Business Ethics 2015

1. Business Ethics 2015 Lynn E. Lawrence, CMSgt(ret), USAF, CPOT, ABOC, COA

2. Objectives • What is Ethics • What is Business Ethics • Why are Ethics important • The Benefits for a Code of Ethics • Recommended items for a Code of Ethics • How to establish Ethics within an Org • How to evaluate ethics Within Your Org • Ethics Enforcement

3. Invest Words: June 15, 2015 • The examination of the variety of problems that can arise from the business environment, and how employees, management, and the corporation can deal with them ethically. Problems such as fiduciary responsibility, corporatesocial responsibility, corporate governance, shareholder relations, insider trading, bribery and discrimination are examined in business ethics. investorwords@investorwords.com

4. Statement of Ethical Care • Every profession needs standards and guidelines to steer the environment for their daily operations, providing clear guidance for those operating under a perspective authority and skill set and nowhere is this more essential than in the medical industry. Working within the medical field is an honor and demands competence and integrity toward guidelines can literally lead to a matter of life or death. The ophthalmology and optometry professions are regulated by a number of government, state, and professional agencies, and compliance to the myriad of rules protects the environment in which we deliver daily care to our patients. Performance in this industry requires more than following the words on paper; it requires true compassion for those we under our care. The moral guidelines established in ethics are a critical aspect for optimal performance for every individual working within the healthy medical community. People come to medical professionals because of a personal needs, and they trust the training and ethical behavior of the medical personnel to provide them with the highest level care possible. Patients are vulnerable and at the mercy of the medical professionals they encounter, therefore, patients trust and believe that their medical professionals will make ethical decisions that are in their best interest. Vigilance towards ethics will keep every medical professional doing the right thing, protecting those we serve.

5. First Written Code of Ethics • JC Penny’s 1913: • Serve the public… to its complete satisfaction • Expect…fair remuneration for service… • …pack the customer’s dollar full of value, quality, and satisfaction • To improve the human factor in our business • …reward men/women in org thru participation in what the organization produces.. • Continue to train…services will be more intelligent… • …test our policy, methods, and acts to do what is right and just

6. Article by: Pamela J. Miller • Five Ways To Break The Law In Your Practice: • Theft: recording cash payments • State board regulation compliance • Waiving deductibles and co-pays • Bait and switch, guarantees • Failure to pay appropriate taxes http://optometrytimes.modernmedicine.com/optometrytimes/news/top-5-ways-you-break-law-your-practice?page=0,0&utm_campaign=OD%20Newsflash%20Enewsletter&utm_source=hs_email&utm_medium=email&utm_content=23763460&_hsenc=p2ANqtz-_MWTUkiA_0RqECBG5m3oxAjQ4iZSUSt6rNw4eT8Xeulv9Yb7423LWdmNqHEBuFp_FW1R1GE4yrUL8WH__Mt13sMarTBw&_hsmi=23763460

7. Quote • Corporate governance is concerned with holding the balance between economic and social goals and between individual and communal goals. The corporate governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship of those resources. The aim is to align as nearly as possible the interest of individuals, corporations and society. Sir Adrian Cadbury 2000

8. Surveys State: Many corporate ethics and compliance programs rely heavily on a code of ethics and a telephone hotline or other formal reporting mechanisms to control employee behavior. This study suggests, however, that these two mechanisms are the least effective influences on ethical behavior and executive leaderships’ attention to ethics has the greatest impact on controlling employees’ unethical conduct. Furthermore, the mere existence of a formal mechanism by which ethical wrongdoing can be reported is not to encourage such reporting if the behavior of the management and the corporate culture do not support and encourage its use

9. Scandal Quote [These] high-profile acts of deception have shaken people’s trust. Too many corporations seem disconnected from the values of our country. These scandals have hurt the reputation of many good and honest companies. They have hurt the stock market. And worst of all, they are hurting millions of people who depend on the integrity of businesses for their livelihood and their retirement, for their peace of mind and their financial well-being. President George W. Bush (The Guardian 2002)

10. Business Ethics According to US Federal Reserve Chairman Alan Greenspan (2002), ‘infectious greed’ had simply ‘gripped the business community’. According to market and social trend analyst Daniel Yankelovich (2003), the public’s widespread cynicism toward businesses today is the third wave of public mistrust about corporations in the past 90 years. The first, set-off by the Great Depression, continued until World War II; the second, caused in part by economic stagnation and the Vietnam War…

11. What Are Ethics? According to Lamb et al. (2004), ethics refers to the ‘moral principles or values that generally govern the conduct of an individual or a group’

12. 2nd Definition • “Behaviors, actions, and reasoning that affect people and their welfare”. Ethics deal with the “shoulds” of life – that is the rules and values that determine the goals and actions people should follow when dealing with other human beings. Every decision has an ethical consequence.

