An Examination of Ethics and Governance at SMRT Corporation Ltd Report

This report provides an in-depth analysis of the ethics and governance issues faced by SMRT Corporation Ltd, a prominent multi-modal transport operator in Singapore. The report focuses on the ethical culture, ethical leadership, and ethical climate within the organization, highlighting key problems such as the falsification of records, lack of safety measures, and the tragic consequences of the tunnel flooding incident. The analysis examines arguments both for and against the company's practices, exploring the impact of these ethical failures on stakeholders, including employees and passengers. Recommendations are provided, emphasizing the need for improved training, enhanced audit systems, and strengthened quality control monitoring to foster a more ethical and responsible corporate environment. The report concludes by underscoring the importance of ethical leadership and robust governance in maintaining the company's reputation and ensuring the safety and well-being of all involved.

Running head: ETHICS AND GOVERNANCE
Ethics and governance
Name of student
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Table of Contents
Introduction......................................................................................................................................3
Body.................................................................................................................................................3
Ethical culture..............................................................................................................................4
Ethical leadership.........................................................................................................................5
Ethical climate..............................................................................................................................6
Recommendation.............................................................................................................................8
Conclusion.......................................................................................................................................8
References......................................................................................................................................10

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Introduction
The report discusses the various concepts of ethics and governance at SMRT Corporation
Ltd, which is one of the major multi-modal transport operators in Singapore. The company
serves millions of people by providing the most comprehensive transport networks and assists
them to reach from one place to another with ease and effectiveness. While managing the values
and ethics, the company has faced several problems related to the corporate governance and
ethics. Several arguments will be made considering the ethical culture, ethical climate and ethical
leadership managed within the organization. The report will discuss the major problems faced by
the company such as misinterpretation of records regarding maintenance of transport network,
flooding of the tunnel and even the death the two maintenance staffs due to lack of safety.
According the article presented in Straits Times, SMRT Corporation Ltd cannot comply with the
laws, rules and regulations to maintain the safety of workers, which resulted in unethical
business practices, poor ethical climate and culture (Smrt.com.sg 2018). It can be proved that the
unethical business practices have arisen due to the lack of safety, poor culture and ethical
climate, all of which are related to the cultural issues and challenges within the organization. I
can agree that the concepts of business ethics will explain the systematic cultural issues that may
arise due to lack of ethics and governance within the organization.
Body
The ethics and governance issues were related to the ethical culture, ethical climate and
ethical leadership. The major issues faced by the company included falsification of documents,
lack of safety of transport network that resulted in poor safety regulations and even took the lives
of two workers. Another issue was the flooding of the tunnel, which created problems during the

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transportation management and even made many people suffer while moving from one place to
another. These showed that the business ethics were not maintained properly, which even created
complexities to the culture of the organization (Stevens 2008).
Ethical culture
For
According to Gillies (2012), there are probabilities of falsifying statements and records
though it might not be the actual cause of flooding of tunnel at Bishan. Based on the author’s
responses, the concept of relative likelihood showed that without making any proper assumptions
or proofs, it would be inappropriate to derive a conclusion and state that the falsification of
documents could be the cause of tunnel flooding at the station. The company neglected checking
the water drainage pump systems and not maintenance works were conducted and even there was
no track access approvals that were issued for the staffs (Gillies 1971). Thus, it could be
understood that SMRT might have done this for own benefits because it focused on more
revenue generation. Thus, the focus of the company was on the revenue generation rather than
the safety and convenience of workers and passengers. This, it is proved that the corporate values
and ethics were not properly maintained (Treviño & Brown 2004).
Against
According to SMRT’s CEO Desmond Kuek, there were several cultural issues and one of
the major issues was the falsification of documents where quarterly maintenance on Bishan
MRT’s water pumps was not conducted properly and without the findings only, the records were
submitted. As the maintenance manager and the staffs were not enough responsible to conduct
the findings, they were suspended because of the inaccurate functioning of the pump system. The

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former CEO focused on generating more revenue rather than maintaining the records properly. It
neglected the maintenance of records, which took the lives of two workers and could have
jeopardized the lives of many people (Trevino & Nelson 2006). This not only hindered the
cultural values but also prevented maintenance of corporate ethics properly.
Ethical leadership
For
Other than the falsification of records, there were other issues too such as fake records
and submission to the higher authority without providing any maintenance records of the water
pump system. The entire team who was responsible for maintaining the records was termed as
fake and careless. Though reports were presented that the maintenance had been going on well,
still there was no work progress done for more nearly a year. According to the Executive Ethical
Leadership Reputation Matrix, the ethically silent leaders are considered as moral individuals
who have gained ethical leadership reputation for guiding the employees in the right direction.
The previous CEO was more concerned about the profit level achieved by the company and thus
the safety level was not considered, which not only resulted in the death of a couple of workers
but also hindered the safety of passengers (Friedman 2007).
Against
Based on the various reports, no such track access approvals were found related to the
water pump system maintenance at the concerned station. The team consisting of the
maintenance staffs did not bother to work properly and records had been submitted without
conducting any survey or assessment of the drainage system, which was found to be the major
cause of tunnel flooding. Based n the records, the pumps were not activated as well on the dates

