Courseware from the course on Business Ethics that I taught at St. Joseph\'s College of Business Administration in 2009

1. Business
Ethics
Tathagat
Varma
Session
1/12:
17-­‐Jul-­‐09

2. Learning
Rules
• There
are
NO
wrong
quesAons
or
wrong
answers
in
the
class
– I
expect
you
to
interact,
quesAon
and
disagree

– Don’t
assume
anything
blindly!
• Pedagogy:
– 25%
teaching
(slides
and
references
will
be
shared)
– 25%
classroom
&
online
discussion
(no
slides
for
this
!)
– 25%
self-­‐study
(your
individual
effort
!)
– 25%
seminar
(working
as
a
team)
• I
may
not
know
everything.
Let’s
learn
together

3. Course
EvaluaAon
Marks
Due
Ac2vity
Remarks
Class
10%
Throughout
Individual
This
is
not
just
about
class
ParAcipaAon
aXendance,
but
acAvely
contribuAng
to
the
class
by
sharing
ideas,
quesAoning,
answering,
etc.
Quiz
20%
Session
4-­‐5
Individual
MulAple-­‐choice
quesAons
on
basic
concepts
and
simple
applicaAons.
Expect
quesAons
from
outside
what
will
be
covered
Seminar
20%
Session
10-­‐11
Group
Case
Study
analysis,
prepare
report
and
make
presentaAon.
50%
for
report
(group),
50%
for
presentaAon
(individual
performance)
End-­‐term
50%
Aaer
session
12
Individual
ApplicaAon
of
concepts
in
real-­‐life
situaAons.
Expect
quesAons
from
outside
what
will
be
covered

4. Greatest
Business
Scandals
• Ponzi
Scheme
• Ivar
Kreuger
• Savings
and
Loan
Debacle
• Ivan
Boesky
• Worldcom
• Tyoe
• HealthSouth
Corp
• Martha
Stewart
• Enron
• Madoff

5. Ponzi
Scheme
• In
the
1920s,
Charles
Ponzi
tricked
thousands
of
New
Englanders
into
invesAng
in
his
postage
stamp
business.
In
a
pyramid
scheme,
Ponzi
used
new
investors'
money
to
pay
off
earlier
investors.
Eventually
his
scheme
collapsed,
but
his
name
sAll
lives
on,
infamously.

6. Ivar
Kreuger
• As
the
"Swedish
Match
King,"
Ivar
Kreuger
was
once
one
of
the
richest
men
in
the
world.
From
1913
to
1932,
he
built
a
small
match
business
into
a
$600
million
global
empire.
Kreuger
controlled
40
percent
of
the
world's
match
producAon.
However,
aaer
his
suicide
in
1932,
forensic
auditors
found
that
Kreuger
had
operated
a
giant
pyramid
scheme.
His
debts
exceeded
Sweden's
naAonal
deficit.

7. Savings
and
Loan
Debacle
• During
the
1980s,
a
string
of
bad
business
decisions
triggered
more
than
1,000
U.S.
savings
and
loans
insAtuAons
to
fail.
Total
S
&
L
income
was
$781
million
in
1980;
the
next
year
it
fell
to
-­‐$4.6
billion.
Charles
KeaAng,
lea,
a
major
player
in
the
scandal,
took
advantage
of
small
investors
in
the
company,
Lincoln
Savings
and
Loan,
and
made
risky
investments
under
the
protecAon
of
the
KeaAng
Five
-­‐
involving
five
senators
who
had
received
$300,000
from
KeaAng
during
that
Ame.

8. Ivan
Boesky
• Arbitrageur
and
investment
banker
Ivan
Boesky
was
charged
in
1986
with
manipulaAng
the
stock
market
through
insider
trading.
On
November
14,
1986,
also
known
as
"Boesky
Day,"
he
paid
$100
million
to
make
up
for
insider
trading
profits.
He
later
spent
Ame
in
jail
following
his
plea-­‐bargain,agreeing
not
to
parAcipate
in
the
markets.
His
acAviAes
were
the
inspiraAon
for
the
Gordon
Gekko
character
in
the
film
"Wall
Street."

9. Worldcom
• In
2002,
telecommunicaAons
giant
Worldcom
commiXed
the
largest
accounAng
fraud
in
history.
Bernard
Ebbers,
former
Worldcom
chairman,
was
later
sentenced
to
25
years
in
prison
for
orchestraAng
an
$11
billion
scheme
that
drove
his
company
into
bankruptcy.

10. Tyco
• That
same
year,
former
CEO
L.
Dennis
Kozlowski
and
two
other
former
employers
used
$600
million
in
bonuses
and
company
loans
to
buy
extensive
personal
luxuries
like
vacaAon
homes,
upscale
apartments,
jewlery
and
clothing.