13. Business Ethics • Relates to vision of leadership and org culture • More than a legal standard • Explicitly states what is acceptable and what is not • Draws a line in the sand on individual rights vs org rights • Provide sanctions for sub- standard behaviors… enforces a living document

14. Organizational View: 4 Statements • Values statement: org guiding principles • Corporate Credo: org beliefs and responsibilities to stakeholders • Code of Ethics: detailed statement of org policies • Internet Privacy policy: org internet transactions privacy policy

15. Seven Core Values of Ethical Leaders • Honesty = responsibility to act truthful always • Integrity = act with honor decisions reflect the vision and standards of the company • Loyalty = avoid deals that benefit self-interest • Responsibility = fulfills assigned duties and actions are transparent • Fairness = teat others in fair respectful manner • Citizenship = expected to act on behalf of the environment and community • Justice = unbiased and good faith interactions

16. Scenario • London—A locum or fill-in optometrist has been charged with manslaughter by gross negligence after a young patient died following a routine exam. • Honey Rose, BsC, 34, was charged after she failed to diagnose 8-year-old Vincent Barker with a papilloedema. According to the Daily Mail, Dr. Rose was working a shift in a Boots—a chain of ophthalmic and dispensing optician stores in England—in Ipswich in February 2012 when she performed an eye examination on Barker. • Barker died at home on July 13, 2013, after reportedly falling ill at school. Prosecutors allege that Rose should have seen that Barker’s optic nerve was swelling during the examination. http://optometrytimes.modernmedicine.com/optometrytimes/news/british-optometrist-charged-negligent-manslaughter?utm_campaign=OD+Newsflash+Enewsletter&utm_source=hs_email&utm_medium=email&utm_content=22371372&_hsenc=p2ANqtz-83xooUovv49OdKYz5TcOpFHcxHaCQyZGNQt3nwf4XlGRsrKagSbx2T0LLo8f9-u9mBg_LL_vHH5aGySCxwlYbXAlBAYQ&_hsmi=22371372

17. Hosmer’s Model of trust It all starts here! LaRue Tone Hosmer, “Strategic planning as If Ethics Mattered”, Strategic Management Journal 15 (1994): 29

19. Quote The ultimate measure of a man or women is not where he or she stands in moments of comfort, but where he or she stands at times of challenge and controversy Martin Luther King Jr.

20. Ethical Considerations in the Ophthalmic Industry • Reimbursements are going down, the cost of healthcare is going up, what should we do? • Challenges such as on-line competitors are threatening to affect my profession, what do I do? • The need to increase volume is escalating, what should I do? • Volume over safety? Is training and safety necessary?

21. Sample: Meaningful Use • Meaningful Use implementation: • Is it necessary? • How am I going to do this correctly? • Who is responsible for this requirement?

22. Other Laws • HIPAA • Self policing • Self-sanctioning • OSHA • Drinks at the front desk $7k fine • 2012 Violence in the Workplace Training • Medical Fraud and Compliance • Filing insurance

23. Work Culture • Inspires • Threatens • Polarizes • Unites • Criticizes • Rewards • Encourages • Depresses

24. Stakeholders • Corporate Social Responsibility • Which stakeholders are most important? • Power, legitimacy, and urgency • Stakeholder expectations • 3 areas of reporting 3BL, the triple bottom line (people, planet, profit)

25. Current News 09/30/15 • Schumer cites $300 as the average price for glasses and says the average American is now struggling to afford the price. He says current regulations limit competition because they do not require eyecare providers (ECPs) to provide complete prescriptions to patients or to verify prescription information to third-party dispensers and that this omission can limit consumer choice and lead to higher prices. Schumer believes that consumers should have the ability to shop around in search of a more affordable price and not be limited to the eyeglasses offered in the store where they get their eye exam.

