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Tone at The Top

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The board of directors and management at all levels must show their commitment to integrity and ethical values through their actions, behavior, decisions, and directives to support internal control in the organization. The formal right tone should be described in the mission and values statements, standards and codes of conduct, policies and practices, and operating principals. The informal right tone may be found in the actions and decisions of management at various levels, communications, and routine actions. To have a good internal control system, the leaders of organization do not have just talk about actions, they must do right ethical actions to motivate their employees follow their ethical behavior. One of the problems that most leaders can face with is that most organizations consist of different people, from different countries, with their own values, norms, and expectations.

For these reasons, it is very important for board of directors and management to establish common ethical values which will be appropriate for each employee in the organization. And then, they should apply training, communications, and control to ensure that all the employees follow those ethical standards.

Standards of conduct

The board of directors and senior management should be unsure that integrity and ethical values are defined in the entity’s standards of conduct and understood by employees as well as by outsourced service providers and business partners. Organizations establish standards of conduct through the creation of a Code of Conduct or other baseline document. It is very important for an organization to define standards of conduct for their employees and other stakeholders. Employees and stakeholders can act according their own norms without those standards and their acts can lead to the wrong ethical behavior.

Adherence and Deviation

There are some processes that can help evaluate the performance of employees as they follow ethical standards or not. The lack of adherence may be caused by different situations such as: a board of directors does not provide appropriate oversight of senior management’s adherence to standards, a weak internal audit function, insignificant penalties for improper conduct, etc. The organization must establish methods to enforce standards and make other measures to prevent the deviation from the standards such as: create a set of indicators to identify issues, consider the straight of leadership in the demonstration of integrity, identify, analyze, and report immediately conduct issues, etc. These deviations of the entity’s expected standards of conduct need to be fixed quickly and consistently. Depending on severity there should be establish appropriate system of punishment: warnings, probation, or termination.

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Tone at the Top. (2019, February 27). GradesFixer. Retrieved May 24, 2022, from
“Tone at the Top.” GradesFixer, 27 Feb. 2019,
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