1.3 Explain why the following can assist with the setting of an ethical tone in a company:
• a new directors’ induction programme,
• a conflict of interest register for directors and
• annual declarations of directors’ shareholdings and board membership.
1. A new directors' induction programme: This can assist with setting an ethical tone in a company by ensuring that new directors are well-educated about the company's values, policies, and expectations from the beginning. By providing comprehensive training on ethical standards and guidelines, new directors can better understand their role in upholding ethical practices within the company.
2. A conflict of interest register for directors: This can assist with setting an ethical tone in a company by promoting transparency and accountability among directors. By requiring directors to disclose any potential conflicts of interest, the company can prevent unethical behavior and ensure that decisions are made in the best interest of the company and its stakeholders.
3. Annual declarations of directors' shareholdings and board memberships: This can assist with setting an ethical tone in a company by promoting integrity and honesty among directors. By requiring directors to disclose their shareholdings and other board memberships on an annual basis, the company can prevent insider trading, conflicts of interest, and other unethical practices. This transparency can help build trust with stakeholders and demonstrate the company's commitment to ethical behavior.