26. Cont… • “Eyeglasses are a necessity for millions of Americans, yet sky-high prices are making them unaffordable,” he says. “We need more oversight when it comes to the cost of eyeglasses, and one way to do that is to require patients get their full prescriptions so they can shop around in stores and online for the best deal. Consumers need more options when it comes to eyeglasses and that's why the FTC should update the 'Eyeglass Rule' in a way that helps spur competition and dramatically lower prices.” http://optometrytimes.modernmedicine.com/optometrytimes/news/senator-calls-changes-eyewear-regulations?utm_campaign=OD+Newsflash+Enewsletter&utm_source=hs_email&utm_medium=email&utm_content=22454938&_hsenc=p2ANqtz--FQdhuhx_uKsKn1kPxmrfdfaBHkRNMb7UHzGVRQdLbuscRSzAWxrOz3SOsMvjI029cl2885MGEiYIyr-w7HQptEm2LSg&_hsmi=22454938

27. Schumer’s proposed changes • Schumer is pushing for the following changes to the FTC Eyeglass Rule: • Require ECPs to provide complete eyeglass prescription information to patients, including specifics like pupillary distance • Require ECPs to verify prescription information for third-party sellers in a reasonable time, “allowing a consumer to take their prescription wherever they desire with the confidence of getting the right eyeglasses at the right price” • Require eyeglasses prescriptions to last longer than one year, “so consumers have more time to comparison shop” When government engages in medicine, things get really confusing, there is no mention of insurance or payment for services, he is very near sighted

28. Corporate Social Responsibility • Be a good citizen • Philanthropic responsibilities • Be ethical • Ethical responsibilities • Obey the law • Legal responsibilities • Be profitable • Financial responsibilities Learn to get a good balance in your organization

29. Customers Important factors: • The overall process … Quality is key… • Fees, sales and quotes • Referrals (follow-ups), own the process from start to finish • Customer Service (could be the make or break for a return visit)

30. Suppliers • Must be in strict compliance with the law • Must have respect for the competition • No perceived “conflict of interest”

31. Community Interest • Corporate, legal, discretion • Competitive advantage • Social responsibility to conduct business in a professional manner • Treat customers as your favorite family members • Marketing cost is significantly reduced through word of mouth • Ex: Selling of illegal contacts

32. Government • Self-policing policies • Sanctioning programs • Compliance programs • HIPAA • OSHA • Workplace Violence 2012 • Infection Control • Medical Fraud • Audits • Fines • Prison A law is not a suggestion!

33. Government Cont… • Government requirements • Fundamental rules are agreed upon from central authorities • Law represents minimal standards • Sets rules for accountability

34. Reputation • Reflects the extent that people see your business as good or bad • Can add value to your business • Everyday customer decisions are based on reputation • Friends, neighbors, and colleagues… experts • Your decisions reflect on you and the company

35. Reputation Cont… • Referral to you is based on reputation • Message on strategy, culture, and values to stakeholders • Aids in attracting highly skilled employees • Greater demands for products and services • High emp turnover is bad

36. Sunshine Act • Sunshine Act - opened payment program - rebates, benefits, drug reps, address to see how much has been charge , no more free lunches, donuts. Send Diane Drake an email to determine how much each provider has gotten for perks $10/$100 per person/ event per year

37. Informed Consents • Informed consents are all the facts: purpose, what, when, how, potential risks and benefits. Negligence if not given. Need a witness. Appelbaum 2007 legal right. Alzheimer's, dementia, mental instabilityPOA for medical decisionsChildren - under 18 check state requirements • Literacy test

38. Informed Consents cont… • beneficence- for the benefit of othersnon-maleficence- do no harm - do goodHippocratic oath Thomas InmanGood Samaritan Laws by states

39. Spectacles • The Prescription Release RuleBackgroundBeginning in 1978, when the Federal Trade Commission action known as Eyeglasses I was concluded, the subject of prescription release has been widely discussed among opticians, optometrists and ophthalmologists. The Prescription Release Rule protects the interests of eyewear consumers by requiring eye doctors (both optometrists and ophthalmologists) to give the patient an eyeglasses prescription automatically at the conclusion of an examination (assuming the patient needs eyeglasses). The Rule was vigorously opposed by the American Optometric Association, but the Opticians Association of America fought for the Rule and in 1980, the U.S. District Court of Appeals for the District of Columbia upheld OAA's position and the Prescription Release Rule became law. Despite the Rule, however, many eye doctors have refused to give the patient a prescription unless the patient requested it specifically, and often the doctor has placed intimidating and unnecessary warnings or waivers of responsibility on the prescription. Many patients have been required to request the prescription in writing. •  Violator Pays $10,000 PenaltyConcluding the first case alleging violation of the Prescription Release Rule, a Dallas, TX, optometric practice has agreed to pay a $10,000 civil penalty to settle FTC charges that they failed to provide many patients with a copy of their eyeglass prescription after an eye examination and that they unlawfully included on their prescription form a waiver of liability as to accuracy. In addition to paying the penalty, the practice is permanently barred from future violations of the prescription Release Rule and must train its employees in the Rule's requirements. The practice must also make regular reports to FTC which will monitor future compliance.