11. HealthSouth
Corp
• Fiaeen
employees
at
HealthSouth,
once
the
largest
U.S.
operator
of
rehabilitaAon
hospitals,
pleaded
guilty
in
2004
to
overstaAng
earnings
by
$2.5
billion.
CEO
Richard
Scrushy
was
acquiXed,
but
was
convicted
this
year
for
arranging
$500,000
in
donaAons
to
former
Alabama
Governor
Don
Siegelman
in
exchange
for
a
seat
on
a
state
hospital
regulatory
board.

12. Martha
Stewart
• ImClone
Systems
founder
Sam
Waksal
Apped
domesAc
diva
Martha
Stewart
that
the
FDA
would
not
approve
their
new
cancer
drug.
Stewart
sold
about
$228,000
in
stocks
right
before
ImClone
dropped
18
percent.
Although
she
first
claimed
she
was
innocent,
Stewart
took
a
plea
bargain
deal
and
served
several
months
in
prison
aaer
she
was
convicted
of
four
counts
of
obstrucAng
jusAce
and
lying
to
invesAgators.

13. Enron
• InflaAng
profits,
hiding
a
billion
dollars
in
debt
and
manipulaAng
the
energy
market
are
only
a
few
crimes
Enron
has
on
its
list.
In
2001,
Enron
declared
bankrupcy,
along
with
many
of
the
company's
investors.
This
month,
aaer
being
convicted,
former
CEO
Ken
Lay
died
of
a
heart
aXack.
Jeff
Skilling,
former
CEO,
was
found
guilty
of
fraud
and
conspiracy;
his
trial
is
scheduled
for
Oct.
23.

14. Nick
Leeson
• Year
made
public:
1995
EsAmated
Losses:
$1.4
billion
In
the
early
1990s,
Leeson,
a
trader
who
worked
for
BriAsh
investment
bank
Barings,
made
numerous
risky
moves
on
the
Singapore
InternaAonal
Money
Exchange
(SIMEX),
hiding
his
losses
from
the
firm
in
a
secret
account.
By
the
Ame
Barings
discovered
the
ruse,
it
was
too
late:
The
bank
was
$1.3
billion
in
debt
and
had
to
shut
its
doors.
Leeson,
who
served
more
than
six
years
in
prison,
publicly
owned
up
to
his
wrongdoing
in
two
books
about
the
scandal
and
its
fallout.

15. Michael
W.
Berger
• Year
made
public:
2000
EsAmated
Losses:
$393
million
ManhaXan
Capital
Management,
started
in
1996
by
Michael
W.
Berger,
lost
$400
million.
But
according
to
SEC
documents,
Berger
failed
to
report
the
losses
to
investors.
Instead
he
masked
them
by
doctoring
financial
data
in
clients'
accounts.
Berger
pleaded
guilty
to
securiAes
fraud
in
federal
court
but
fled
before
his
sentencing
in
2002.
He
was
caught
in
Austria
in
2007.

16. Madoff
• Year
made
public:
2008
EsAmated
Losses:
$65
billion
• Madoff
was
sentenced
on
June
29
to
150
years
in
prison,
aaer
pleading
guilty
on
March
12
to
federal
charges
that
include
fraud
and
money
laundering.
He
lured
many
high-­‐profile
investors
by
promising
to
beat
the
market
through
a
slow
and
steady
investment
strategy.
But
Madoff
actually
engaged
in
an
elaborate
Ponzi
scheme.
As
the
markets
tumbled
late
last
year,
alarmed
investors
asked
to
pull
their
money
out.
Madoff
couldn't
come
close
to
providing
the
$7
billion
requested
and
was
turned
in
by
his
sons

17. Allen
Stanford
• Year
made
public:
2009
EsAmated
Losses:
$8
billion
• Stanford,
founder
of
Stanford
Financial
Group
and
the
AnAgua-­‐based
Stanford
InternaAonal
Bank,
was
a
trusted
figure
among
elite
investors.
The
SEC,
FBI,
and
IRS
had
inquired
for
years
about
his
company,
which
promised
high-­‐yielding
returns
on
cerAficates
of
deposit.
In
mid-­‐February,
the
SEC
filed
a
civil
case
against
Stanford
and
two
associates,
accusing
the
Houston-­‐based
company
of
"orchestraAng"
a
massive
fraud.

18. Jerome
Kerviel
• Year
made
public:
2008
EsAmated
Losses:
$8
billion
• Société
Générale
trader
Kerviel
is
said
to
have
made
tens
of
millions
worth
of
futures
trades
without
the
knowledge
of
his
superiors.
Once
the
French
bank
discovered
his
acAons,
it
realized
that
his
trades
had
already
generated
tremendous
losses.
Kerviel
is
awaiAng
trial
and
if
convicted,
faces
up
to
three
years
in
prison.

