CEA Decision-Making Frameworks & Integrity Standards 3 — Questions and Answers
Question 1: A compliance officer discovers that a profitable but borderline-legal practice has been tolerated for years. The MOST ethically sound first step is to:
- Continue the practice since it has never been formally challenged
- Immediately shut down the practice without notifying leadership
- Assess the practice against current legal standards, company values, and stakeholder impact (Correct answer)
- Transfer responsibility to the legal department and take no further action
Correct answer: Assess the practice against current legal standards, company values, and stakeholder impact
Ethical decision-making requires a structured assessment against legal, organizational, and stakeholder criteria before acting.
Question 2: In Kohlberg's model of moral development, an employee who follows ethical rules only to avoid punishment is operating at which level?
- Post-conventional
- Conventional
- Pre-conventional (Correct answer)
- Principled
Correct answer: Pre-conventional
The pre-conventional level is characterized by self-interest and fear of punishment rather than internalized values.
Question 3: Which integrity standard requires that an employee disclose a personal financial interest in a vendor contract before the contract decision is made?
- Non-retaliation policy
- Conflict of interest disclosure (Correct answer)
- Anti-bribery certification
- Whistleblower protection
Correct answer: Conflict of interest disclosure
Conflict of interest disclosure standards require employees to proactively reveal personal interests that could improperly influence their decisions.
Question 4: The 'three-legged stool' model of business ethics holds that sustainable ethical behavior requires alignment among:
- Legal compliance, profit maximization, and public relations
- Values, systems, and individual behavior (Correct answer)
- Leadership approval, peer consensus, and legal review
- Mission statement, annual report, and board oversight
Correct answer: Values, systems, and individual behavior
The three-legged stool model identifies values, organizational systems, and individual behavior as the mutually reinforcing pillars of ethical culture.
Question 5: A manager routinely bends expense-reporting rules for favored employees while enforcing them strictly for others. This behavior MOST directly undermines which integrity standard?
- Consistency and fairness in policy enforcement (Correct answer)
- Confidentiality of financial data
- Compliance with anti-money-laundering laws
- Intellectual property protection
Correct answer: Consistency and fairness in policy enforcement
Selective enforcement of policies undermines consistency and fairness, which are core integrity standards in ethical management.
Question 6: Which of the following is an example of 'ethical fading,' a key concept in behavioral ethics?
- An employee reads the code of ethics annually
- A salesperson stops recognizing the ethical dimensions of a decision because financial goals dominate thinking (Correct answer)
- A manager reports misconduct after discovering it during an audit
- A board votes unanimously to adopt a new ethics policy
Correct answer: A salesperson stops recognizing the ethical dimensions of a decision because financial goals dominate thinking
Ethical fading occurs when the moral dimensions of a decision fade from awareness, often replaced by financial or competitive framing.
Question 7: According to the Josephson Institute's Six Pillars of Character, which pillar requires honoring commitments even when it is costly or inconvenient?
- Respect
- Responsibility
- Trustworthiness (Correct answer)
- Citizenship
Correct answer: Trustworthiness
Trustworthiness includes keeping promises and honoring commitments regardless of personal cost, making it foundational to integrity.
CEA Decision-Making Frameworks & Integrity Standards 3
A compliance officer discovers that a profitable but borderline-legal practice has been tolerated for years.
The MOST ethically sound first step is to: