，但挽救了那边五个人。多少

14、人会把电车转到旁边的轨道？多少人不会？多少人会一直往前开？ 02 Putting a price tag on life 19世纪的一个著名案例，此案涉及到的人是4个失事轮船的船员。达德利是队长，史蒂文斯是大副，布鲁克斯是一个水手，第四个船员是船舱里的男孩理查德帕克，十七岁。他是一个孤儿，他没有家庭，这是他第一次在海上远航。他们在海上迷失了19天之后，船长决定杀死机舱男孩，他是4个人中最弱小的，因为他不顾别人的劝告喝了海水。他生病了，他看上去似乎是要死了。因此，在第十九天，达德利船长，建议他们应该抽一个签，他们应该抽签，谁抽到就会被杀，以拯救剩下的人。布鲁克斯拒绝了。他不喜欢抽签的想法。过了一

15、天，仍然没有看到救援船。达德利做了一个祈祷，他告诉孩子他的时间已经到来，他用他的笔刀杀死了男孩，刺在他的颈静脉。4天里，他们3人以男孩的尸体和血液为食。然后他们获救了。假设有抽签，船舱男孩输了，然后接下来的故事照样展开了，那么有多少人会说它在道德上是受允许的？Business Ethics & Social ResponsibilityA Timeline of Ethical and Socially Responsible Concerns 2-18why business ethics is important?Important to the organizationGood ethi

16、cs should be seen as a driver of profitability rather than a burden on businessAn ethical framework is part of good corporate governanceInvestors are reassured about the companys approach to risk managementEmployees will be motivated in an good ethical environmentImportant to individualConsumers and

17、 employeesCGA code of ethical principles and rules of conducts (CEPROC)1. Responsibilities to society2. Trust and duties3. Due care and professional judgment4. Avoidance of deceptive information5. Open and fair practice of the profession6. Responsibility to the profession21IMA Guidelines for Ethical

18、 BehaviorThe four standards of ethical conduct for management accountants as advanced by the Institute of Management Accountants:CompetenceConfidentialityIntegrityCredibilityCompetenceFollow applicable laws, regulations and standards. Recognize and communicate professional limitations or other const

19、raints.Maintain professional competence by continually developing knowledge and skills Provide accurate, clear, concise and timely information and recommendation to support decision IMA Guidelines for Ethical BehaviorConfidentialityDo not disclose confidential information unless legally obligated to

20、 do so. Ensure that subordinates do not disclose confidential information. Do not use confidential information for personal advantage. IMA Guidelines for Ethical BehaviorIntegrityAvoid activities that could affect your ability to perform duties.Refrain from activities that could discredit the profes

21、sion.Refuse gifts or favors that might influence behavior.IMA Guidelines for Ethical BehaviorCredibilityDisclose all information that might be useful to management. Communicate unfavorable as well as favorable information.Communicate information fairly and objectively.IMA Guidelines for Ethical Beha

22、viorEthical dilemmasEthical dilemmas: are situations in which none of the available alternatives seems ethically acceptable.They exist because real world decisions are complex, difficult to frame, and involve various consequences that are difficult to quantify AnalysisCase A: Involves competence, cr

23、edibility and integrity. Its a “right VS. wrong” decision. The management accountant should request that the division manager provide credible evidence that the new product is commercially viable. Otherwise, expensing development costs is appropriate. Case B: Involves confidentially and integrity. I

24、ts a “right VS. right” decision, which is not always clear-cut. The supplier in case B may have no intention of raising issues associated with the bid. The accountant in case B should discuss the invitation with his or her immediate supervisior. Follow established policies.For unresolved ethical con

25、flicts: Discuss the issue with your immediate supervisor except when it appears that the supervisor is involvedClarify issues in a confidential discussion with an objective advisor.Consult an attorney as to legal obligations.The last resort is to resign Depending on the nature of the ethical conflic

26、t, it may also be appropriate to notify other parties.IMA Guidelines for Resolutionof an Ethical ConflictCodes of Business EthicsSOX requirementsWhether companies have codes of ethicsGeneralSeparate code for senior managementWaivers on the code of ethics for senior managementAny changes to the code