19. Ralph
Cioffi
and
MaXhew
Tannin
• Year
made
public:
2008
EsAmated
Losses:
$1.6
billion
• Bear
Stearns
hedge
fund
managers
Cioffi
and
Tannin
allegedly
lied
to
investors
about
the
health
of
their
funds,
which
were
heavily
backed
by
subprime
mortgages.
The
funds
were
struggling,
but
their
alleged
falsehoods
lured
further
investment,
according
to
the
federal
indictment.
The
funds
buckled
in
June
2008,
cosAng
investors
$1.6
billion.
Cioffi
and
Tannin
were
both
charged
with
conspiracy
and
fraud;
both
pleaded
not
guilty
and
are
awaiAng
trial.

20. Edward
Strafaci
• Year
made
public:
2002
EsAmated
Losses:
$350
million
According
to
court
documents,
Strafaci,
execuAve
vice-­‐president
of
New
York-­‐based
Lipper
Holdings,
told
investors
in
reports
that
their
investments
into
two
Lipper
hedge
funds
were
growing
at
up
to
15%
annually.
In
reality
the
funds
were
losing
money.
In
2004,
Strafaci
pleaded
guilty
in
federal
court
to
securiAes
fraud
and
was
sentenced
to
six
years
in
prison.

21. Tom
PeXers
• Year
made
public:
2008
EsAmated
Losses:
At
least
$1
billion
PeXers,
a
money
manager
who
ran
PeXers
Group
Worldwide
in
Minnesota,
was
indicted
in
December
by
a
federal
grand
jury
on
20
counts
of
money
laundering,
conspiracy,
and
wire
and
mail
fraud.
He
is
alleged
to
have
duped
investors
from
1995
to
2008.
According
to
court
documents,
PeXers
allegedly
received
over
$1
billion
from
investors
and
subsequently
provided
them
with
false
reports
claiming
that
his
firm
was
using
their
money
to
buy
and
resell
wholesale
consumer
goods
for
profit.
The
complaint
alleges
that
these
transacAons
never
took
place.
PeXers,
who
pleaded
not
guilty,
is
awaiAng
trial.

22. Kazutsugi
Nami
• Year
made
public:
2009
EsAmated
Losses:
$1.4
billion
According
to
authoriAes
in
Japan,
Nami,
chairman
of
Japanese
bedding
linen
company
L&G,
claimed
he
could
get
a
36%
annual
return
on
investments
in
a
ficAonal
currency
he
created
and
dubbed
Enten,
meaning
"divine
yen."
Nami
allegedly
took
$1.4
billion
from
roughly
37,000
investors
by
convincing
them
that
aaer
the
world's
economies
collapsed,
his
digital
Enten
currency
would
make
them
wealthy.
Investors
grew
frustrated
when
Nami
allegedly
began
repaying
them
in
Enten.
In
February
he
and
21
former
execuAves
of
the
company
were
arrested
and
charged
with
fraud
in
Tokyo.

23. Paul
Greenwood
and
Stephen
Walsh
• Year
made
public:
2009
EsAmated
Losses:
$554
million
According
to
SEC
documents,
New
Yorkers
Greenwood
and
Walsh
ran
a
fraudulent
commodiAes
trading
company,
WG
Trading
Investors.
Instead
of
pursuing
a
"stock
index
arbitrage
strategy,"
Greenwood
and
Walsh
allegedly
used
the
funds
as
their
own
"piggy
bank,"
starAng
in
1996.
The
firm's
assets
have
been
frozen
and
the
SEC
has
filed
a
civil
complaint
in
federal
court
in
ManhaXan
charging
the
men
with
fraud.
They
also
face
criminal
charges.

24. Closer
home…
• Harshad
Mehta
• Ketan
Parekh
• Fodder
Scam
• Telgi
• Satyam
• …
• (
hXp://ismb-­‐india.blogspot.com/2009/01/
indias-­‐biggest-­‐scams.html)

25. Sample
Code
of
Ethics
• IEEE:
Among
oldest
(125
ys
old)
technical
professional
body
• PMI:
Larget
professional
body
in
the
field
of
Project
Management
• Wal-­‐Mart:
largest
company
in
the
world
• Tata:
Oldest
business
house
in
India,
immaculate
reputaAon
of
business
ethics
• Infosys:
the
posterchild
of
new
India;
unblemished
reputaAon

26. IEEE
Code
of
Ethics
We,
the
members
of
the
IEEE,
in
recogniAon
of
the
importance
of
our
technologies
in
affecAng
the
quality
of
life
throughout
the
world,
and
in
accepAng
a
personal
obligaAon
to
our
profession,
its
members
and
the
communiAes
we
serve,
do
hereby
commit
ourselves
to
the
highest
ethical
and
professional
conduct
and
agree:
1. to
accept
responsibility
in
making
decisions
consistent
with
the
safety,
health
and
welfare
of
the
public,
and
to
disclose
promptly
factors
that
might
endanger
the
public
or
the
environment;
2. to
avoid
real
or
perceived
conflicts
of
interest
whenever
possible,
and
to
disclose
them
to
affected
parAes
when
they
do
exist;
3. to
be
honest
and
realisAc
in
staAng
claims
or
esAmates
based
on
available
data;
4. to
reject
bribery
in
all
its
forms;
5. to
improve
the
understanding
of
technology,
its
appropriate
applicaAon,
and
potenAal
consequences;
6. to
maintain
and
improve
our
technical
competence
and
to
undertake
technological
tasks
for
others
only
if
qualified
by
training
or
experience,
or
aaer
full
disclosure
of
perAnent
limitaAons;
7. to
seek,
accept,
and
offer
honest
criAcism
of
technical
work,
to
acknowledge
and
correct
errors,
and
to
credit
properly
the
contribuAons
of
others;
8. to
treat
fairly
all
persons
regardless
of
such
factors
as
race,
religion,
gender,
disability,
age,
or
naAonal
origin;
9. to
avoid
injuring
others,
their
property,
reputaAon,
or
employment
by
false
or
malicious
acAon;
10. to
assist
colleagues
and
co-­‐workers
in
their
professional
development
and
to
support
them
in
following
this
code
of
ethics.

