Module E: Organizational Ethics and Code of

99th JAIBB Professional Exam Conduct

IBB Banking Professional Academy

 IBB Banking Professional Academy
*** What do you understand by Organizational Ethics?

Organizational ethics refers to the principles, values, and norms that guide the behavior, decisions, and actions of
individuals and groups within an organization. It involves the moral standards and beliefs that shape how an
organization conducts its operations, interacts with stakeholders, and fulfills its responsibilities to society.
Organizational ethics encompasses various aspects, including:

✓ Ethical Leadership: Leadership plays a crucial role in setting the tone for
ethical behavior within an organization. Ethical leaders promote honesty,
integrity, transparency, and accountability among employees.
✓ Corporate Governance: Organizational ethics is closely linked to corporate
governance, which involves the structures, processes, and systems through
which companies are directed and controlled. Good corporate governance
practices help ensure that ethical standards are upheld at all levels of the
organization.
✓ Compliance and Legal Responsibilities: Organizations must comply with
applicable laws, regulations, and industry standards. Ethical organizations go beyond mere compliance and
strive to uphold higher ethical standards in their operations.
✓ Stakeholder Relationships: Ethical organizations recognize the importance of building and maintaining
trust with various stakeholders, including employees, customers, suppliers, investors, and the broader
community. They prioritize fairness, respect, and transparency in their interactions with stakeholders.
✓ Corporate Social Responsibility (CSR): Organizational ethics often involve a commitment to CSR, which
entails integrating social, environmental, and ethical concerns into business operations and decision-making
processes. Ethical organizations aim to create positive impacts on society while minimizing negative
externalities.
✓ Ethical Decision Making: Employees and leaders face ethical dilemmas in their day-to-day activities.
Organizational ethics provide guidance on how to navigate these dilemmas by promoting critical thinking,
moral reasoning, and consideration of the broader consequences of actions.
✓ Ethical Culture: Building an ethical culture is essential for fostering a work environment where ethical
behavior is valued, rewarded, and ingrained in the organizational fabric. This involves promoting open
communication, providing ethics training, and addressing unethical conduct promptly and appropriately.

Overall, organizational ethics is integral to the long-term success, reputation, and sustainability of a company. By
prioritizing ethical principles and practices, organizations can enhance trust, mitigate risks, and contribute positively
to society.

*** Explain the Important Characteristics of Organizational Ethics.

Organizational ethics refers to the principles, values, and standards of conduct that
guide the behavior of individuals and groups within an organization. These ethics
shape the culture, decision-making processes, and relationships within the
organization. Several important characteristics define organizational ethics:

1. Integrity: Integrity is fundamental to organizational ethics. It involves

honesty, trustworthiness, and adherence to moral and ethical principles.
Organizations with a strong commitment to integrity prioritize doing
what is right, even when faced with challenges or temptations to
compromise.
2. Transparency: Transparency involves openness and clarity in
communication and decision-making processes. Ethical organizations
promote transparency by providing clear information about their actions, policies, and practices to
stakeholders, including employees, customers, investors, and the public.
3. Accountability: Accountability holds individuals and organizations responsible for their actions and
decisions. Ethical organizations establish mechanisms for accountability, such as codes of conduct,
performance evaluations, and disciplinary procedures, to ensure that employees are held accountable for their
behavior.

