Reference no: EM133043985

Question - SNA Limited (hereafter referred to as "SNA") is a wholesaler of stationery with 20 branches across South Africa. The company is listed on the Johannesburg Stock Exchange (JSE) and has been profitable since its incorporation in 1988. SNA is thinking about expanding its operations to the rest of Southern Africa. They hired external consultants to do a viability study (an in-depth study that tries to determine how profitable a business idea is). They are also planning to give a percentage of their profit to local communities in the towns where they are planning to expand to. The board declares full compliance with The King IV Report on Corporate Governance in its annual reports.

Ms. Danette Lehman was the founder of SNA and has served as the chairperson of the board since its incorporation. She believes that ethics is extremely important in a company and that ethics must be ingrained into the identity, purpose and goals of SNA. Ethics is at the core of every decision and the company actively strives to prevent and confront unethical behaviour. Ms. Lehman and the board implemented a risk assessment process that must be conducted every two years. An aspirational code of ethics has been adopted by the company and is continually being upgraded following the completion of the risk assessment process.

Mr. Ted Molubedi is a director of SNA with an extensive background in retail stores. SNA appreciates his creativity and inputs with the day-to-day operations of the company. He was recently accused of harassment following an incident involving a junior female employee who alleged that he called her daily, making improper remarks regarding her appearance. There are no policies in place to deal with sexual harassment and the whole incident was swept under the rug even though whispers could be heard in the corridors. Two weeks later, the female employee was fired and the reason supplied was cited as incompetence.

Required -

Question 1: Describe the mode of ethics management that is currently prevalent in SNA and give reasons for your answer.

Question 2: Why do you think that SNA decided on an aspirational code as opposed to a directional code?

Question 3: Identify the key ethics risks and ethics opportunities that exist in SNA.

Question 4: Discuss whether trust in a business is needed by applying it to the incident involving the junior female employee.