27. PMI
Code
of
Ethics

28. Wal-­‐Mart
Statement
of
Ethics

29. Tata
Group
Code
of
Conduct
This
comprehensive
document
serves
as
the
ethical
road
map
for
Tata
employees
and
companies,
and
provides
the
guidelines
by
which
the
group
conducts
its
businesses.
• Clause:1
-­‐
Na2onal
interest
The
Tata
group
is
commiXed
to
benefit
the
economic
development
of
the
countries
in
which
it
operates.
No
Tata
company
shall
undertake
any
project
or
acAvity
to
the
detriment
of
the
wider
interests
of
the
communiAes
in
which
it
operates.
• A
Tata
company’s
management
pracAces
and
business
conduct
shall
benefit
the
country,
localiAes
and
communiAes
in
which
it
operates,
to
the
extent
possible
and
affordable,
and
shall
be
in
accordance
with
the
laws
of
the
land.
• A
Tata
company,
in
the
course
of
its
business
acAviAes,
shall
respect
the
culture,
customs
and
tradiAons
of
each
country
and
region
in
which
it
operates.
It
shall
conform
to
trade
procedures,
including
licensing,
documentaAon
and
other
necessary
formaliAes,
as
applicable.

30. Clause:2
-­‐
Financial
reporAng
&records
• A
Tata
company
shall
prepare
and
maintain
its
accounts
fairly
and
accurately
and
in
accordance
with
the
accounAng
and
financial
reporAng
standards
which
represent
the
generally
accepted
guidelines,
principles,
standards,
laws
and
regulaAons
of
the
country
in
which
the
company
conducts
its
business
affairs.
• Internal
accounAng
and
audit
procedures
shall
reflect,
fairly
and
accurately,
all
of
the
company’s
business
transacAons
and
disposiAon
of
assets,
and
shall
have
internal
controls
to
provide
assurance
to
the
company’s
board
and
shareholders
that
the
transacAons
are
accurate
and
legiAmate.
All
required
informaAon
shall
be
accessible
to
company
auditors
and
other
authorised
parAes
and
government
agencies.There
shall
be
no
willful
omissions
of
any
company
transacAons
from
the
books
and
records,
no
advance-­‐income
recogniAon
and
no
hidden
bank
account
and
funds.
• Any
willful,
material
misrepresentaAon
of
and
/
or
misinformaAon
on
the
financial
accounts
and
reports
shall
be
regarded
as
a
violaAon
of
the
Code,
apart
from
inviAng
appropriate
civil
or
criminal
acAon
under
the
relevant
laws.
No
employee
shall
make,
authorise,
abet
or
collude
in
an
improper
payment,
unlawful
commission
or
bribing.

31. Clause:3
-­‐
CompeAAon
• A
Tata
company
shall
fully
support
the
development
and
operaAon
of
compeAAve
open
markets
and
shall
promote
the
liberalisaAon
of
trade
and
investment
in
each
country
and
market
in
which
it
operates.
Specifically,
no
Tata
company
or
employee
shall
engage
in
restricAve
trade
pracAces,
abuse
of
market
dominance
or
similar
unfair
trade
acAviAes.
• A
Tata
company
or
employee
shall
market
the
company’s
products
and
services
on
their
own
merits
and
shall
not
make
unfair
and
misleading
statements
about
compeAtors’
products
and
services.
Any
collecAon
of
compeAAve
informaAon
shall
be
made
only
in
the
normal
course
of
business
and
shall
be
obtained
only
through
legally
permiXed
sources
and
means.

