The recent attempts to align executive interests with that of the shareholders have been important stepping stones in the ultimate goal of assuring ethical behaviour. A survey by KPMG in 2005 found that bonus payments to executives had risen faster, but were hardly ever linked to long term strategy of the company and shareholder value. There should be a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration packages of individual directors. No director should be involved in deciding his or her own remuneration, albeit remuneration committee as formed by Megatron directors. Businesses today need to be ethical in the way they operate.
This creates a problem in that morality impedes on the good because to be moral means to make appropriate sacrifices. What a person wants in life is not always going to be the best choice and thus a person has to give up certain things that he or she wanted for the ultimate good. Morality relies on the ability to make proper decisions, to distinguish between right and wrong, and to understand the subliminal consequences of one’s actions. In a piece known as “Spring and Autumn Annals” composed by Dong Zhongshu, it is mentioned how the term humaneness refers to ‘others,’ while the terms rightness refers to the ‘self’ (De Bary, 1999). As has been previously defined, rightness refers to a realm of morality and thus one can conclude that there is a certain amount of ‘self’ present in
The only standards against the practices of a company that may be considered are his. There can be no common framework to resolve moral disputes or to reach agreement on ethical issues among members of different companies. Moral relativism is attractive to many philosophers and sociologists, because it seems to offer the best explanation of the variability of moral belief. It also offers a plausible way to explain how ethics is part of the world as described by modern science. Although the natural world is ultimately composed of nothing, say the relativistic ethics always has a basis in human feelings.
There are cases in which the investor (shareholder, customer, etc.) selects a consultant who has not the ability to understand his needs and he is not deliver his requirements, this could be happen because of the investor has lack of information or disinformation, hence, insiders have private information about exogenous variables which is not well known to all interrelated business partners, this asymmetric information category is known as adverse selection. There are also cases in which company's insiders deliberately mislead their clients-investors for their own interest. In that case the interests of both sides are conflicted and eventually the one with better information wins, this case is called moral hazard. (Baker W. 2010) These two aforementioned concepts of the moral hazard and adverse selection, cause the asymmetric information and agency gap.
The first categories is CEO remunerations packages is not containing any terms of incentives have 16% from high growth company and also the same for low growth. For the second categories which are the incentive payment given to the CEO maybe from time to time have 14% form high growth and 6% from low growth. For the categories of cash salary combined with cash bonus plus an equity based component is included in the CEO remuneration have 50% for high growth and 48% for low growth. Next is the remunerations for the CEO have cash salary plus bonus with no equity based component have 8% from high growth and low growth. Categories that the remuneration includes cash salary plus equity based with no bonus have 10% for both groups.
An ethical dilemma is a problem deprived of an adequate resolution. The consequence of ethical decision-making rests in the fact that very different ethical issues regarding the same moral dilemmas can be made, resulting in neither a “right nor wrong” decision. Ethics involves doing “good” and causing no harm. Yet how one expresses what is ethical can differ from nurse to nurse. Educating nurses on the principles of nursing ethics give them the appropriate tools to base ethical decisions upon.
2. Evaluate your chosen company’s cash & incentive compensation policy from society’s perspective. Justify your answer. (7 marks) The four companies from the above table have the different cash and incentive compensation policies. For example, pay for performance, assessment, overtime rate, allowances, contribution to employee provident fund, pension scheme, bonus, and stock option scheme.
In proposing the remuneration policy, the remuneration committee should ensure that the mix of fixed and variable pay, in cash, shares and other elements, meets the company’s needs and strategic objectives. Incentives should be based on targets that are stretching, verifiable and relevant. The remunerations committee should satisfy itself as to the accuracy of recorded performance measures that govern vesting of incentives. Risk-based monitoring of bonus pools and long-term incentives should be exercised to ensure that remuneration policies do not encourage behavior contrary to the company’s risk management strategy. ( King lll Report principle 2.25 par 151
I think that moral responsibility depends on the scale of free will of a person and his attitude to the actions of other persons. In other words, our behaviour is the result of both our heredity and nature, and some outside factors which depend on our relation to other persons’
Both, the magnitude of a potential harm and the probability of its manifestation are difficult to measure. A hazard with a large possible harm and a low likelihood of occurrence, is often regarded as similar to one with a low potential harm and a high probability of occurrence. Although in theory both might be comparable in priority, in practice it can be far more difficult to manage a large harm if it occurs. Moreover, in relation to GM crops the potential risks are severe and the potential harmful results, like cancer and liver and kidney disruptions, could often not been undone. My conclusion is that although risk assessment could be an alternative for the use of the precautionary principle, it does not take away its disadvantages.