• Improving corporate image/reputation/brand loyalty – Strong ethical principles that go beyond upholding the law can add value to Apusco in terms of improving its brand. Failure to act ethically can cause social, economic and environmental damage and undermine Apusco’s long-term survival. Being such a large, multinational organisation, Apusco’s ability to demonstrate strong ethical principles across its whole organisation will help to sustain its future viability. Ethics must be embedded in its business models, organisational strategy and decision making processes.
• Often organisations which adopt strong ethical approaches will also see an improvement in profitability. Although this may not be the main driver for Apusco, it is a consideration in a highly competitive global marketplace.
• By having a range of suppliers which Apusco has trained in its ethical ways of operating, it is investing in the future and can work with them on repeated projects globally. This will tie these suppliers into Apusco and provide a stable working relationship which will deliver cost savings in the long-term. This is a complete contrast to many companies which operate a short term focus and change suppliers regularly or which are let down by non-delivery or poor performance of its sub-contractors. Apusco should not experience these problems and should gain a better reputation with its customers for on time delivery and good quality of work. All suppliers (services and products, such as building materials) will be at the standard that Apusco expects and requires as it has established a good working relationship with the companies it works with. Also, by being ethically responsible, Apusco can reduce its cost by avoiding fines and law suits as well as payment of compensations which are associated with being ethically irresponsible.
• The ethical tone has to come from the top of the organisation. Therefore, it is at a strategic level that the ethical tone is set. The senior managers and business leaders of Apusco must demonstrate an ethical approach by example. This will show that middle and junior managers will be rewarded for taking an ethical stance and create the appropriate organisational culture.
• Apusco places high regard towards ethical and sustainable business practices which appear to be clearly communicated to staff and suppliers and by communicating its positive actions this should assist in achieving its overall business objectives.

There are two approaches available to the board in its effort to resolve ethical issues in Persiba Chemist Ltd. These are Compliance-based approach and integrity-based approach. Each of these approaches are discussed below:
Compliance-based approach
A compliance-based approach is basically designed to ensure that the company acts within the letter and spirit of the law, and that violations are prevented, detected and punished. Generally, organisations faced with the legal consequences of unethical behaviour take legal precautions such as the following:

• Follow laid down compliance procedure to detect misconduct on the part of any employee. The board should activate its compliance system by taking suspected employees through compliance procedures.
• Institution of audits of various contracts within the company to unravel any unethical conduct by management.
• Put in place whistleblower mechanism or systems to encourage employees to report unethical and criminal conduct/behaviour without fear of retribution.
• Strict disciplinary procedures should be instituted to deal with transgressing employees.
  Integrity-based approach
  An integrity-based approach combines a concern for the law with an emphasis on managerial responsibility for ethical behaviour. Integrity-based approach strives to define company’s guiding values, aspirations and patterns of thought and conduct. When integrated into the day-to-day operations of the organisation, it helps prevent damaging ethical lapses, while tapping into powerful human impulses for moral thought and action. The company may pursue the following strategies:
• Consciously building/inculcating ethical values and conduct into the culture of the organisation so as to become taken-for-granted assumption.
• Regular ethical based training programmes for all levels of staff in the company.
• Encouraging staff to whistle blow any unethical conduct and offering necessary protection for such staff.
  Incorporating serious ethical background checks in the recruitment process in order to weed out recruitment of unethical joiners.

Code of ethics may usefully draw upon the underlying principles of good governance or existing codes such as the IFAC code for accountants. Blending the most appropriate elements from a variety of sources is a difficult skill to apply in practice but necessary for the creation of a worthy document.
Below are the fundamental principles that should be included in code of ethics
A professional accountant is required to comply with the following fundamental principles:

• Integrity
  A professional accountant should be straightforward and honest in all professional and business relationships.
• Objectivity
  A professional accountant should not allow bias, conflict of interest or undue influence of others to override professional or business judgments.
• Professional Competence and Due Care
  A professional accountant has a continuing duty to maintain professional knowledge and skill at the level required to ensure that a client or employer receives competent professional service based on current developments in practice, legislation and techniques. A professional accountant should act diligently and in accordance with applicable technical and professional standards when providing professional services.
• Confidentiality
  A professional accountant should respect the confidentiality of information acquired as a result of professional and business relationships and should not disclose any such information to third parties without proper and specific authority unless there is a legal or professional right or duty to disclose. Confidential information acquired as a result of professional and business relationships should not be used for the personal advantage of the professional accountant or third parties.
• Professional Behavior
  A professional accountant should comply with relevant laws and regulations and should avoid any action that discredits the profession.

In the area of products and production, managers have responsibility to ensure that the public (consumers) and their own employees are protected from danger. Attempts to increase profitability by cutting costs may lead to dangerous working conditions or to inadequate safety standards in products. In the United States, product liability litigation is so common that this legal treat may be a more effective deterrent than general ethical standards.
Another ethical problem concerns payment by companies to government officials who have power to help or hinder the payers’ operations. Some of the issues which exist in this area are:
i. Extortion. Foreign officials have been known to threaten companies with the complete closure of their local operations unless suitable payments are made.
ii. Bribery. This refers to payments for services to which a company is not legally entitled. There are some fine distinctions to be drawn; for example, some managers regard political contributions as bribery.
iii. Grease money. Multinational companies are sometimes unable to obtain services to which they are legally entitled because of deliberate stalling by local officials. Cash payments to the right people may then be enough to oil the machinery of bureaucracy.
iv. Gifts. In some cultures (such as Japan) gifts are regarded as an essential part of civilized negotiation, even in circumstances where to Western eyes they might appear ethically dubious. Managers operating in such a culture may feel at liberty to adopt the local customs.
v. Discrimination against an employee or any group of employees based on gender, religion, beliefs, etc.
vi. Environmental pollution and degradation
vii. Failure to provide the right working environment and conditions of service for employees (e.g. unfair labour practices on the part of management-which can result in legal actions and avoidable cost for the company).