32. Clause:4
-­‐
Equal
opportuniAes
•
employer
A
Tata
company
shall
provide
equal
opportuniAes
to
all
its
employees
and
all
qualified
applicants
for
employment
without
regard
to
their
race,
caste,
religion,
colour,
ancestry,
marital
status,
gender,
sexual
orientaAon,
age,
naAonality,
ethnic
origin
or
disability.
• Human
resource
policies
shall
promote
diversity
and
equality
in
the
workplace,
as
well
as
compliance
with
all
local
labour
laws,
while
encouraging
the
adopAon
of
internaAonal
best
pracAces.
• Employees
of
a
Tata
company
shall
be
treated
with
dignity
and
in
accordance
with
the
Tata
policy
of
maintaining
a
work
environment
free
of
all
forms
of
harassment,
whether
physical,
verbal
or
psychological.
Employee
policies
and
pracAces
shall
be
administered
in
a
manner
consistent
with
applicable
laws
and
other
provisions
of
this
Code,
respect
for
the
right
to
privacy
and
the
right
to
be
heard,
and
that
in
all
maXers
equal
opportunity
is
provided
to
those
eligible
and
decisions
are
based
on
merit.

33. Clause:5
-­‐
Gias
and
donaAons
• A
Tata
company
and
its
employees
shall
neither
receive
nor
offer
or
make,
directly
or
indirectly,
any
illegal
payments,
remuneraAon,
gias,
donaAons
or
comparable
benefits
that
are
intended,
or
perceived,
to
obtain
uncompeAAve
favours
for
the
conduct
of
its
business.
The
company
shall
cooperate
with
governmental
authoriAes
in
efforts
to
eliminate
all
forms
of
bribery,
fraud
and
corrupAon.
• However,
a
Tata
company
and
its
employees
may,
with
full
disclosure,
accept
and
offer
nominal
gias,
provided
such
gias
are
customarily
given
and
/
or
are
of
a
commemoraAve
nature.
Each
company
shall
have
a
policy
to
clarify
its
rules
and
regulaAons
on
gias
and
entertainment,
to
be
used
for
the
guidance
of
its
employees.

34. Clause:6
-­‐
Government
agencies
• A
Tata
company
and
its
employees
shall
not,
unless
mandated
under
applicable
laws,
offer
or
give
any
company
funds
or
property
as
donaAon
to
any
government
agency
or
its
representaAve,
directly
or
through
intermediaries,
in
order
to
obtain
any
favourable
performance
of
official
duAes.
A
Tata
company
shall
comply
with
government
procurement
regulaAons
and
shall
be
transparent
in
all
its
dealings
with
government
agencies.

35. Clause:7
-­‐
PoliAcal
non-­‐alignment
• A
Tata
company
shall
be
commiXed
to
and
support
the
consAtuAon
and
governance
systems
of
the
country
in
which
it
operates.
• A
Tata
company
shall
not
support
any
specific
poliAcal
party
or
candidate
for
poliAcal
office.
The
company’s
conduct
shall
preclude
any
acAvity
that
could
be
interpreted
as
mutual
dependence
/
favour
with
any
poliAcal
body
or
person,
and
shall
not
offer
or
give
any
company
funds
or
property
as
donaAons
to
any
poliAcal
party,
candidate
or
campaign.

36. Clause:8
-­‐
Health,
safety
and
environment
• A
Tata
company
shall
strive
to
provide
a
safe,
healthy,
clean
and
ergonomic
working
environment
for
its
people.
It
shall
prevent
the
wasteful
use
of
natural
resources
and
be
commiXed
to
improving
the
environment,
parAcularly
with
regard
to
the
emission
of
greenhouse
gases,
and
shall
endeavour
to
offset
the
effect
of
climate
change
in
all
spheres
of
its
acAviAes.
• A
Tata
company,
in
the
process
of
producAon
and
sale
of
its
products
and
services,
shall
strive
for
economic,
social
and
environmental
sustainability.

37. Clause:9
-­‐
Quality
of
products
and
services
• A
Tata
company
shall
be
commiXed
to
supply
goods
and
services
of
world
class
quality
standards,
backed
by
aaer-­‐sales
services
consistent
with
the
requirements
of
its
customers,
while
striving
for
their
total
saAsfacAon.
The
quality
standards
of
the
company’s
goods
and
services
shall
meet
applicable
naAonal
and
internaAonal
standards.
• A
Tata
company
shall
display
adequate
health
and
safety
labels,
caveats
and
other
necessary
informaAon
on
its
product
packaging.

38. Clause:10
-­‐
Corporate
ciAzenship
• A
Tata
company
shall
be
commiXed
to
good
corporate
ciAzenship,
not
only
in
the
compliance
of
all
relevant
laws
and
regulaAons
but
also
by
acAvely
assisAng
in
the
improvement
of
quality
of
life
of
the
people
in
the
communiAes
in
which
it
operates.
The
company
shall
encourage
volunteering
by
its
employees
and
collaboraAon
with
community
groups.
• Tata
companies
are
also
encouraged
to
develop
systemaAc
processes
and
conduct
management
reviews,
as
stated
in
the
Tata
‘corporate
sustainability
protocol’,
from
Ame
to
Ame
so
as
to
set
strategic
direcAon
for
social
development
acAvity.
• The
company
shall
not
treat
these
acAviAes
as
opAonal,
but
should
strive
to
incorporate
them
as
an
integral
part
of
its
business
plan.