40. Cont… • Prescription Defined A prescription as defined by the FTC Trade Regulation Rule (CFR 456) is: "...the written specifications for ophthalmic lenses which are derived from an eye examination. The prescription shall contain all of the information necessary to permit the buyer to obtain the necessary ophthalmic goods from the seller of his choice. In the case of a prescription for contact lenses, the refractionist must include in the prescription only those measurements and directions which would be included in a prescription for spectacle lenses. All prescriptions shall include all the information specified by state law, if any." Prescription Release and Disclaimer Rules The Prescription Release Rule mandates the release of the prescription to the patient and prohibits disclaimers or extra fees for the prescription. It is an unfair act or practice for an ophthalmologist or optometrist to: "a. Fail to provide to the patient one copy of the patient's prescription immediately after the eye examination is completed. Provided: An ophthalmologist or optometrist may refuse to give the patient a copy of the patient's prescription until the patient has paid for the eye examination, but only if that ophthalmologist or optometrist would have required immediate payment from that patient had the examination revealed that no ophthalmic goods were required; "b. Condition the availability of an eye examination to any person on a requirement that the patient agree to purchase any ophthalmic goods from the ophthalmologist or optometrist; "c. Charge the patient any fee in addition to the ophthalmologist's or optometrist's examination fee as a condition to releasing the prescription to the patient. Provided: An ophthalmologist or optometrist may charge an additional fee for verifying ophthalmic goods dispensed by another seller when the additional fee is imposed at the time the verification is performed, or "d. Place on the prescription, or require the patient to sign, or deliver to the patient, a form or notice waiving or disclaiming the liability or responsibility of the ophthalmologist or optometrist for the accuracy of the eye examination or the accuracy of the ophthalmic goods and services dispensed by another seller." OAA encourages all state societies and their members to institute programs to acquaint the public with the existence and requirements of the Prescription Release Rule. The Rule was passed to assure consumers full access to the eyewear market and its variety of eyewear providers. It is important that consumers know they have a right to their prescriptions and the freedom to choose where to have them filled.

41. The Fairness To Contact Lens Act  • The Act gives consumers certain rights, including increasing their ability to choose where to shop and the right to have a copy of their own contact lens prescription. It also imposed certain responsibilities on lens prescribers and sellers, and required the Federal Trade Commission to develop and enforce implementing rules, which it did in July 2004. The Act extended to contact lens wearers rights similar to those enjoyed by eyeglass wearers for 25 years before the adoption of the Act, especially in relation to ensuing competition in the market. The Act reduced barriers to retail competition, driving down prices for consumers (and improving ocular health because consumers are more apt to replace lenses more frequently).[

42. Not Everyone is Here To Help • All help is not good help. If the help is going to make things better, allow it, if you are not sure, you need further research. • If things are already bad, do not add fuel to the fire

43. Leadership • Leadership styles govern the effectiveness of the organization, and ethics is often times the major factor. Can the employee trust his or her employer?

44. Leadership • Leadership in an organization is a key factor. A leader without good leadership skills can cost a company its bottom line profits

45. Leadership • Ethical leadership confirms an organization’s commitment to an ethical environment for its employees. As leaders embrace a positive ethical climate, this gives employees a reason to want to come to work and to be as productive as they can. This positive influence proves to be successful to the bottom line, in such that employees have less layoffs, less accidents, better products, better attitudes, better beliefs, and better customer service

46. Leadership Types • Leaders lead by example • The more objective you are, the effective you are • Immoral Leader • Amoral Leader • Moral Leader

47. Lead By Example • Knows their role • Sees the “Big Picture” • Trusted agent and guardian of the company • Leader of people • Protects all the stakeholders

48. Leadership on Audit Oversight • Set expectations on quality • Review all internal controls • Ensure mgt involvement • Ensure open communications • Transparency throughout the organization • Record/report deficiencies

49. Immoral Leader • Does not care how his/her actions affect the stakeholders • Nothing counterintuitive to what is the right thing to do • Focused on own goals • Legal requirements are barriers that are ignored • Manages self-interest • Conceal their actions • Employees are just a means of production • Misleads customers

50. Amoral Leadership • One that is ethically neutral, no focus on ethical issues • Purposely does not go against the social norms • Ethical issues are not contemplated is decision making • Shares only what is legal • Motivate employees, but only to produce more