Business Ethics
Business Ethics
Business Ethics
INSTRUCTIONS:
Section (A)
Name: Melissa Faznira Binti Martin Matric No: BB20110185
Section (B)
Article Review:
1. Read the article entitled ‘Ethical Practice Disclosure of Malaysian Public Listed Companies’ by
Ahmad Firdhauz Zainal Abidin, Hafiza Aishah Hashim, Zalailah Salleh and Susela Devi.
2. Review and do a critique on the article with highlights on part of the critique
3. State your conclusion of the article critique and give recommendation(s)
Output: One (1) Essay (3,000 words maximum)
Reminder: Essay must be professionally produced. Referencing is the utmost important. Students are strongly
recommended to read on how to reference sources. Improper referencing will be penalised 20% of total given marks.
A total absence of referencing will result in the slides being rejected. Students are required to upload one softcopy to
the Smart UMS by the due date.
Assessment Rubric:
LOD 6:
Interpersonal Level of Applicability
Skills
Marks
Sub Very Weak Weak Fair Good Very Good
Awarded
Attribute
1-2 3-4 5-6 7-8 9-10
Not able to Independently Able to provide
Able to partially Able to explain
explain a able to explain a explanation of
Problem explain a problem a problem with
problem, even problem clearly problem very
Identification with maximum minimum
with assistance. without clearly and
assistance. assistance.
assistance. accurately.
Able to apply Able to apply new
new idea or idea or knowledge
Able to apply new
Not able to apply knowledge to
Limited ability to idea or knowledge
any new idea or to a given a given problem
Application apply new idea or to a given
knowledge to a problem with and able to
knowledge. problem
given problem. assistance propose
independently.
from lecturer or alternative
student. applications.
Total Marks 20%
Important Notes:
Date of issue: 18.10.2022 Week 1
Date of Submission: 27.12.2022 Week 10
The researchers used a modified Ethical Commitment Index (ECI) to analyze the
annual reports of 1,115 companies over a five-year period (2012-2016), with the goal of
providing insights into the disclosure of ethical practices among Malaysian public
companies. The researchers examine the level of ethical practice disclosure among
Malaysian public listed companies and identifies areas in need of improvement. The
research is based on a sample selection of 223 non-financial firms listed on the main
board of Bursa Malaysia over a five-year period, resulting in a total of 1,115
observations. The sample excludes 52 firms in the banking industry due to their
subjection to separate legislation and accounting practices. Sampling selection is a
straightforward method for selecting samples from large populations, as it involves
using lists of available sample targets. To measure the ethical practice disclosure of
these firms, the researchers used content analysis of annual reports and a modified
version of the Ethical Commitment Index (ECI). The ECI was originally developed by
Choi and Jung as a way to assess the disclosure of corporations' ethical commitments
based on the company's code of ethics and accountability. In this study, the ECI was
expanded to include additional elements such as the Code of Ethics, Whistling
Procedure, Ethics Education, Ethics Commission, and Employee Reviews of
Corporations. Overall, the research employs reliable methods, including a representative
sample and a widely-used index, to provide insights into the ethical practice disclosure
of Malaysian public companies. Based on the methodology used by the authors, it
appears that they were able to obtain reliable sources for their study, specifically from
Bursa Malaysia. As a result, it can be concluded that their methodology is reliable and
not subject to critique.
In the article, the authors report on the results of their study on the level of
disclosure of ethical practices among Malaysian public listed companies. They found
that many companies in Malaysia do not prioritize ethics and do not report on their
ethical practices. However, after analyzing data using the corporate ethics values (CEV)
measure, the authors observed an increase in the number of companies that consider
ethics to be important and include information about them in their reports. Additionally,
the authors found that only 4.48% of companies take disciplinary action against
misconduct, while 95.52% do not. The study also revealed that 40.9% of companies
have a whistleblowing policy and 59.1% do not. In terms of the Code of Ethics (CODE),
61.97% of companies have one, while 38.03% do not. Furthermore, only 8.7% of
companies commented on how their code is communicated to employees. In terms of
sustainability practices, 7.98% of companies include information about them on their
websites, while 92.02% do not. The authors also found that only 6.19% of companies
have an Ethics Committee, while 93.81% do not. Only 1.7% of companies disclosed
information about departments or officers responsible for handling ethics-related issues,
while 98.3% did not. The results suggest that many companies in Malaysia do not
prioritize ethics until there are ethical breaches or scandals, such as the 1MDB case.
