Glaxo Smithkline (GSK) recognises that commercial pressures and complex regulatory environments can present employees with difficult ethical situations. GSK provides guidance and support for them backed by rigorous audit

CS Professional · Ethics, Governance and Sustainability · PYQS · December 2020
Glaxo Smithkline (GSK) recognises that commercial pressures and complex regulatory environments can present employees with difficult ethical situations. GSK provides guidance and support for them backed by rigorous auditing and action if misconduct is identified. The company's code of conduct promotes honest and ethical conduct by setting out the standards to be followed by GSK's employees in their everyday work for the company. The code is communicated both within and outside the company. A separate publication, "The Employee guide to Business conduct", helps employees to understand the meaning of code in practice and its acceptable and unacceptable behavior. Managers are required to set an example and ensure that all their staff receives guidance, training and supervision on ethical behaviour and legal compliance relevant to their jobs. Senior managers formally certify their adherence to the code and other GSK policies and standards. GSK has audit systems to help identify and deal with cases of non-compliance. Those who violate company standards are subject to disciplinary action including dismissal in serious cases. Serious violations and remedial actions are reported to the audit committee of the board. Doing the right thing can, at times appear to sacrifice some immediate advantage. However, GSK's commitment to integrity and high standards of business ethics benefit their customers, communities, shareholders, employees and the business. In the light of above, answer the following questions: What role can be played by the Board of Directors in corporate governance to bring ethical behaviour among employees?

Answer & Explanation:

The Board of Directors ultimately has legal responsibilities for the organization resources and decisions. As such to bring ethical behaviour among employees the board of directors can: Direct all the directors to actively participate in the meetings of the Board or the committees thereof. Require all the directors to undertake to inform the chairman of the board of any changes in their board positions, relationship with other business and other events/circumstances that might impact their ability to perform Board/Board committees duties or affect the independence of the board as per the listing requirements. Require all the directors to undertake that they will avoid conflict of interest in matter brought up to before the board such as: Related party transactions. Directorship in the competing entities. Restrict providing consulting/business/employment in any manner with suppliers/service providers or customer of the company by the directors of the company. Do not allow use of official positions by the directors for personal gains. Positive culture: Employees' morale improves when they work behind an ethical leader. Staff won't feel as if they are helping a corrupt person earn even more money. Ethical leaders have the capacity to inspire those working with them to perform at their peak. Improved brand image: The leaders of the company should show the best that your brand has to offer. Scandal prevention: Ethical leaders don't create bad PR for a company. Company scandals can be damaging to an organization's image and cause customers to turn to a competitor. Loyalty: Both employees and customers are more likely to remain loyal to companies that hire ethical leaders. Improved emotional well-being: Workplace stress can hurt productivity levels at a company. If leadership is toxic, then efficiency will decrease.

Topics: Ethics and Governance

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