27、of ethicsIf no code, must explain whyWhistle-blowers一封匿名信吹口哨者：美国世界通讯的辛西亚库珀、美国联邦调查局的科琳罗利及安然事件的莎朗沃特金斯 被美国时代周刊评选为2002年度风云人物。莎朗沃特金斯：安然发展部副总裁，2001年8月写了一封匿名信给安然董事长，提出其担忧世界会察觉到安然“过去的成绩只不过是精心制作的会计骗局”，并将内容告知安达信。安达信在得知匿名信内容后，要求安然更改以前违反会计准则的做法，并披露出来。2001年10月16日，宣布第三季度亏损.18美元，包括.44亿SPE的损失，2001年12月2日，安然申请破产。Whis

28、tle-blowersWhistle-blowers: it refers to an individual, either internal or external to an organization, who reports misconduct in an organization. Specifically, “ the disclosure of illegal, immoral or illegitimate practices.”. That is, Employees who report suspected violations Is whistle-blowing eth

29、ical? When should you blow the whistle? Is whistle-blowing ethical?Objector: “ The practitioner should possess a spirit of loyalty to fellow practitioners, and should not allow any unprofessional acts to bring shame upon the entire profession.” Whistle blowing is viewed as an act of disloyalty and t

30、here is presumption against it .Supporter: There is an ethical obligation for human beings to prevent harm in certain circumstances. Especially not blowing the whistle may mean serious harm to innocent third parties. If the only way to prevent harm in those circumstances is to blow the whistle, then

31、 not only is whistle blowing not wrong, it is an obligation.When should you blow the whistle?1. Check your facts and be sure you are making a balanced judgment2. Document what you are doing.3. Where possible, use internal procedures to call the issue to the attention of senior management.4. Consider

32、 whether resignation is more appropriate than going public.5. If serious harms to the public interest ( health, safety, or serious fraud) are imminent, or all internal processes have been exhausted, go to external authorities or the media. Whistle blowingProtection provision (SOX)Prohibits discharge

33、, demotion, discrimination, threatens or other harmful action to employeeEmployee can file a compliant with Secretary of Labor (delegated to OSHA)Remedies for employee include reinstatement, back pay, litigation costs and attorney fees36Topic 2: Unethical corporate behaviourLearning ObjectiveDescrib

34、e an approach to analyzing and taking action on ethical matters in an organization. (Level 2)Required reading Textbook: Chapter 15, pages 656-668 Ethics reading handbook, unit B5 Ethical Guidelines for Managers Obey the law. Tell the truth. Show respect for people. Stick to the Golden Rule. Above al

35、l, do no harm. Practice participation, not paternalism. Always act when you have responsibility.Criteria to be used:Is it legal?Is it contrary to companys code of ethics?Is it contrary to any other published official code of ethics?Would you mind other people knowing?Who is affected by the decision?

36、 Would they regard it fair?Ethical CriteriaCommon rationalizations of unethical behavior1. The behaviour, though suspect, is rationalized as not being illegal .2. The behaviour is unethical, but it is in the individuals or the companys best interests.3. The behaviour, though unethical, will not be d

37、iscovered4. The unethical behaviour helps the company, and the company will protect employees who make it possible.Unethical corporate behaviour( P662）1. Budge slack: Budgets are often the result of negotiation between multiple individuals2. Vagueness of assessments and reports3. Managing earnings:

38、The choice of accounting methods and timing of recording various transactions can be used for benefit.4. Improper controls: Controls that are “too good” or inaccurate Budget slack the budgets are negotiated between the budgeters and their high-ups .In order to be given more easily achievable targets

39、 to earn performance-contingent rewards, budgeters use the opportunity to distort their positions. This distortion is often referred to as “ creating slack”. Is budget slack ethical?Budgetary slackOn the one hand, employees who create slack Exploit superior knowledge about business possibilitiesIncr

40、ease the probability that they meet the budget and earn performance-dependent rewards (which is costly to the shareholders or owners)Distort resource allocation and performance evaluation decisions that rely on the budget submissionsOn the other hand, these employeesProtect themselves from the downs

41、ide potential of an uncertain futureProtect themselves from evaluation unfairness caused by imperfect performance measuresJust do “what everybody else does” and is aware of ?It depends onHow good the performance measures are.How rigid budget targets are.What the employees intentions are (self-intere

42、st).Whether superiors are aware of the slack.Whether the superiors encourage slack creationWhether the amount of slack is “material”Whether the individual is bound by one or more explicit codes of professional conductEarnings managementEarnings managementActions taken to make performance look better

43、 in the short-run than it otherwise would; plus, (smooth earnings)Those engaging in them know the actions have no real economic benefits and may actually be quite costly in the long-run. (overstate earnings)Earnings management comes in many formsChoices of accounting policiesAccounting judgments (e.

