BUSFIN 3500 Final | Questions and Answers Law and Ethics Are Interconnected: perceived unethical business behavior often spurs public outcry for increased regulation of business. Ethics Principles 1) Maintain Fiduciary Standards 2)Avoid appearance of a Conflict of Interest 3) Respect Confidentia...
Law and Ethics
Are Interconnected: perceived unethical business behavior often spurs public outcry for
increased regulation of business.
Ethics Principles
1) Maintain Fiduciary Standards
2)Avoid appearance of a Conflict of Interest
3) Respect Confidential Relations
4) Exercise Due Care and Due Diligence
5) Act in Good Faith and Deal Fairly with Others
Fiduciary
Someone who occupies a position of power, trust and confidence regarding property of
another
Fiduciary Rule
Requires fiduciary to act solely in the interest of that other person's property and
interests
Conflict of Interest
Exists when your personal interest or duty conflicts with a professional interest or duty.
Creates impression that person in conflicted situation cannot be fair and impartial
Must:
1)Disqualify themselves from the opportunity presented
2)Disclose information and receive consent by communication situation before
continuing
Respect Confidential Relations
Certain relations and conditions give rise to a legal duty to maintain confidentiality
Due Care
People and companies must be careful not to injure others. Requires action at times to
remove hazard or inaction to refrain from a dangerous activity.
Act in Good Faith and Deal Fairly with Others
The obligation of good faith and fair dealing is fundamental in business. Another
components is disclosure of companies history and any possible issues. Generally
arises in the setting of contractural dealings.
Ways Businesses Address Ethics
, U.S. companies focus on developing a corporate culture that encourages ethical
behavior. They are motivated to develop ethical practices to reduce possible fines from
the government if an employee is connected to unethical practices.
Code of Ethics
Must be designed to deter wrongdoing and promote: honest and ethical conduct, full,
fair, accurate, timely and understandable disclosures, compliance with government
rules, prompt internal reporting of violation, and accountability for adherence to the code
Jurisprudence
The study of legal Philosophy
Natural Law
Law that consists of higher principles existing independently of human experience and
exists as an ideal condition that is either interest in human nature or derived form divine
source
Positivist View
Law and any body of rules imposed by a sovereign or sovereign body.
Historical View
Embodiment of society's customs. Law evolves with social development.
Sociological View
Sum of what the law-books permit and what human behavior provides.
Realist View
Product of various social influences on official discretion.
Critical View
Product of political and sociological judgments made by judges.
Economic View
Instrument by which efficient economic outcomes are achieved
Legislative Branch
Organized body of persons having the authority to make laws for a political unit.
Procedure: bill introduces to house or senate, referred to appropriate committee,
hearing and studies done by committee, bill sent to floor of congress it was introduced,
voted on, if it receives enough votes it is sent to other house of Congress, if same bill
passes then it goes to the presidents desk but if similar but different bill passes then
committee develops a compromise bill.
Executive Branch
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