According to (Collins 2009) business ethics (often referred as corporate ethics) is a type of useful integrities or proficient principles which scrutinize decent ideologies as well as ethical or moral issues that emanate in a given business environment. Business ethics apply to every aspect of company demeanor and are pertinent to the behavior of people as well as entire firm. Such business ethics come from individual personnel, corporation statements or even from the nation’s legal scheme. This paper will discuss the concept of business ethics in the light of a select business, New York Life Insurance Company (NYLIC), which according to statistics is the leading mutual life-insurance firm in America, and one of the principal life insurers globally. Since its inception in 1845, NYLIC has been depicted both positive and negative ethical aspects which will be highlighted in this report. In addition, an analysis of how “ethical” is the business practices of the company are will be conducted by applying at least four relevant ethical theories.
The Board of Directors in New York Life Insurance Company identifies its accountability to offer efficient corporate administration oversight of the entire Corporation’s affairs. So, the Board of Directors has implemented corporate administration strategies tailored to aid it in the exoneration of its core responsibilities and accountabilities. In addition, these particular strategies are not proposed to alter any relevant rule or directive, the By-laws or Deed of the Business or the Rules and Regulations of the Board. Such strategies are bound to be modified once in a while by the responsible Board of Directors (Anonymous 2016).
Moreover, New York Life Insurance Company has initiated an EthicsPoint; a self-regulating firm which delivers an inclusive and anonymous Internet-and phone-based mechanism used for recording deception, misbehavior, as well as other immoral actions in the company’s workplaces. In addition, the Corporation established an ethics hotline; a web- and phone-tailored communications device which provided every employee and representatives with a confidential approach of reporting defilements of the Business’s Code of Conduct, and alleged unlawful or unprincipled actions. Every report is taken seriously. In short, New York Life is dedicated to the uppermost echelons of uprightness and hence the institution of an ethics hotline is an additional mechanism meant to aid them realizes this objective (EthicsPoint, Inc. 2017).
Besides, New York Life Investment Management Holdings LLC (“often abbreviated as NYLIM Holdings”) has issued a Code of Ethics (“Code”) tailored to lay out explicit procedures and processes which endorse principled activities and demeanor by every staff of NYLIM Holdings as well as its divisions and affiliates. The “Code” is furthermore envisioned to make sure that all Personnel of NYLIM observe the Federal Securities Laws. This particular Code of Ethics also provides every Member with detailed direction regarding individual security investments and the accountabilities connected to that undertaking. NYLIM is entrusted with the assets of our Clients for investment purposes. It as well calls for NYLIM Employees to position the interests of the Company’s clienteles before theirs and circumvent even the presence of a conflict of interest. Individuals bound by this Code of Ethics are expected to follow this overall prevailing principle and conform to the Code’s precise provisions and this way, the firm can gain and keep the trust of their Clients (New York Life Investment Management Holdings LLC 2005).
Recently, Max New York Life Insurance has initiated an ad movement called ‘Aapke Sachche Advisor’ meant to transform customers’ discernment of a sector severely stained by widespread mis-selling. This ad solitary substantiates admittance of guilt and frantic determinations to overcome many years of misdemeanors. The Company has released a Television Commercial (TVC) about mis-selling. In this strategy, New York Life Insurance is attempting to show that the Company is an inordinate client-oriented establishment applying ethical representatives, since what the ad actually does is to amenably disclose the nuisance of mis-selling. The movement is basically beseeching television watchers to have trust on representatives and that Max New York Life is righteous. The fundamental communication as well tells the general public that mis-selling shall never transpire from them again in the future (Govindaraj 2012).
In a multiplicity stroke, Dawson sued New York Life Insurance Company claiming that it defamed and insulted him in various speeches by three of their staffs in videoed extracts of the speeches circulated to its general workplaces all over the USA, as well as in an Amended Form U-5 manuscript filed with the National Association of Securities Dealers (“NASD”) (Justia USA Law 1995).
The purported derogatory speeches were made in March 1993, immediately after New York Life underwent a $16 million dollar judgment in a court case called as Hernandez vs New York Life. This particular case rose from actions of scam executed by the previous New York Life agent Oscar Herrera against a policyholder, a time when he was a representative in Company’s Corpus Christi office (Justia USA Law 1995).
In the company’s Complaints Board, one of the clients Ramesh expresses his grievances elucidating his horrible experience with New York Life Insurance. According to him, the organization lacks credibility when he was disallowed for a top-up opportunity on what the company said was “on-medical-grounds” for a “good-for-nothing” outdated policy. He also says that the company’s agents failed to give him his medicinal account for a year deliberately to make it unacceptable. No corporation is supposed to contrivance with clients’ medicinal account and keep us them in darkness since according to Ramesh, this is an illegitimate business practice (ComplaintsBoard.com 2016).
