FACULTY OF ECONOMICS AND BUSINESS
Ethics, Responsibility and
Sustainability
Summary
MASTER OF BUSINESS ADMINISTRATION
Click to select a major or specialisation
Academic year 2024-2025
,Table of contents
1 Why is this topic so important? ................................................................................. 1
1.1 Introduction ..................................................................................................... 1
1.2 Terminology: Fundaments of ERS ................................................................. 1
1.3 Emergence of a common language................................................................ 3
1.4 Challenges ...................................................................................................... 3
1.4.1 Political impact on sustainability: Trump .............................................. 3
1.4.2 Limits to Growth: The Limits to Growth (1972)..................................... 4
1.4.3 Fundamentals of Sustainable Development: Brundtland Report (1987)
4
1.4.4 Triple Bottom Line (John Elkington: “Is it progress if a cannibal uses a
fork?”) ................................................................................................... 4
1.4.5 GRI (Global Reporting Initiative) .......................................................... 5
1.4.6 Creating Shared Value (CSV) .............................................................. 5
1.4.7 Summary challenges ............................................................................ 5
1.5 Sustainable Development Goals (SDG) and planet boundaries (2023)......... 6
1.6 What are the SDGs, and their ultimate end, that is shared by all stakeholders:
How to create a world where change is sustainable? .................................... 7
1.6.1 The SDGs (Sustainable Development Goals)...................................... 7
1.6.2 The 5 Ps of Sustainable Development ................................................. 8
1.6.3 The Ultimate Shared End Goal ............................................................ 8
1.6.4 Stakeholder Involvement ...................................................................... 9
1.7 SDGs and the Private Sector ......................................................................... 9
1.7.1 A Renewed Pledge to Support the SDGs (2024) ................................. 9
1.7.2 Key Findings from the Sustainable Development Goals Report 2024
10
1.7.3 Wrap-up: Conclusions ........................................................................ 10
2 Why is Business Ethics becoming so important? ................................................... 11
2.1 Relevance ..................................................................................................... 11
2.2 Issues of right or wrong ................................................................................ 12
2.3 Three Western ethical theories..................................................................... 12
2.3.1 Cases ................................................................................................. 12
2.4 Ethical leadership ......................................................................................... 12
2.4.1 Why is ethical leadership important? ................................................. 13
2.5 Personal vs. corporate accountability ........................................................... 13
2.5.1 Milgram experiment ............................................................................ 13
2.5.2 Stanford experiment ........................................................................... 13
2.6 Globalisation: ethics and the law .................................................................. 14
2.6.1 Legal ≠ Ethical .................................................................................... 14
2.7 Ethical decision-making ................................................................................ 14
2.8 Ethics and compliance programs ................................................................. 14
2.9 Key components of Business Ethics Management ...................................... 15
2.10 Code of Conduct (CoC) ................................................................................ 15
2.10.1 Purpose and Scope of the Code ........................................................ 16
2.10.2 Structure and Key Characteristics ...................................................... 16
2.10.3 Preparing a Code of Conduct ............................................................. 16
2.10.4 Distribution and Implementation ......................................................... 17
I
, 2.10.5 The Code as a Tool for Cultural Change ........................................... 17
2.10.6 Reporting and Enforcement ............................................................... 17
2.10.7 Success Factors for an Effective Code .............................................. 17
3 Risk Management & Compliance ........................................................................... 18
3.1 Regulator push ............................................................................................. 18
3.2 Swiss Cheese Model .............................................................................. 18
3.3 Framework to manage risk ........................................................................... 19
3.3.1 Overall flow ......................................................................................... 19
3.3.2 Main Steps in the Risk Management Process ................................... 19
3.4 Three lines of defence model ................................................................. 20
3.4.1 Purpose of the three lines of defence model...................................... 21
3.5 How to Conduct a Risk Analysis ............................................................. 21
3.5.1 Establish the context .......................................................................... 21
3.5.2 Identify the risks ................................................................................. 22
3.5.3 Analyse the risks ................................................................................ 22
3.5.4 Evaluate the risks ............................................................................... 25
3.5.5 Treat the risks ..................................................................................... 25
4 Whistleblowing ........................................................................................................ 27
4.1 Whistleblowing cases ................................................................................... 28
4.1.1 Case Theranos ................................................................................... 28
4.1.2 Case FTX ........................................................................................... 28