39. Clause:11
-­‐
CooperaAon
of
Tata
companies
• A
Tata
company
shall
cooperate
with
other
Tata
companies
including
applicable
joint
ventures,
by
sharing
knowledge
and
physical,
human
and
management
resources,
and
by
making
efforts
to
resolve
disputes
amicably,
as
long
as
this
does
not
adversely
affect
its
business
interests
and
shareholder
value.
• In
the
procurement
of
products
and
services,
a
Tata
company
shall
give
preference
to
other
Tata
companies,
as
long
as
they
can
provide
these
on
compeAAve
terms
relaAve
to
third
parAes.

40. Clause:12
-­‐
Public
representaAon
of
the
company
and
the
group
• The
Tata
group
honours
the
informaAon
requirements
of
the
public
and
its
stakeholders.
In
all
its
public
appearances,
with
respect
to
disclosing
company
and
business
informaAon
to
public
consAtuencies
such
as
the
media,
the
financial
community,
employees,
shareholders,
agents,
franchisees,
dealers,
distributors
and
importers,
a
Tata
company
or
the
Tata
group
shall
be
represented
only
by
specifically
authorised
directors
and
employees.
It
shall
be
the
sole
responsibility
of
these
authorised
representaAves
to
disclose
informaAon
about
the
company
or
the
group.

41. Clause:13
-­‐
Third
party
representaAon
• ParAes
which
have
business
dealings
with
the
Tata
group
but
are
not
members
of
the
group,
such
as
consultants,
agents,
sales
representaAves,
distributors,
channel
partners,
contractors
and
suppliers,
shall
not
be
authorised
to
represent
a
Tata
company
without
the
wriXen
permission
of
the
Tata
company,
and
/
or
if
their
business
conduct
and
ethics
are
known
to
be
inconsistent
with
the
Code.
• Third
parAes
and
their
employees
are
expected
to
abide
by
the
Code
in
their
interacAon
with,
and
on
behalf
of,
a
Tata
company.
Tata
companies
are
encouraged
to
sign
a
non-­‐disclosure
agreement
with
third
parAes
to
support
confidenAality
of
informaAon.

42. Clause:14
-­‐
Use
of
the
Tata
brand
• The
use
of
the
Tata
name
and
trademark
shall
be
governed
by
manuals,
codes
and
agreements
to
be
issued
by
Tata
Sons.
The
use
of
the
Tata
brand
is
defined
in
and
regulated
by
the
Tata
Brand
Equity
and
Business
PromoAon
agreement.
No
third
party
or
joint
venture
shall
use
the
Tata
brand
to
further
its
interests
without
specific
authorisaAon.

43. Clause:15
-­‐
Group
policies
• A
Tata
company
shall
recommend
to
its
board
of
directors
the
adopAon
of
policies
and
guidelines
periodically
formulated
by
Tata
Sons.

44. Clause:16
-­‐
Shareholders
• A
Tata
company
shall
be
commiXed
to
enhancing
shareholder
value
and
complying
with
all
regulaAons
and
laws
that
govern
shareholder
rights.The
board
of
directors
of
a
Tata
company
shall
duly
and
fairly
inform
its
shareholders
about
all
relevant
aspects
of
the
company’s
business,
and
disclose
such
informaAon
in
accordance
with
relevant
regulaAons
and
agreements.

45. Clause:17
-­‐
Ethical
conduct
• Every
employee
of
a
Tata
company,
including
full-­‐Ame
directors
and
the
chief
execuAve,
shall
exhibit
culturally
appropriate
deportment
in
the
countries
they
operate
in,
and
deal
on
behalf
of
the
company
with
professionalism,
honesty
and
integrity,
while
conforming
to
high
moral
and
ethical
standards.
Such
conduct
shall
be
fair
and
transparent
and
be
perceived
to
be
so
by
third
parAes.
• Every
employee
of
a
Tata
company
shall
preserve
the
human
rights
of
every
individual
and
the
community,
and
shall
strive
to
honour
commitments.
• Every
employee
shall
be
responsible
for
the
implementaAon
of
and
compliance
with
the
Code
in
his
/
her
environment.
Failure
to
adhere
to
the
Code
could
aXract
severe
consequences,
including
terminaAon
of
employment.

46. Clause:18
-­‐
Regulatory
compliance
• Employees
of
a
Tata
company,
in
their
business
conduct,
shall
comply
with
all
applicable
laws
and
regulaAons,
in
leXer
and
spirit,
in
all
the
territories
in
which
they
operate.
If
the
ethical
and
professional
standards
of
applicable
laws
and
regulaAons
are
below
that
of
the
Code,
then
the
standards
of
the
Code
shall
prevail.
• Directors
of
a
Tata
company
shall
comply
with
applicable
laws
and
regulaAons
of
all
the
relevant
regulatory
and
other
authoriAes.
As
good
governance
pracAce
they
shall
safeguard
the
confidenAality
of
all
informaAon
received
by
them
by
virtue
of
their
posiAon.