Moreover, Daniel in the Complaints Board confirms that the New York Life Insurance was involved in several fraudulent activities. In some cases, the organization could not offer salaries to their employees and instead compelled them to recompense for their compartment, phone line as well as usage of technology when selling insurance policies. According to the complainant, this was a rip-off activity which denied employees their rights of compensation (ComplaintsBoard.com 2016).
Utilitarianism ethical theory: Utilitarianism is a moral philosophy that asserts that the best act is the one which make best use of utility. Jeremy Bentham, the core originator of this ethical theory, defined utility as the summation of every pleasure which falls out from an act, less the anguish of any person who participated in the action (Barbara MacKinnon; Andrew Fiala 2017). According to utilitarianism theory, actions should be selected based on their probable results and the agents should comply with the regulations that maximize utility. In the case of New York Life action of initiating the Code of Ethics (“Code”) to safeguard the rights of shareholders, it is evident that the company’s practices were in agreement with the requirements of this theory. The “Code” could help in maximizing returns while at the same time ensuring transparency.
Deontology ethical theory: This is a normative moral situation which judges the morality of a given act based on the set rules and regulations. It is occasionally labeled as “obligation-” or “duty-” or “rule-” founded principles, since rules “bind one to his or her duty (Hooker 2012).” The Board of Directors in New York Life Insurance Company are bound by rules in their duties and responsibilities. In this case it apparent that there is a source of value; reasonableness and the reverence for reason. For example, all executives comprehend that dishonesty is off beam since the notion of everybody lying is inconsistent, henceforth incredible, and hence cannot be willed.
Virtue ethics: Are normative moral models that give emphasis to virtues of character and mind. Virtue ethicists talk over the nature and meaning of qualities plus other connected problems (Stephen Mark Gardiner 2005). For instance, New York Life understands that upon establishing virtues, it is important to prove them valid. With this in their agenda, the company initiates the ad campaign Aapke Sachche Advisor’ meant to change clients’ perspicacity of an industry harshly discolored by extensive mis-selling.
Contractarianism ethical theory: according to this theory by Thomas Hobbes, organizations should select the kind of social arrangements they should adopt. He suggests that institutions should adopt a form of social configuration that is fair, transparent, and open to all and sundry (Dittmer 2010 ). Ideally, New York Life is incentivized by this motive to launch an ethics hotline to connect and even gather feedback from their clients.
Conclusion
It is clear from the discussion in this report that business ethics is a subjective terminology. Nonetheless, it is easy for one to recognize unethical business practices in any given establishment. Our company of consideration, New York Life is a living testimony that the moment ethical strategies are adhered to, trust is developed among various parties such as the employees and administration, as well as the public. So, business ethics contributes to a more productive workplace. Every corporation ought to have its ethical principles and procedures, and following them has more benefits than one can contemplate.
Anonymous 2016, NEW YORK LIFE INSURANCE COMPANY BOARD OF DIRECTORS CORPORATE GOVERNANCE GUIDELINES, viewed 24 July 2017, <https://www.newyorklife.com/content/dam/nyl-cms-dotcom/pdfs/nyl-internet/file-types/Corporate-Governance-Guidelines.pdf>.
Barbara MacKinnon; Andrew Fiala 2017, Ethics : theory and contemporary issues, Boston, MA, Cenegage.
Collins, D 2009, Essentials of business ethics : creating an organization of high integrity and superior performance, John Wiley & Sons, Hoboken, N.J.
ComplaintsBoard.com 2016, ‘Max New York Life Insurance’, 24 July 2016, viewed 24 July 2017, <https://www.complaintsboard.com/complaints/max-new-york-life-insurance-c255213.html>.
Dittmer, JP 2010 , Rawlsian Ethical Act Contractarianism, University of Missouri–Columbia, University of Missouri–Columbia.
EthicsPoint, Inc. 2017, New York life Ethics Hotline, viewed 24 July 2017, <https://secure.ethicspoint.com/domain/media/en/gui/23192/faq.html>.
Govindaraj, A 2012, ‘Max New York Life ad shows off its ethics but will it turn into a self-parody?’, 2012.
Hooker, B 2012, Developing deontology : new essays in ethical theory, Wiley, Blackwell, Malden, MA.
Justia USA Law 1995, Dawson v. New York Life Ins. Co., 901 F. Supp. 1362 (N.D. Ill. 1995).
New York Life Investment Management Holdings LLC 2005, ‘CODE OF ETHICS OF NEW YORK LIFE INVESTMENT MANAGEMENT’, viewed 24 July 2017, <https://www.sec.gov/Archives/edgar/data/1026708/000119312507081873/dex99pv.htm>.
Stephen Mark Gardiner 2005, Virtue ethics, old and new, Cornell University, Ithaca, N.Y.
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