The role of the audit committee in strengthening business ethics and protecting stakeholders' interests

Abstract

It is imperative for companies to do business ethically and to respect the rights of all the company's stakeholders, while still being accountable to the shareholders. This article examines evidence from a literature and empirical study conducted on the role of audit committees in strengthening business ethics and protecting stakeholders' interests. The study found that the majority of audit committee chairs believe their audit committees to be effective in discharging their responsibilities regarding business ethics. Of concern, however, are the findings that a large number of audit committees are not reviewing compliance with their companies' code of ethics, although most of them are reviewing or providing a channel for whistle-blowing. The inspection of the annual reports further indicated a lack of disclosure by the audit committees on their responsibilities regarding business ethics.

Exploring the governance committee: the trinity’s great forgotten

“…Oyerogba et al (2017) developed a board oversight function index including 14 items related to the remuneration/governance committee function. Further business ethics descriptive studies depict the governance committee as a channel for receiving employee complaints (Lipman, 2007), a reporting authority referenced in the code of ethics of listed companies (Bodolica and Spraggon, 2015) and a board subcommittee that can help the audit committee strengthen business ethics (Marx and Els, 2009).…”

The role of self-leadership in becoming an ethical leader in the South African work context

“…The word ethics is derived from the Greek word ethos or ethikos, which refers to the character of man, as well as man's ability to distinguish right from wrong (Fox, 2010). Ethical leadership has its origin in ethical behaviour or ethics (Marx & Els, 2009 (Fox, 2010).…”

“…Yukl (2002) also linked ethical leadership with exceptional leadership, such as Burns's concept of transformational leadership (1978). Marx and Els (2009) and Fox (2010) did more recent work on ethical leadership. According to Marx and Els (2009), ethical leadership has two elements.…”

“…Marx and Els (2009) and Fox (2010) did more recent work on ethical leadership. According to Marx and Els (2009), ethical leadership has two elements. First, ethical leaders must act and make decisions ethically, as must ethical people in general.…”

“…First, ethical leaders must act and make decisions ethically, as must ethical people in general. Secondly, ethical leaders must also lead ethically -in the ways they treat people in everyday interaction, in their attitudes, in the ways they encourage, and in the directions in which they steer their organisations or institutions or initiatives (Marx & Els, 2009).…”