4.1.3 Case Allhere education ...................................................................... 28
4.2 Creating a safe environment for staff ........................................................... 29
4.3 A choice among others: reporting channels ................................................. 29
4.4 Is it good to know ? ....................................................................................... 29
4.5 Anonymous reports ? ................................................................................... 30
4.6 Protecting Whistleblowers ............................................................................ 30
4.7 What to do with whistleblowers calls ............................................................ 30
4.7.1 Effective Investigations – The ROI ..................................................... 31
4.7.2 Goals of an Investigation .................................................................... 31
4.8 Understanding the Investigator’s Role.......................................................... 31
4.8.1 Key Qualities of an Effective Investigator ........................................... 31
4.8.2 5 STEPS in the Investigation ............................................................. 31
4.9 Case study : KBR and the Nigerian LNG Contracts ..................................... 32
4.9.1 5-Step Investigation (as Chief Compliance Officer) ........................... 32
4.9.2 Conclusion: What Does It Mean ? ...................................................... 34
4.10 Whistleblower Investigations: From Trigger to Remediation ........................ 35
4.10.1 Investigation triggers .......................................................................... 35
4.10.2 Triage ................................................................................................. 36
4.10.3 Plan and assign .................................................................................. 37
4.10.4 Investigation execution ....................................................................... 38
4.10.5 Remediation and reporting ................................................................. 38
4.11 Organizational reflection & improvement ..................................................... 39
4.12 Open your whistleblowing line to external world ? ....................................... 40
5 Business and human rights .................................................................................... 41
5.1 Baseline for business and human rights ...................................................... 41
5.2.1 Laws, soft laws, codes of conduct,.. ................................................... 41
II
, 5.1.1 Core labour rights ............................................................................... 41
5.2 UN Guiding Principles on Business and Human Rights ............................... 41
5.2.1 The state duty to protect..................................................................... 42
5.2.2 Corporate responsibility to respect human rights ............................... 42
Business Expectations: ................................................................................ 42
5.3 Need for greater access for victims to remedy ............................................. 43
5.3.1 Case 1: Fatal fire in Bangladesh ........................................................ 43
5.3.2 Case 2: Plastic recycling in Turkey .................................................... 44
III
Ethics, Responsibility and
Sustainability
Summary
MASTER OF BUSINESS ADMINISTRATION
Click to select a major or specialisation
Academic year 2024-2025
,Table of contents
1 Why is this topic so important? ................................................................................. 1
1.1 Introduction ..................................................................................................... 1
1.2 Terminology: Fundaments of ERS ................................................................. 1
1.3 Emergence of a common language................................................................ 3
1.4 Challenges ...................................................................................................... 3
1.4.1 Political impact on sustainability: Trump .............................................. 3
1.4.2 Limits to Growth: The Limits to Growth (1972)..................................... 4
1.4.3 Fundamentals of Sustainable Development: Brundtland Report (1987)
4
1.4.4 Triple Bottom Line (John Elkington: “Is it progress if a cannibal uses a
fork?”) ................................................................................................... 4
1.4.5 GRI (Global Reporting Initiative) .......................................................... 5
1.4.6 Creating Shared Value (CSV) .............................................................. 5
1.4.7 Summary challenges ............................................................................ 5
1.5 Sustainable Development Goals (SDG) and planet boundaries (2023)......... 6
1.6 What are the SDGs, and their ultimate end, that is shared by all stakeholders:
How to create a world where change is sustainable? .................................... 7
1.6.1 The SDGs (Sustainable Development Goals)...................................... 7
1.6.2 The 5 Ps of Sustainable Development ................................................. 8
1.6.3 The Ultimate Shared End Goal ............................................................ 8
1.6.4 Stakeholder Involvement ...................................................................... 9
1.7 SDGs and the Private Sector ......................................................................... 9
1.7.1 A Renewed Pledge to Support the SDGs (2024) ................................. 9
1.7.2 Key Findings from the Sustainable Development Goals Report 2024
10
1.7.3 Wrap-up: Conclusions ........................................................................ 10
2 Why is Business Ethics becoming so important? ................................................... 11
2.1 Relevance ..................................................................................................... 11
2.2 Issues of right or wrong ................................................................................ 12
2.3 Three Western ethical theories..................................................................... 12
2.3.1 Cases ................................................................................................. 12
2.4 Ethical leadership ......................................................................................... 12
2.4.1 Why is ethical leadership important? ................................................. 13
2.5 Personal vs. corporate accountability ........................................................... 13
2.5.1 Milgram experiment ............................................................................ 13
2.5.2 Stanford experiment ........................................................................... 13
2.6 Globalisation: ethics and the law .................................................................. 14
2.6.1 Legal ≠ Ethical .................................................................................... 14
2.7 Ethical decision-making ................................................................................ 14
2.8 Ethics and compliance programs ................................................................. 14
2.9 Key components of Business Ethics Management ...................................... 15
2.10 Code of Conduct (CoC) ................................................................................ 15
2.10.1 Purpose and Scope of the Code ........................................................ 16
2.10.2 Structure and Key Characteristics ...................................................... 16
2.10.3 Preparing a Code of Conduct ............................................................. 16
2.10.4 Distribution and Implementation ......................................................... 17
I
, 2.10.5 The Code as a Tool for Cultural Change ........................................... 17
2.10.6 Reporting and Enforcement ............................................................... 17
2.10.7 Success Factors for an Effective Code .............................................. 17
3 Risk Management & Compliance ........................................................................... 18
3.1 Regulator push ............................................................................................. 18
3.2 Swiss Cheese Model .............................................................................. 18
3.3 Framework to manage risk ........................................................................... 19
3.3.1 Overall flow ......................................................................................... 19
3.3.2 Main Steps in the Risk Management Process ................................... 19
3.4 Three lines of defence model ................................................................. 20
3.4.1 Purpose of the three lines of defence model...................................... 21
3.5 How to Conduct a Risk Analysis ............................................................. 21
3.5.1 Establish the context .......................................................................... 21
3.5.2 Identify the risks ................................................................................. 22
3.5.3 Analyse the risks ................................................................................ 22
3.5.4 Evaluate the risks ............................................................................... 25
3.5.5 Treat the risks ..................................................................................... 25
4 Whistleblowing ........................................................................................................ 27
4.1 Whistleblowing cases ................................................................................... 28
4.1.1 Case Theranos ................................................................................... 28
4.1.2 Case FTX ........................................................................................... 28
4.1.3 Case Allhere education ...................................................................... 28
4.2 Creating a safe environment for staff ........................................................... 29
4.3 A choice among others: reporting channels ................................................. 29
4.4 Is it good to know ? ....................................................................................... 29
4.5 Anonymous reports ? ................................................................................... 30
4.6 Protecting Whistleblowers ............................................................................ 30
4.7 What to do with whistleblowers calls ............................................................ 30
4.7.1 Effective Investigations – The ROI ..................................................... 31
4.7.2 Goals of an Investigation .................................................................... 31
4.8 Understanding the Investigator’s Role.......................................................... 31
4.8.1 Key Qualities of an Effective Investigator ........................................... 31
4.8.2 5 STEPS in the Investigation ............................................................. 31
4.9 Case study : KBR and the Nigerian LNG Contracts ..................................... 32
4.9.1 5-Step Investigation (as Chief Compliance Officer) ........................... 32
4.9.2 Conclusion: What Does It Mean ? ...................................................... 34
4.10 Whistleblower Investigations: From Trigger to Remediation ........................ 35
4.10.1 Investigation triggers .......................................................................... 35
4.10.2 Triage ................................................................................................. 36
4.10.3 Plan and assign .................................................................................. 37
4.10.4 Investigation execution ....................................................................... 38
4.10.5 Remediation and reporting ................................................................. 38
4.11 Organizational reflection & improvement ..................................................... 39
4.12 Open your whistleblowing line to external world ? ....................................... 40
5 Business and human rights .................................................................................... 41
5.1 Baseline for business and human rights ...................................................... 41
5.2.1 Laws, soft laws, codes of conduct,.. ................................................... 41
II
, 5.1.1 Core labour rights ............................................................................... 41
5.2 UN Guiding Principles on Business and Human Rights ............................... 41
5.2.1 The state duty to protect..................................................................... 42
5.2.2 Corporate responsibility to respect human rights ............................... 42
Business Expectations: ................................................................................ 42
5.3 Need for greater access for victims to remedy ............................................. 43
5.3.1 Case 1: Fatal fire in Bangladesh ........................................................ 43
5.3.2 Case 2: Plastic recycling in Turkey .................................................... 44
III