44、g., reserves)Timing of sales, expenses, etc.Earnings management On the one hand, influencing reported earnings .Violates the duty to disclose fairly presented informationIs inconsistent with integrity obligations to be honest, fair,and truthfulIs not apparent to external or internal users of financi

45、al statements, so that personal advantages could be derivedOn the other hand, “managed earnings” may .Smooth out meaningless, short-term perturbations in theearnings measures to provide more, rather than less,informative performance signals to financial statement usersProtect employees from rigid, u

46、nfair performance evaluationsAvoid taking other, more damaging actions (e.g., layoffs)It depends onThe direction of the manipulation (boost, shrink or merely smooth earnings )The size (materiality) of the manipulationThe timing (e.g., related to a bond or share offering)The method used (e.g., defer

47、discretionary spending, change accounting policy)The employees intentThe clarity of the rules prohibiting the actionThe degree of repetition (one-off vs. on-going)Flawed control indictorsWhen results targets and action prescriptions are not defined properly, they can actually motivate behaviors that

48、 employees know are not in the organizations best interests.myopia: it occurs when companies place a high emphasis on the achievement of short-term profit targets, which may diminish shareholder value in the long run.Following the flawed result targets and action prescriptions might not be ethicaldu

49、e care and loyalty.Controls that are “too good”Computer surveillance programs, cameras, personal location devices, etc.On the one hand, .Congruent, accurate, and timely controlsOn the other hand, Employees right to autonomy from controls that are “oppressive”Electronic sweatshopsHas the use of these

50、 controls been disclosed?Are employees involved in establishing the system (making it fair)?Are these controls used for monitoring employees in training, or do they also monitor experienced employees?It depends on?50Topic 3: Moral management Learning ObjectiveDescribe moral management and the role i

51、t plays in controlling operations (Level 2)Required readingEthics readings handbook, Unit B1Moral ManagementMorals : the terms “morals” and “ethics” are used interchangeably. Ethics is also known as moral philosophy and is defined as the systematic study of standards of human conduct and moral judgm

52、ent.Moral management: is an approach that provides a framework for an organizations business decision systems to incorporate an internal moral code more than a profit motive. Which requires morally motivated actions.Cost and benefitsMoral management costs: costs can come in the form of production or

53、 delivery charges that result from choices made on the basis of moral or ethical preference rather than efficiency.Moral management benefits: New consumers; pricing strategies; public perception; public influence; access to capital; Employee recruitment and retentionGoals of moral management Good wo

54、rk Build community Meaningful work Care for society欧美公司管理道德的情况Fortune 500强，90%的公司有成文的道德守则；60%以上的美国大企业和50%的欧洲大企业设有企业伦理机构；美国制造业和服务业前1000家企业中，20%聘有伦理主管；90年代中期，40%左右的美国企业进行了伦理培训。Critics of moral management1. It distracts form the essential focus of organizationsto create stockholder wealth2. The cost of

55、 making choices consistent with a moral management strategy may be difficult to evaluate.3. The decision system embedded in a moral management approach is often divorced from context, which may encourage that are inconsistent with the best choices for the organization.56Topic4: Corporate social resp

56、onsibilityLearning ObjectiveCompare and contrast the different views of corporate social responsibility (Level 1)Describe activities that are part of responsible interaction with stakeholders (Level 2)Required readingEthics readings handbook, Unit B2Strategy and Corporate Social ResponsibilityCompan

57、ies should balance strategic actions to benefit shareholders against the duty to be a good corporate citizenShould consider the effect that company actions will have on:EmployeesLocal communitiesThe environmentSociety at largeCompanies must demonstrate a social consciousnessTo Whom is management res

58、ponsible?Milton FriedmanThe only group that has a moral claim on the corporation is the people who own shares of the stock (that is, the shareholders).primary responsibility of the corporate manager is to work on behalf of the owners of the corporation.Profit maximizationR. Edward FreemanMany groups

59、 have a moral claim on the corporation because the corporation has the potential to harm or benefit them (call these groups stakeholders).companies and their managers have responsibilities to stakeholders other than shareholders. To Whom is Management Responsible?管理对谁有责任股东与管理部门其他受影响的组织整个社会Source: Ro

60、bbins & Coulter, Management, 8/eSocially responsible firms can be profitable while voluntarily engaging in activities beneficial to society.Who are these stakeholders?stakeholders are “groups and individuals who benefit from or are harmed by, and whose rights are violated or respected by ,corporate