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Module 6 - ETHC 1023

The document outlines the course learning module for ETHC 1023, focusing on governance, business ethics, risk management, and internal control for the academic year 2024-2025. Key topics include enhancing auditor independence, promoting sustainability reporting, and encouraging employee participation in corporate governance. Recommendations emphasize establishing anti-corruption policies, whistleblowing frameworks, and fostering a socially responsible business environment.

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Christian Saludares
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22 views4 pages

Module 6 - ETHC 1023

The document outlines the course learning module for ETHC 1023, focusing on governance, business ethics, risk management, and internal control for the academic year 2024-2025. Key topics include enhancing auditor independence, promoting sustainability reporting, and encouraging employee participation in corporate governance. Recommendations emphasize establishing anti-corruption policies, whistleblowing frameworks, and fostering a socially responsible business environment.

Uploaded by

Christian Saludares
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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UNIVERSITY OF SAINT LOUIS TUGUEGARAO

School of Accountancy, Business and Hospitality


Accountancy Department
Curriculum 2018-2019

COURSE LEARNING MODULE


ETHC 1023-Governance, Business Ethics, Risk Management and Internal
Control
Second Semester
AY 2024-2025

Lesson 6: SEC Code of Corporate Governance for Publicly Listed Companies

Topic:  Strengthening the External Auditor’s Independence and Improving Audit


Quality
 Increasing Focus on Non-Financial and Sustainability Reporting
 Promoting A Comprehensive and Cost-Efficient Access to Relevant
Information
 Internal Control System and Risk Management Framework
 Cultivating a Synergic Relationship with Shareholders
 Duties to Stakeholders

Learning After reading this module, you are expected to:


Outcomes: • To know what constitutes a competent board and how can it be established.
• To understand the composition, functions and responsibilities of the board
of committees
• To know how the directors can show full commitment to the company
• To understand how independence and objectivity of the board can be
reinforced and enhanced.

LEARNING CONTENT:

15. ENCOURAGING EMPLOYEES’ PARTICIPATION

Principle

A mechanism for employee participation should be developed to create a symbiotic


environment, realize the company’s goals and participate in its corporate governance
processes.

Recommendation 15.1

ETHC 1023 - Governance, Business Ethics, Risk Management and Internal Control | 1
The Board should establish policies, programs and procedures that encourage employees
to actively participate in the realization of the company’s goals and in its governance.

Explanation

The establishment of policies and programs covering, among others, the following: (1) health,
safety and welfare; (2) training and development; and (3) reward/compensation for
employees, encourages employees to perform better and motivates them to take a more
dynamic role in the corporation.

Active participation is further fostered when the company recognizes the firm-specific skills
of its employees and their potential contribution in corporate governance. The employees’
viewpoint in certain key decisions may also be considered in governance processes through
work councils or employee representation in the board.

Recommendation 15.2

The Board should set the tone and make a stand against corrupt practices by adopting an
anticorruption policy and program in its Code of Conduct. Further, the Board should
disseminate the policy and program to employees across the organization through trainings
to embed them in the company’s culture.

Explanation

The adoption of an anti-corruption policy and program endeavors to mitigate corrupt practices
such as, but not limited to, bribery, fraud, extortion, collusion, conflict of interest and money
laundering. This encourages employees to report corrupt practices and outlines procedures
on how to combat, resist and stop these corrupt practices. Anticorruption programs are more
effective when the Board sets the tone and leads the company in their execution.

Recommendation 15.3

The Board should establish a suitable framework for whistleblowing that allows employees
to freely communicate their concerns about illegal or unethical practices, without fear of
retaliation and to have direct access to an independent member of the Board or a unit created
to handle whistleblowing concerns. The Board should be conscientious in establishing the
framework, as well as in supervising and ensuring its enforcement.

Explanation

A suitable whistleblowing framework sets up the procedures and safe-harbors for complaints
of employees, either personally or through their representative bodies, concerning illegal and
unethical behavior. One essential aspect of the framework is the inclusion of safeguards to
secure the confidentiality of the informer and to ensure protection from retaliation. Further,
part of the framework is granting individuals or representative bodies confidential direct
access to either an independent director or a unit designed to deal with whistleblowing
ETHC 1023 - Governance, Business Ethics, Risk Management and Internal Control | 2
concerns. Companies may opt to establish an ombudsman to deal with complaints and/or
established confidential phone and e-mail facilities to receive allegations.

16. ENCOURAGING SUSTAINABILITY AND SOCIAL RESPONSIBILITY

Principle

The company should be socially responsible in all its dealings with the communities where it
operates. It should ensure that its interactions serve its environment and stakeholders in a
positive and progressive manner that is fully supportive of its comprehensive and balanced
development.

Recommendation 16.1

The company should recognize and place an importance on the interdependence between
business and society, and promote a mutually beneficial relationship that allows the company
to grow its business, while contributing to the advancement of the society where it operates.

Explanation

The company’s value chain consists of inputs to the production process, the production
process itself and the resulting output. Sustainable development means that the company
not only complies with existing regulations, but also voluntarily employs value chain
processes that takes into consideration economic, environmental, social and governance
issues and concerns. In considering sustainability concerns, the company plays an
indispensable role alongside the government and civil society in contributing solutions to
complex global challenges like poverty, inequality, unemployment and climate change.

----END OF LESSON---

REFERENCES

Textbook:

Cabrera, M.E.B. (2021). Corporate Governance, Business Ethics, Risk Management and Internal
Control. GIC Enterprises & Co., Inc.

WARNING: No part of this E-module/LMS Content can be reproduced, or transported or


shared to others without permission from the University. Unauthorized use of the materials,
other than personal learning use, will be penalized. Please be guided accordingly.

ETHC 1023 - Governance, Business Ethics, Risk Management and Internal Control | 3
ETHC 1023 - Governance, Business Ethics, Risk Management and Internal Control | 4

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