LECTURE NOTES: MANAGERS' INTERESTS AND BUSINESS ETHICS I. Managers' Interests and Risks • Managers have distinct interests differing from shareholders. • Managers don't face property loss risks; their job security is at stake if the company fails. • Their objective is often aligned with higher risk-taking for company gains. II. Ethical Challenges and Solutions A. Potential Abuses by Managers • Managers may misuse their power. • Risk of conflicts between managers' interests and company's well-being. B. Ethics as a Solution • Ethical principles as a remedy to the conflicts. • Legal norms are insufficient to address all managerial actions. III. Business Ethics Principles for Managers • Recommendations for ethical conduct by managers: A. Responsible Authority • Avoid abusing managerial authority. • Prevent intentional harm to company shareholders. B. Timely Risk Reporting • Promptly inform the board of directors about potential losses. • Fostering transparency and proactive risk management. C. Implementing Ethical Standards • Incorporate ethical rules set by the board of directors. • Align managerial actions with company's ethical guidelines. D. Diligent and Transparent Performance • Execute duties conscientiously and proactively. • Maintain accountability to the board of directors. E. Compliance and Respect for Laws • Adhere to legislation, company bylaws, and internal documents. • Encourage compliance within the company. F. Consideration for Employees • Uphold employee interests and ensure fair working conditions. IV. Ethics in Entrepreneurial Principles • Ethics based on respect and consideration for all employees. • Recommendations for interaction between the board of directors, management, and employees. V. General Principles of Interaction A. Priority of Company and Employee Interests • Company and employee interests take precedence. • Cooperation built on shared goals, respect, and mutual interests. B. Collaborative Approach • Partnership based on shared objectives. • Honesty, commitment, and social partnership as fundamental principles.