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Conflicts of Interest

Conflicts of Interest. Our Team’s Management Philosophy:

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Conflicts of Interest

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  1. Conflicts of Interest Our Team’s Management Philosophy: Any situation that creates, could create, or appears to create a conflict of interest between the interests of individual employees and the interests of the company and its shareholders should be discontinued and disclosed publicly or if possible avoided altogether. Team Members • Michael ColemanBusiness Management-Marketing • Daniel MartinPulp and Paper Engineering • Justin CrumpBusiness Management-Operations/Supply Chain

  2. Countrywide financial’s Vip Mortgages • Countrywide Home Loans was heavily involved in the subprime mortgage market. • Fannie Mae was the single largest buyer of Countrywide subprime mortgages. • After purchase by Fannie Mae, subprime mortgages from Countrywide were converted into mortgage backed securities. • 153 “VIP” mortgage loans well below the market rate were given to Fannie Mae employees, including two former CEOs, Franklin Raines and James A. Johnson. • 20 “VIP” mortgages were also given to employees of Freddie Mac, another buyer of mortgage loans. Emshwiller, John R. U.S. News: Fannie's 'VIP' Loans. Web. 22 Feb. 2011. <http://proquest.umi.com.www.lib.ncsu.edu:2048/pqdweb?index=0&did=2086426131&SrchMode=1&sid=1&Fmt=3&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1298522961&clientId=15092

  3. International paper code of ethics “Our shareowners have a right to expect that our business decisions are made ethically and in the best interests of the Company. Any situation that creates, or appears to create, a conflict of interest between personal interests and the interests of the Company must be avoided, eliminated, resolved or appropriately disclosed.” “Employees are prohibited from using their positions or the Company’s property or information for personal gain, and from competing with the Company. Employees are also prohibited from taking for themselves opportunities that are discovered through the use of Company information, and property or their position.” International Paper’s ethical stance on conflicts of interest illustrate Hosmer’s principles of Personal Virtue and Self-Interest as well the Transparency and Ethical Behavior principles from ISO 26000. Code Of Business Ethics. Web. 22 Feb. 2011. <http://internationalpaper.com/documents/EN/Ethics/Code_English.pdf>. Hosmer, Larue T. Brief Summary of Ten Ethical Principles. The Academy Of Management Review. Web. 12 Feb. 2011.

  4. By offering “VIP” loans to employees of companies involved in mutual business deals, Countrywide was willfully creating a potential conflict of interest. • By accepting “VIP” loans from Countrywide, Fannie Mae employees were unethically using their positions at the company for personal gain. • International Paper’s code of ethics states that employees should avoid all situations that could be or appear to be conflicts of interest. • Thus, Countrywide should not have offered preferred loans to business involved in mutual business deals. • The code of ethics also states that employees should never use their position within the company for personal or financial gain. • Thus, Fannie Mae employees should not have accepted preferred loans from Countrywide. Conflicts of interest

  5. Companies will avoid conflicts of interest and the bad publicity involved with them. • Companies will have a positive, ethically responsible public image. • Companies will foster a fair, open, and ethical business environment between competitors. • Stakeholder interests will be protected because company interests will take precedence over personal interests. • Provides a framework for employees to inquire about whether a situation is potential conflict of interest. (Ethical Manager) Advantages of Ip’s Ethical Philosophy regarding conflicts of interest

  6. Few clear, real world examples of conflicts of interest for employees to consult. Relies on the judgment of employees to determine whether a situation constitutes a conflict of interest. Also relies on ethical manager acting in an ethical manner, which might not always be the case. Disadvantages of ip’s ethical philosophy regarding conflicts of interest

  7. Provide more real world examples of conflicts of interest that might occur at the workplace for employees to consult. Add a system of confidentiality in employee’s dealings with the Ethics Manager. Make penalties and punishments for willfully engaging in conflict of interests and failing to disclose them universal and consistent in the organization. Create an ongoing company wide blog that lists anonymous employee questions submitted to the Ethics Manager with an appropriate answer. Recommendations for improvement to ethics management

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