47. Clause:19
-­‐
Concurrent
employment
• Consistent
with
applicable
laws,
an
employee
of
a
Tata
company
shall
not,
without
the
requisite,
officially
wriXen
approval
of
the
company,
accept
employment
or
a
posiAon
of
responsibility
(such
as
a
consultant
or
a
director)
with
any
other
company,
nor
provide
freelance
services
to
anyone,
with
or
without
remuneraAon.
In
the
case
of
a
full-­‐Ame
director
or
the
chief
execuAve,
such
approval
must
be
obtained
from
the
board
of
directors
of
the
company.

48. Clause:20
-­‐
Conflict
of
interest
• An
employee
or
director
of
a
Tata
company
shall
always
act
in
the
interest
of
the
company,
and
ensure
that
any
business
or
personal
associaAon
which
he
/
she
may
have
does
not
involve
a
conflict
of
interest
with
the
operaAons
of
the
company
and
his
/
her
role
therein.
An
employee,
including
the
execuAve
director
(other
than
independent
director)
of
a
Tata
company,
shall
not
accept
a
posiAon
of
responsibility
in
any
other
non-­‐Tata
company
or
not-­‐for-­‐profit
organisaAon
without
specific
sancAon.
• The
above
shall
not
apply
to
(whether
for
remuneraAon
or
otherwise):
– NominaAons
to
the
boards
of
Tata
companies,
joint
ventures
or
associate
companies.
– Memberships
/
posiAons
of
responsibility
in
educaAonal
/
professional
bodies,
wherein
such
associaAon
will
benefit
the
employee
/
Tata
company.
– NominaAons
/
memberships
in
government
commiXees
/
bodies
or
organisaAons.
– ExcepAonal
circumstances,
as
determined
by
the
competent
authority.
• Competent
authority,
in
the
case
of
all
employees,
shall
be
the
chief
execuAve,
who
in
turn
shall
report
such
excepAonal
cases
to
the
board
of
directors
on
a
quarterly
basis.
In
case
of
the
chief
execuAve
and
execuAve
directors,
the
Group
Corporate
Centre
shall
be
the
competent
authority.
• An
employee
or
a
director
of
a
Tata
company
shall
not
engage
in
any
business,
relaAonship
or
acAvity
which
might
conflict
with
the
interest
of
his
/
her
company
or
the
Tata
group.
A
conflict
of
interest,
actual
or
potenAal,
may
arise
where,
directly
or
indirectly…
– An
employee
of
a
Tata
company
engages
in
a
business,
relaAonship
or
acAvity
with
anyone
who
is
party
to
a
transacAon
with
his
/
her
company.
– An
employee
is
in
a
posiAon
to
derive
an
improper
benefit,
personally
or
to
any
of
his
/
her
relaAves,
by
making
or
influencing
decisions
relaAng
to
any
transacAon.
– An
independent
judgement
of
the
company’s
or
group’s
best
interest
cannot
be
exercised.
• The
main
areas
of
such
actual
or
potenAal
conflicts
of
interest
shall
include
the
following:
– An
employee
or
a
full-­‐Ame
director
of
a
Tata
company
conducAng
business
on
behalf
of
his
/
her
company
or
being
in
a
posiAon
to
influence
a
decision
with
regard
to
his
/
her
company’s
business
with
a
supplier
or
customer
where
his
/
her
relaAve
is
a
principal
officer
or
representaAve,
resulAng
in
a
benefit
to
him
/
her
or
his
/
her
relaAve.
– Award
of
benefits
such
as
increase
in
salary
or
other
remuneraAon,
posAng,
promoAon
or
recruitment
of
a
relaAve
of
an
employee
of
a
Tata
company,
where
such
an
individual
is
in
a
posiAon
to
influence
decisions
with
regard
to
such
benefits.
– The
interest
of
the
company
or
the
group
can
be
compromised
or
defeated.
• Notwithstanding
such
or
any
other
instance
of
conflict
of
interest
that
exist
due
to
historical
reasons,
adequate
and
full
disclosure
by
interested
employees
shall
be
made
to
the
company’s
management.
It
is
also
incumbent
upon
every
employee
to
make
a
full
disclosure
of
any
interest
which
the
employee
or
the
employee’s
immediate
family,
including
parents,
spouse
and
children,
may
have
in
a
family
business
or
a
company
or
firm
that
is
a
compeAtor,
supplier,
customer
or
distributor
of
or
has
other
business
dealings
with
his
/
her
company.
• Upon
a
decision
being
taken
in
the
maXer,
the
employee
concerned
shall
be
required
to
take
necessary
acAon,
as
advised,
to
resolve
/
avoid
the
conflict.
• If
an
employee
fails
to
make
the
required
disclosure
and
the
management
of
its
own
accord
becomes
aware
of
an
instance
of
conflict
of
interest
that
ought
to
have
been
disclosed
by
the
employee,
the
management
shall
take
a
serious
view
of
the
maXer
and
consider
suitable
disciplinary
acAon
against
the
employee.

