Law and Ethics

Law and Ethics

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Law and Ethics

In this modern day and age, law and ethics play an essential role in the development and ongoing success of any business; in fact, there is an apparent relationship between the two concepts. According to Reed, Pagattaro, Cahoy, Shedd, & Morehead (2015), ” Society’s ethical values may become law through legislation or court decisions, and obedience to law is often viewed as being ethically correct.” However, there are differences to note between the two concepts. Thus it is imperative to differentiate between law and ethics, understand how they both affect business, and identify the importance of alternative dispute resolution.

How Laws or Regulations Affect Current Job

In the financial industry, there are specific regulations that are essential to the everyday running of the business. Cayman National Bank (CNB) is one of the leading financial institutions in the Cayman Islands, and the governing body for this and other institutions in the Cayman Islands Monetary Authority (CIMA). CIMA is the regulatory agency that oversees the overall running of all banks on the island and sees to it that they are all in compliance with the relevant laws of the jurisdiction. Due to the stigma and negative publicity placed on international banks, especially in the Caribbean, CIMA sets out to dispel the negativity and conduct a through consistent monitoring. According to Jizi, Salama, Dixon, & Stratling (2014), because poorly managed banks can create a negative impact on society, it is necessary for corporate governance and social responsibility to take effect and restore public confidence (p. 601). The regulations set out by CIMA consists of monthly to annual audits of KYC due diligence for clients as well as a review of the different policies and procedures created by CNB’s Compliance Department for proper risk assessment.

How Ethical Rules Affect Current Job and Why Ethics are an Asset

In the banking industry, it is crucial to develop and maintain good ethical rules and standards. CNB prides itself on keeping proper social responsibility to its employees and customers alike. Therefore, regular reviews of the bank’s policies and procedures, risk assessments, and honest financial reporting are critical to ethics in banking. Gordon & Zaring (2017) states ” Banking ethics are also meant to manage customer relationships, as well as address serious public relations problems that have bedeviled both the banking industry and its supervisors” (p. 562). As such, part of Cayman National Bank ethical and social responsibly, it publishes quarterly reports, on its website, so that its customers may have access to see how well the bank is performing, financially. Ethics are an asset to CNB because it allows its current and potential clients to develop trust and confidence in this institution, and assists in maintaining its integrity.

Various Types of Alternative Dispute Resolution Used in the Workplace

Alternative Dispute Resolution is a different form of a method used to mediate in a dispute opposed to using litigation due to the costs incurred. According to Reed, Pagattaro, Cahoy, Shedd, & Morehead (2015), ” It also is the reason most businesses try to avoid litigation and use it as a means of last resort to resolve disputes” (p. 119). In light of this fact, there are at least four different types of ADR systems available such as mediation, negotiated settlement, focus groups, and arbitration. A proceeding conducted in court usually involves conflict between individuals due to criminal conduct, civil disputes, etc. However, individuals and businesses alike are turning to ADRs and moving away from litigation to avoid the additional expenses that this method can create.

Mediation

In federal courts, mediation has become one of the most popular or preferred forms of ADR systems used. According to Reed, Pagattaro, Cahoy, Shedd, & Morehead (2015), “Mediation is the process by which a third person, called a mediator, attempts to assist disputing parties in resolving their differences” (p. 144). As such, the mediator will not enforce a solution between the disputing parties; however, he or she assists as an independent individual who has no interest in the proceedings or matter at hand. Sometimes courts require the mediation process to take place before deciding on going through with litigation.

Negotiated Settlement

Negotiations are standard in helping to settle disputes between parties. This method often consists of persuading another individual to do something or cooperate with another party without resorting to litigation. Every individual or business engage in negotiations of some sort from time-to-time as a part of life, especially when it comes to sales. There are two types of agreements such as positional bargaining and principal, interest-based negotiations. Positional bargaining consists of a competitive style in which parties state their expectations, while principal, interest-based negotiations comprised of seven elements such as communication, relationship, interest, options, legitimacy, alternatives, and commitment (Pagattaro, Cahoy, Shedd, & Morehead, 2015).

Focus Groups

This type of ADR is similar to having a jury in an actual trial or litigation. According to Pagattaro, Cahoy, Shedd, & Morehead (2015), Lawyers often utilize focus groups as mock jurors to assist in providing a good insight into the success or failure of the outcome of a case. In doing so, the test trial will allow parties involved in the dispute, to come to a standard agreement or meaningful negotiation (p. 127).

Arbitration

Arbitration is another method of ADR in which a third party (arbitrator) who is neutral and disinterested in the outcome of the dispute, would make the final decision and bring forth a resolution. Businesses often use this method as a swift way to resolve a conflict. In fact, it saves courts from full records.

Methods of ADR that Cayman National Bank uses from time-to-time are negotiation settlements and mediation. There have been past instances where disgruntled employees have of other divisions have threatened to sue for being dismissed, wrongfully for various reasons, and in some cases negotiation settlements occurred. Alternatively, mediations were essential in resolving hte conflict between employees, especially in a tort situation. However, in the past, there has been litigation due to the nature of conflicts with dishonest employees.

Conclusion

Overall, law and ethics play an essential role in the daily operations and successes of the business; therefore, noting the differences between both concepts and considering the different alternative dispute resolutions before engaging in litigation, can save the industry a lot of hardship in the long run.

References

B Reed, O.L., Pagattaro, M.A., Cahoy, D.R., Shedd, P.J., & Morehead, J.W. (2015). The legal and regulatory environment of business (17th ed.). New York, NY: McGraw-Hill.

Gordon, G., & Zaring, D. (2017). Ethical bankers. The Journal of Corporation Law, 42(3), 559.Cancel

Jizi, M. I., Salama, A., Dixon, R., & Stratling, R. (2014). Corporate governance and corporate social responsibility disclosure: Evidence from the US banking sector. Journal of Business Ethics, 125(4), 601-615. http://dx.doi.org.contentproxy.phoenix.edu/10.1007/s10551-013-1929-2

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