However, the increased emphasis on ethics in recent years suggests that companies are
beginning to recognize the importance of ethical practices.
One of the potential issues with the research presented in the article is the relatively
small sample size. The study analyzed data from only 223 public companies listed on
Bursa Malaysia in 2016, which may not be representative of the entire population of
Malaysian public companies. This small sample size could potentially introduce bias
into the results and reduce the accuracy of the data. I suggest that future research in this
area consider using a larger sample size in order to minimize potential bias and increase
the reliability of the findings. While the authors' use of statistical analysis and the
modified Ethical Commitment Index (ECI) are sound methodological approaches, the
limited sample size may still be a weakness in the research. Expanding the sample size
would allow for a more comprehensive understanding of ethical practice disclosure
among Malaysian public companies.
Next, the study is the limited scope of the ethical components analyzed. The current
index used in the research may not adequately capture the full extent of ethical issues
and practices within Malaysian public listed companies. Additionally, the National Anti-
Corruption Plan (NACP) has called for a more comprehensive index to shape a more
ethical corporate culture, suggesting that the current index used in this study may not be
sufficient for this purpose. Furthermore, the ethical values of companies cannot be
accurately represented through numerical data, as ethics is a complex and multifaceted
concept that cannot be easily quantified. The author notes that the data presented in the
study reflects the ethical values of companies, but this may not fully capture the ethical
behavior and practices of these organizations. The data collection approach of the study,
which relies on material analysis of hand-collected information from annual reports,
may also be a limitation. Future research may benefit from exploring the communication
of ethical values through other sources, such as journal and article as well as using
various tools to provide a more nuanced understanding of the ethical behavior and
engagement of organizations. Overall, while this study presents valuable insights into
the ethical practices of Malaysian public listed companies, there may be some
limitations that need to be addressed in order to provide a more comprehensive and
accurate assessment of these practices.
In conclusion, this study has examined the level of ethical practice disclosure
among Malaysian public listed companies, using a sample of 223 firms on the main
board of Bursa Malaysia over a five-year period. The study utilized the Ethical
Engagement Index (EIC) to assess the level of disclosure, and found that many
companies in Malaysia have not traditionally prioritized ethical values in their annual
reports. However, after a series of high-profile unethical conduct cases in the country,
the importance of business ethics has increased and more companies have included
ethics in their reports. This highlights the need for continued efforts to improve ethical
practices in the business sector, and for companies to be more transparent in disclosing
their efforts to promote ethics and prevent unethical behavior. Additionally, the study's
sample size and reliance on material analysis from annual reports may be limitations that
future research should address. By expanding the sample size and exploring additional
sources of information, such as media coverage and employee feedback, future studies
can provide a more comprehensive understanding of the ethical climate in Malaysian
companies and identify areas for improvement. It is clear that there is a need for greater
awareness and prioritization of ethics in the corporate world, not only in Malaysia but
globally. The findings of this study serve as a reminder of the importance of upholding
ethical values in business and the need for continued efforts to promote ethical practices
in the corporate sector. As a result, I'd like to share some of my ideas on the subject. To
address Malaysia's ethical difficulties, offenders' penalties should be increased even
further. Fines and prison term are insufficient. An offender who is unable to pay their
fine or complete their sentence in jail should be harshly punished. As a result of this
policy, corporate employees can no longer commit ethical infractions. The CEO and
other top executives are responsible for the next step in the chain of command. Top
management should set a good example and serve as a role model for their employees.
When managers assist and motivate their people, ethical issues in the workplace may be
avoided. Employees must be constantly supervised and scrutinized by senior
management to ensure that they are performing their duties honestly and transparently.
REFERENCES
Firdhauz Zainul Abidin, A., Aishah Hashim, H., Salleh, Z., & Devi, S. (2019). Ethical
Practice Disclosure of Malaysian Public Listed Companies. KnE Social Sciences.
https://doi.org/10.18502/kss.v3i22.5119