49. Clause:21
-­‐
SecuriAes
transacAons
and
•
confidenAal
informaAon
An
employee
of
a
Tata
company
and
his
/
her
immediate
family
shall
not
derive
any
benefit
or
counsel,
or
assist
others
to
derive
any
benefit,
from
access
to
and
possession
of
informaAon
about
the
company
or
group
or
its
clients
or
suppliers
that
is
not
in
the
public
domain
and,
thus,
consAtutes
unpublished,
price-­‐sensiAve
insider
informaAon.
• An
employee
of
a
Tata
company
shall
not
use
or
proliferate
informaAon
that
is
not
available
to
the
invesAng
public,
and
which
therefore
consAtutes
insider
informaAon,
for
making
or
giving
advice
on
investment
decisions
about
the
securiAes
of
the
respecAve
Tata
company,
group,
client
or
supplier
on
which
such
insider
informaAon
has
been
obtained.
• Such
insider
informaAon
might
include
(without
limitaAon)
the
following:
– AcquisiAon
and
divesAture
of
businesses
or
business
units.
– Financial
informaAon
such
as
profits,
earnings
and
dividends.
– Announcement
of
new
product
introducAons
or
developments.
– Asset
revaluaAons.
– Investment
decisions
/
plans.
– Restructuring
plans.
– Major
supply
and
delivery
agreements.
– Raising
of
finances.
• An
employee
of
a
Tata
company
shall
also
respect
and
observe
the
confidenAality
of
informaAon
pertaining
to
other
companies,
their
patents,
intellectual
property
rights,
trademarks
and
invenAons;
and
strictly
observe
a
pracAce
of
non-­‐disclosure.

50. Clause:22
-­‐
ProtecAng
company
assets
• The
assets
of
a
Tata
company
shall
not
be
misused;
they
shall
be
employed
primarily
and
judiciously
for
the
purpose
of
conducAng
the
business
for
which
they
are
duly
authorised.
These
include
tangible
assets
such
as
equipment
and
machinery,
systems,
faciliAes,
materials
and
resources,
as
well
as
intangible
assets
such
as
informaAon
technology
and
systems,
proprietary
informaAon,
intellectual
property,
and
relaAonships
with
customers
and
suppliers.

51. Clause:23
-­‐
CiAzenship
• The
involvement
of
a
Tata
employee
in
civic
or
public
affairs
shall
be
with
express
approval
from
the
chief
execuAve
of
his
/
her
company,
subject
to
this
involvement
having
no
adverse
impact
on
the
business
affairs
of
the
company
or
the
Tata
group.

52. Clause:24
-­‐
Integrity
of
data
furnished
• Every
employee
of
a
Tata
company
shall
ensure,
at
all
Ames,
the
integrity
of
data
or
informaAon
furnished
by
him/her
to
the
company.
He/she
shall
be
enArely
responsible
in
ensuring
that
the
confidenAality
of
all
data
is
retained
and
in
no
circumstance
transferred
to
any
outside
person/party
in
the
course
of
normal
operaAons
without
express
guidelines
from
or,
the
approval
of
the
management.

53. Clause:25
-­‐
ReporAng
concerns
• Every
employee
of
a
Tata
company
shall
promptly
report
to
the
management,
and
/
or
third-­‐party
ethics
helpline,
when
she
/
he
becomes
aware
of
any
actual
or
possible
violaAon
of
the
Code
or
an
event
of
misconduct,
act
of
misdemeanour
or
act
not
in
the
company’s
interest.
Such
reporAng
shall
be
made
available
to
suppliers
and
partners,
too.
• Any
Tata
employee
can
choose
to
make
a
protected
disclosure
under
the
whistleblower
policy
of
the
company,
providing
for
reporAng
to
the
chairperson
of
the
audit
commiXee
or
the
board
of
directors
or
specified
authority.
Such
a
protected
disclosure
shall
be
forwarded,
when
there
is
reasonable
evidence
to
conclude
that
a
violaAon
is
possible
or
has
taken
place,
with
a
covering
leXer,
which
shall
bear
the
idenAty
of
the
whistleblower.
• The
company
shall
ensure
protecAon
to
the
whistleblower
and
any
aXempts
to
inAmidate
him
/
her
would
be
treated
as
a
violaAon
of
the
Code.
Note:
The
TCoC
does
not
provide
a
full,
comprehensive
and
complete
explanaAon
of
all
the
rules
that
employees
are
bound
to
follow.
Employees
have
a
conAnuing
obligaAon
to
familiarise
themselves
with
all
applicable
laws,
company
policies,
procedures
and
work
rules.

54. Infosys
Code
of
Ethics

55. References
• Advice
from
Aristotle
• A
History
of
Business
Ethics
• Business
Ethics
Primer
• How
are
Ethics
and
Excellence
related
?
(my
blog
post)
• Business
Ethics
from
Knowledge@Wharton
• Modern
Ethics