Page 1 of 4 Sazzad Hasan Sumon Ahamed

AIBB, CECM, MBA (Major in Finance) DAIBB, CECM, MBA (Finance, DU)
 IBB Banking Professional Academy
4. Fairness: Fairness refers to treating all individuals with impartiality and equity, regardless of factors such as
race, gender, religion, or socioeconomic status. Ethical organizations strive to create a culture of fairness by
implementing policies and practices that promote equal opportunities and prevent discrimination and bias.
5. Respect: Respect involves recognizing the inherent worth and dignity of all individuals. Ethical organizations
foster a culture of respect by promoting tolerance, diversity, and inclusivity in the workplace. They value the
perspectives, opinions, and contributions of all stakeholders and seek to create a supportive and respectful
environment for everyone.
6. Compliance: Compliance with laws, regulations, and ethical standards is essential for organizational ethics.
Ethical organizations ensure that their actions and decisions comply with legal requirements and industry
regulations. They also adhere to ethical principles and standards of conduct, even when there is no explicit
legal obligation to do so.
7. Social Responsibility: Social responsibility involves considering the impact of organizational decisions and
actions on society and the environment. Ethical organizations prioritize social responsibility by engaging in
sustainable practices, supporting community initiatives, and addressing societal issues such as poverty,
inequality, and environmental degradation.
8. Ethical Leadership: Ethical leadership sets the tone for organizational ethics. Leaders play a crucial role in
establishing and promoting a culture of ethics within the organization. Ethical leaders lead by example,
demonstrating integrity, transparency, accountability, and fairness in their actions and decisions.

Overall, organizational ethics encompass a set of values and principles that guide behavior and decision-making within
an organization. By upholding these characteristics, organizations can build trust, foster positive relationships, and
achieve long-term success while contributing to the well-being of society.

*** Explain the concept of ethical leadership.

Ethical leadership is a leadership approach that emphasizes the importance of ethical

principles, values, and behaviors in guiding decision-making and actions. It involves
leaders adhering to moral and ethical standards while also inspiring and motivating
others to do the same. Ethical leaders prioritize integrity, honesty, fairness, and
responsibility in their interactions and decision-making processes. Key aspects of
ethical leadership include:

Integrity: Ethical leaders act with honesty and transparency, consistently

aligning their actions with their stated values and principles. They do not compromise their integrity for
personal gain or short-term benefits.
Respect: Ethical leaders treat all individuals with dignity and respect, regardless of their position or
background. They foster an inclusive and supportive environment where everyone feels valued and heard.
Fairness: Ethical leaders strive to be fair and just in their decisions and actions, considering the needs and
perspectives of all stakeholders involved. They avoid favoritism, discrimination, and bias.
Accountability: Ethical leaders take responsibility for their decisions and actions, accepting the
consequences, whether positive or negative. They hold themselves and others accountable for upholding
ethical standards and meeting expectations.
Empathy: Ethical leaders demonstrate empathy and compassion towards others, understanding their
perspectives, concerns, and emotions. They actively listen and seek to understand different points of view
before making decisions.
Courage: Ethical leaders have the courage to stand up for what is right, even in the face of adversity or
pressure to do otherwise. They are willing to take risks and challenge unethical behavior or practices.
Ethical Decision-Making: Ethical leaders employ a systematic approach to decision-making that considers
ethical implications and consequences. They weigh the potential impact of their decisions on stakeholders
and strive to choose the option that aligns with ethical principles.
Role Modeling: Ethical leaders lead by example, serving as role models for ethical behavior and integrity.
They demonstrate consistency between their words and actions, inspiring trust and confidence in their
leadership.
Overall, ethical leadership is essential for fostering trust, integrity, and ethical conduct within organizations and
communities. It helps to create a positive organizational culture where individuals feel empowered to act ethically and
contribute to the common good.

Page 2 of 4 Sazzad Hasan Sumon Ahamed

AIBB, CECM, MBA (Major in Finance) DAIBB, CECM, MBA (Finance, DU)
 IBB Banking Professional Academy
*** Explain the concept of Organizational Code of Conduct.

An Organizational Code of Conduct is a set of guidelines and principles

that outlines the expected behaviors and ethical standards for employees
within an organization. It serves as a framework for decision-making and
behavior, helping to create a positive and productive work environment
while also ensuring legal compliance and protecting the organization's
reputation. Key components of an Organizational Code of Conduct
typically include:

Ethical Standards: Clear statements of the organization's

values and principles that guide ethical decision-making. This
may include honesty, integrity, respect, fairness, and
accountability.
Compliance with Laws and Regulations: Ensuring that all employees understand and comply with relevant
laws, regulations, and industry standards that govern the organization's operations.
Conflicts of Interest: Guidance on identifying and managing conflicts of interest, such as situations where
personal interests may conflict with the interests of the organization.
Confidentiality: Expectations regarding the protection of sensitive information and data belonging to the
organization, its employees, customers, and other stakeholders.
Anti-Discrimination and Harassment Policies: Prohibitions against discrimination, harassment, and
retaliation based on factors such as race, gender, religion, age, sexual orientation, disability, or any other
protected characteristic.
Workplace Health and Safety: Commitment to providing a safe and healthy work environment, including
policies and procedures for reporting accidents, hazards, and unsafe conditions.
Use of Company Resources: Guidelines for the appropriate use of company resources, including
technology, equipment, facilities, and time, to prevent misuse and abuse.
Reporting Violations: Procedures for reporting violations of the Code of Conduct, including avenues for
anonymous reporting and protection against retaliation for whistleblowers.
Consequences for Violations: Clear consequences for employees who violate the Code of Conduct, which
may include disciplinary action, up to and including termination of employment.
Regular Training and Communication: Ongoing training and communication initiatives to ensure that all
employees understand the Code of Conduct and their responsibilities under it.
By establishing and upholding a strong Organizational Code of Conduct, organizations can foster a culture of integrity,
trust, and accountability, which ultimately contributes to their long-term success and sustainability.

*** Perceive Code of Conduct in the context of the banking industry.

In the banking industry, a Code of Conduct outlines the ethical standards and
principles that employees, managers, and other stakeholders are expected to adhere
to in their interactions and dealings within the organization and with clients or
customers. Here's how a Code of Conduct might be perceived within the banking
industry:

Ethical Standards: The Code of Conduct sets forth the ethical standards
expected of all employees, emphasizing honesty, integrity, and
transparency in their dealings. This is particularly crucial in the banking
sector, where trust and credibility are paramount.
Customer Protection: The Code of Conduct often includes provisions aimed at protecting customers'
interests, ensuring fair treatment, and preventing any form of exploitation or abuse. This might involve
guidelines on responsible lending practices, confidentiality, and handling of sensitive customer information.
Compliance and Regulation: Given the highly regulated nature of the banking industry, the Code of
Conduct typically incorporates compliance with legal and regulatory requirements. This includes adherence
to anti-money laundering (AML) laws, know your customer (KYC) regulations, and other financial
regulations aimed at preventing fraud, corruption, and illicit activities.

Page 3 of 4 Sazzad Hasan Sumon Ahamed

AIBB, CECM, MBA (Major in Finance) DAIBB, CECM, MBA (Finance, DU)
 IBB Banking Professional Academy
Conflict of Interest: The Code of Conduct addresses potential conflicts of interest that may arise in the
course of banking activities, such as personal financial interests conflicting with the interests of clients or the
institution. It may outline procedures for disclosing and managing such conflicts to ensure fair treatment and
unbiased decision-making.
Professionalism: Banking professionals are expected to conduct themselves with professionalism and
respect for colleagues, clients, and stakeholders. The Code of Conduct may include guidelines on appropriate
behavior in the workplace, adherence to company policies, and maintaining confidentiality.
Risk Management: The banking sector deals with various financial risks, and the Code of Conduct may
emphasize the importance of responsible risk management practices. This includes ensuring that employees
understand and mitigate risks appropriately to safeguard the interests of clients and the institution.
Consequences of Non-Compliance: The Code of Conduct typically outlines the consequences of non-
compliance, which may include disciplinary action, termination of employment, legal repercussions, and
damage to the reputation of the institution.

Overall, the Code of Conduct in the banking industry serves as a framework for promoting ethical behavior, ensuring
regulatory compliance, and maintaining trust and integrity in financial dealings. It plays a critical role in upholding
the reputation and credibility of banks and financial institutions in the eyes of customers, regulators, and the wider
community.

Page 4 of 4 Sazzad Hasan Sumon Ahamed

AIBB, CECM, MBA (Major in Finance) DAIBB, CECM, MBA (Finance, DU)