Ethical behaviour, culture and integrity
What the exam tests
You must link ethical behaviour, culture and integrity to governance behaviour, not just to a compliance document. The exam expects you to recognize how the governing body shapes conduct and how culture can be monitored.
Core rules
- Ethical behaviour is conduct consistent with the organization’s values and standards, including honesty, fairness and respect for stakeholders.
- The governing body sets the tone at the top and must model expected conduct; culture is shaped by what leaders reward, tolerate and ignore.
- Integrity means consistency between stated values and decisions, including under pressure.
- Mechanisms include a code of conduct, ethics advice, speak-up channels, investigation processes, incentive alignment and culture monitoring.
- A code alone does not create culture; the governing body should oversee conduct indicators and serious breaches.
- Promotions, sanctions and bonuses are culture signals and should reinforce the stated values.
Worked example
A sales team is praised for hitting targets while an internal report shows mis-selling. Reasoning: if bonuses and leader comments reward the result and no one addresses the conduct, the culture signal is that mis-selling is acceptable. The governing body should require corrective action, review incentives, and monitor conduct metrics alongside sales.
Traps
Equating ethics with legal compliance; assuming a code is sufficient; focusing only on junior staff; ignoring incentive-driven behaviour; treating a speak-up hotline as culture change by itself.