Ethics is essential to the success of a business and the economy. Therefore most businesses develop a code of ethics. A code of ethics is a set of written guidelines issued by an organization to its employees and management to help them conduct their actions in accordance with its primary values and ethical standards (WebFinance, Inc., 2012). Standards and principles are important, but they are also vital in everyday life expectancy. This includes an individual's work environment. The purpose of a code of ethics policy is to provide its board of directors, administration, personnel, and others an orientation that abides by a business course of ethical standards, principles, and action. Each business should develop a code of ethics as a standard for his or her industry to abide by on a day to day basis. It should concentrate on key factors that are important to the individual business specification. The honesty of a business and its workforces is indispensable to the overall success of the organization as a unit. Knowing how important ethics is we have decided to evaluate a few companies in regards to their ethical systems. This evaluation will focus on four fortune 500 companies, Bank of America, CitiGroup (primarily known as Citibank), SunTrust, and Wells Fargo. This process will include general information about each company focusing primarily on their ethical systems, and how it is put into practice on an employee, management, or board of director level. This paper will also compare and contrast all of the companies and assess a conclusion on how ethically effective or ineffective each company operates.
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According to McNulty, "business ethics began to take shape as a formal discipline in the United States in the mid-1970s and in the intervening years the field has exploded and spread around the world" (2011). However, business ethics has been around since before 1960. The history just depends on one's perception and objectives in outlining the concept. Research has proven that ethics as a field of thought has existed in religion and philosophy for thousands of years and has been applied to business activities in the same way ethical values and norms have been applied to everyday life. McNulty goes on to say, "today, virtually every major corporation has a code of ethics and an officer responsible for advising the company on matters of ethics and legal compliance" (2011). Society views ethics as a moral behavior that is accepted and considered as right rather than wrong. Thus, we tend to easily criticize business and political leaders for ethical and moral shortcomings and would consider low managerial ethics as a major cause of businesses shortfalls.
The first company of the Fortune 500 companies that we are going to describe is Bank of America. Bank of America is one of the most respected, and solid companies of the United States. Its business ethics code is continually updating according to the present requirements of the business world. The ethics code of Bank of America is often modeled for other companies in the United States and around the world.
The Bank of America Code of Ethics (the "Code of Ethics" or the "Code") provides basic guidelines of business practice, and professional and personal conduct, that one is expected to adopt and uphold as a Bank of America employee. The public judges Bank of America by their actions as employees. This Code is intended to guide their conduct, and to instill public trust and confidence as they demonstrate their commitment to their Core Values. The Code of Ethics contains the following key themes consistent with their Core Values:
Doing the right thing - They have the obligation to do what's right for their customers, shareholders, communities and one another.
Trusting and Teamwork- They succeed together, taking combined responsibility for their customers' satisfaction.
Inclusive Meritocracy - They care about one another, value one another's differences, focus on outcomes and make every effort to help all associates reach their full potential.
Winning - They have a passion for attaining results and winning-for their customers, our shareholders, our communities and one another.
Leadership - They will be decisive leaders at every level, communicating their vision and taking action to help build a better future.
Always on Time
Marked to Standard
With that being said, we took a closer look at out some of the things that are expected of Bank of America's personnel and staff. The first thing we learned is that expected to avoid conflicts-or even the appearance of conflicts-between personal interests and the interests of Bank of America, its shareholders or customers. This includes gifts, hospitality, entertainment, information disclosure and dissemination, outside activities and relationships, and service providers. Simply stated, an employee should not participate in any activity that could embarrass or reflect poorly on Bank of America. As an employee one is also expected to promptly report any knowledge or information about employment-related conduct by another associate or agent of the corporation that you reasonably believe unethical. Next we learned that employees are expected to keep the information of their customers, the bank, their associates, and their suppliers confidential. This is of great importance so Bank of America requires their employees to participate in Information Protection and Privacy training.
We also learned that Bank of America expect their employees to properly care for and protect Bank of America property and assets, especially the assets that could be used for illegitimate business purposes. Their employees should conduct their personal financial affairs responsibly and keep their business expenses in order. This includes the areas of borrowing, business expenses, and personal fees. Overall, Bank of America's code of ethics touches on many topics that all guide their employees to be a team player that is committed to the highest standards of ethical and professional conduct.
Citibank is the second company to be researched, and we have gathered some interesting information in regards to the company, as well as their ethical system. For over 200 years Citibank has demonstrated common purpose, responsible finance, ingenuity and leadership. They hold their reputation in high regard, because they have approximately 200 million client accounts, 260,000 employees and does business in more than 160 counties. Citibank employs and provides services for people from every background, race, and religion. For that reason, Citibank has an in depth business ethics code to ensure they are acting in the best interest of their clients and the community. Their business ethics code includes:
Common Purpose - One team, with one goal: serving clients and stakeholders
Responsible Finance - Conduct that is transparent, prudent, and dependable
Ingenuity - Enhancing clients lives through innovation that harnesses the breadth and depth of information, global network and world-class products
Although Citibank's code of ethics involves many aspects, it all boils down to personnel and staff performing with the highest level of integrity. Citibank expects employees to not only remain professional with clients, to be respectful of one another. As a result, discrimination, harassment, or intimidation of any kind is prohibited. Citibank also seeks to protect personal and confidential information collected from employees as well as personal information from clients. Employees are prohibited from passing on personal information to anyone for non-business related purposes.
Furthermore, Citibank expects employees to common sense when unethical behavior is witnessed that is not cover in the company code of ethics, as the code cannot anticipate every issue employees may encounter. Employee are provided several options for reporting unethical behavior and are expected to report all concerns using one of the options as soon as possible. Citibank has an ethics hotline, an ethics website, a physical mailing address, and a fax number available for unethical concerns or issues. Nevertheless, as with any financial institution, conflict of interest is a very important issue. As a result, Citibank prohibits offering, granting, or promising anything of value to government officials, family members, or anyone else for special favors. Employees are also prohibited to accept anything of value from clients. All in all, Citibank expects employees to perform with the highest level of integrity using the above mention principles.
The next company on the list to be analyzed is SunTrust. SunTrust Bank is one of the largest and strongest financial holding companies in the United States. SunTrust was founded in 1891, is headquartered in Atlanta, Georgia, and is estimated to have total assets of more than $172 billion. With such a success in assets, it is obvious that they too have implemented business ethics into their business operations. They understand that in the world of commerce, institutions have certain guidelines to follow. Hence, SunTrust has a Code of Ethics Business Handbook that all employees have to read and follow. The company strives to keep a good reputation and to advance in success. Each employee is expected to abide by the rules of the codebook with all honesty, integrity, and sound judgment. The same way that an employee has to agree to act according to this code, SunTrust also has a pledge to every worker promising to:
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Seek to promote equal employment and career advancement opportunity, and to eliminate bias on the basis of race, creed, color, gender, religion, age, disability, national origin, veteran status, sexual orientation, or any classification protected by applicable law.
Maintain ongoing affirmative action programs, and expects managers and all other employees to comply fully with the spirit as well as the provisions of these programs
And to make demonstrated ability and qualification the primary basis for selection and promotion
In return, the employees are expected to be conscientious and do quality work. Employees should:
Follow the spirit and provisions of the Code.
Avoid illegal conduct in your business and personal life.
As you work, keep the best interests of SunTrust in mind.
Be truthful and accurate when you file for reimbursement of expenses and follow the relevant policies and guidelines contained in the SunTrust Accounting Policy Manual.
Be truthful and accurate during an internal or external investigation, and maintain the confidentiality of the investigation.
Comply with policies on harassment, substance abuse and other policies contained in the SunTrust Employee Handbook.
Perform your duties without discrimination on any basis, nor any type of harassment
Comply with the company's Information Security Brochure and be diligent in safeguarding the security of our information and physical assets.
Lastly, we analyzed Wells Fargo in order to gain some insight into their ethical system. Wells Fargo Bank has become one of the largest financial institutions in North America. However, Wells Fargo Bank is not only a bank; it is so much more. It's a premium financial service provider. It believes in its people and products to help them to succeed. So the question is, "how does business ethics contribute to its overall success?"
Wells Fargo is a company that not only puts down its values in ink, but they strictly abide by them as well. Wells Fargo expects its team members to conform to the utmost conceivable standards of ethics and business conduct with customers, team members, vendors, stockholders, other investors, and the communities it serves. It also expects them to adhere to all applicable laws, rules, and regulations that govern our businesses. Simply stated, Wells Fargo's aim is to promote an atmosphere in which ethical behavior is well recognized as a priority and practiced every day. This is of great importance because management believes that each team member has a personal responsibility to follow these standards because the actions of the staff of Wells Fargo ultimately influence what people think of the company.
Wells Fargo's code of ethics is grouped into sections that put emphasis on the essential and superseding principles that should guide their behavior. Those principles are:
act in a manner that will serve the best interests of Wells Fargo
act in a manner that is honest and trustworthy
act in a manner that will preserve confidential information
act in a manner that will avoid conflicts of interest or the appearance of conflicts of interest
Furthermore, Wells Fargo is committed to following all rules and regulations in all localities, states, and countries that they do business in not only because it is the right thing to do but because it helps them to maintain and protect the company reputation. Therefore, all employees are expected to support this commitment and serve Wells Fargo's best interest in several ways. A few of these ways are by one being knowledgeable about the job and recognizing that your professional and personal behavior can positively as well as negatively affect Wells Fargo's reputation and behaving in a responsible manner that sustains Wells Fargo's reputation.
However, Wells Fargo understands that they cannot and do not provide rules that will cover every possible circumstance, therefore, they expect their staff and personnel to not only use common sense and good judgment when there is a concern about inappropriate behavior, but to take the precautions to address the issue in a timely manner......even if it means reporting said behavior to through one of the various means (EthicsLine, web report, etc.) provided by the company. In a nutshell, Wells Fargo expects their employees to not do anything indirectly that they would not do directly under the Code.
Now that we have discussed each of the companies separately, it makes is it easier to compare and contrast them. When comparing and contrasting the four banks, Bank of America, Citibank, SunTrust and Wells Fargo, the banks are more alike than different. Their implied policies are almost identical and their differences are small. All of the banks have rules about dealing with employees and clients, internal or external. All four of the banks have a written code of conduct in which all employees are required to follow. Each bank's code of conduct might be written in different words, but ultimately portray the same ideas.
For starters, all of the banks must legally abide by the federal laws set by the government. Each of the banks has written in their code of conduct that they agree to follow all of the federal laws. All banks' codes of conduct have guidelines that discuss respecting and following all of the federal rules, laws and regulations. There are also guidelines that discuss following applicable local laws and regulations. The regulations include issues such as financial responsibility and human relations. Citibank also includes they expect employees to act with common sense when dealing with ethical issues that are not stated in the guidelines.
Second, all of the banks' Code of Ethics states their stance on acting in the best interest of the clients and stakeholders. However, all but SunTrust specifically adds valuing and respecting the community to their codes. Citibank adds an emphasis to the importance of suppliers along with their customers and employees. They even take it a step further with stating they hold their suppliers up to the same standards as their employees and agents. Wells Fargo also expands their list by including customers, team members, stock holders, vendors, other stockholders and the community.
Third, all of the banks' states that they strive to maintain a good reputation. Bank of America and Wells Fargo state they believe that professional and personal conduct of employees can affect the public's opinion of the company. Neither Citibank nor SunTrust mention this in their code of conduct or ethics policy, however the importance of professional and personal conduct of employees is certainly implicit.
Fourth, all of the banks have stated rules regarding employee behavior. Employees at all of the banks are expected to respect for one another without prejudice or discrimination. SunTrust plans to eliminate bias by maintaining ongoing affirmative action programs and equal employment. Citibank prohibits discrimination, harassment and even intimidation. Citibank also has diversity training.
Fifth, all four banks have promised to act ethically when it comes to financial responsibility. The banks do have many similarities when discussing the human relation issues within their code of ethics guidelines. Bank of America code states they promote opportunity from within the organization. They value their employees' differences and strive to work as a team. Citibank also has a teamwork motto - "one team one goal."
Last, when it comes to unethical activity, all the banks have various ways of reporting unethical behavior. All of the companies state they have a hotline, which the caller can remain anonymous and make complaints in complete confidence. However, SunTrust also has a policy and a time limit to reporting method address concerns. Citibank even includes online resources, a fax number and physical mailing address for their reporting methods.
As for the differences, there were only a few obvious ones. Citibank has an ethical policy that deals with foreign companies or suppliers that may not have the same ethical views. Citibank's policy is to not deal with companies that are known offenders of these unethical behaviors. When in doubt, they follow the rules of their local bank. Also, Citibank is the only bank with a stated environmental ethical policy and they encourage their suppliers to have an environmental policy as well. They have information on their website about their view on the greenhouse effect. They are taking steps to reduce their carbon footprint using pollution prevention and recycling. Citibank also uses conservation and resource utilization reduction programs. The bank also chooses not to conduct business with any company that has been known to engage in illegal logging.
In conclusion, it is possible to conclude that each of the very successful corporations operate effectively in regards to ethics. They utilize their Code of Ethics and make revisions frequently to readdress issues or concerns of not only their personnel and staff, but of their customers, investors, and all other involved in the company affairs. By implementing such strong business ethics, each bank has gained a trustworthy reputation that helps them to receive the recognition that they deserve. Simply put, the awareness that Bank of America, Citibank, SunTrust, and Wells Fargo exhibit toward business ethics they are able to continuously steer their corporations toward success and remain one of the Fortune 500 companies.