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where it was stated that the team had worked. A leader must be ethical in terms of the corporate
governance and ethics and must hold the various traits like the integrity, trustworthiness and
honesty (Chin, Hambrick and Trevino 2013). The previous manager of SMRT lacked these traits,
due to which decision making was inappropriate and the organizational behaviors were not
managed properly too. An ethical leader should possess a good character, ethical standards and
expectations so that the staffs abide by the organizational policies and rules to ensure successful
business functioning. By maintaining good leadership skills, the manager would gain reputation
and even strive for success in business. According to Desmond Kuek, ethical culture was not
present within the workplace, due to which, the team comprising of the maintenance staffs were
neglecting their roles and responsibilities. This further deteriorated the organizational culture and
hindered the maintenance of corporate values and ethics in business (Hartman & Desjardins
2008).
Ethical climate
Ethical climate means maintaining a moral atmosphere of the work environment and
enabling integrity by the managers of the organization that are considered as core values.
For
It could be stated that after the flooding of tunnel, the transportation facilities broke
down, which created chaos among the passengers. They faced difficulties to move from one
place to another but the company provided some alternative measures to make sure that the
passengers could be safe (Kolk 2016). SMRT provided shuttle buses for the commuters due to
the closure of multiple MRT stations. Until the maintenance work was carried out, shuttle bus
services were provided to ensure that the passengers could reach their destination properly. It

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could be understood that the providing of shuttle bus services tend to be quite effective, because
with the stations closed, many passengers thought that they could not reach their destination
place (Carroll and Buchholtz 2014). The company rather rectified its negligence in work by
providing them shuttle services so that they could at least reach their homes safe and sound. Thus
the cultural values and corporate ethics were maintained, which might have caused high level of
satisfaction and positive mindset among the passengers (Khan, Muttakin and Siddiqui 2013).
Against
It could be argued that the shuttle bus services were not at all effective, because due to
the traffic jams all over the roads, the passengers could not reach their destination on time. The
shuttle buses were fully packed and many people could not even board those, which left them
devastated emotionally. The entire scenario could have been something else, if only the former
CEO of SMRT made decisions ethically by maintaining positive behaviors and through gaining
moral awareness (Ferrell and Fraedrich 2015). The company’s focus should have been on the
delivery of proper services to make travel convenient for the passengers and not about gaining
high level of profit only. Due to the poor organizational culture, the staffs did not perform their
roles and responsibilities properly and the maintenance records were not provided too (Nica
2013). Few of the cultural issues that were pointed out had been not providing rewards to the
employees for their performances, poor organizational structure and culture and lack of training
programs for the employees. Thus, it could be argued over the fact that a proper ethical climate
was not managed, which deteriorated the moral atmosphere of the working environment and
created multiple cultural issues (Crane and Matten 2016). These were not expected from a
reputed organization like SMRT and it showed that the corporate ethics and governance had not
been in place.

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Recommendation
 It is recommended to provide the rail and water maintenance staffs with proper training
sessions, because it is one of the top most priority of the organization to ensure proper
corporate governance and maintenance of values and ethics.
 Investigations should be made at regular intervals with the involvement of an
investigation team to supplement the audit system of SMRT.
 It is also recommended to improve the quality control monitoring to manage the
maintenance of records and handle critical systems with ease.
 The manger must manage ethical training to make the staffs well informed about their
roles and responsibilities and create higher work responsibility ethic among them.
 Paying good amounts of wages and rewards along with praising of their performances
should keep them motivated towards their goals and objectives.
 Corporate social responsibilities hold ethical responsibilities and so the manager must
undertake measures by going beyond legal ethics, though maintaining the organizational
policies at the same time to maintain a behavior that could be morally acceptable to the
different stakeholders in business.
Conclusion
The entire report discussed the concepts of ethics and governance considering the
business organization SMRT Corporation Ltd in Singapore. From the report, information
obtained showed that there were several cultural and ethical issues that deteriorated the
company’s image and reputation. The corporate ethics were not maintained that further
questioned the leadership skills, based on which arguments had been provided. One of the major
issues was the falsification of records and even submission of the maintenance records that

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showed proper functioning of the water pump system. It was later found that the water pump
system was not functional, which flooded the tunnel and even caused the death of two staffs.
Though there were no other harms, still it hindered the safety level of both the staffs and the
passengers. The former CEO was more concerned about revenue generation and the staffs were
not monitored properly, which raised ethical concerns and even resulted in cultural issues. Few
recommendations to resolve these kinds of issues included training provided to the staffs,
investigations to improve the audit system and enhancing the quality control monitoring.

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References
Carroll, A. and Buchholtz, A., 2014. Business and society: Ethics, sustainability, and stakeholder
management. Nelson Education.
Chin, M.K., Hambrick, D.C., and Trevino, L.K. (2013), "Political ideologies of CEOs:
Illustrative evidence of the influence of executive values on corporate social responsibility",
Administrative Science Quarterly
Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
Ferrell, O.C. and Fraedrich, J., 2015. Business ethics: Ethical decision making & cases. Nelson
Education.
Friedman, M 2007, 'The social responsibility of business is to increase its profits', in WC
Zimmerli, M Holzinger & K Richter (eds), Corporate Ethics and Corporate Governance,
Springer Berlin, pp. 173-8.
Gillies, D.A., 1971. A falsifying rule for probability statements. The British Journal for the
Philosophy of Science, 22(3), pp.231-261.
Hartman, LP & Desjardins, J 2008, Business ethics: Decision making for personal integrity &
social responsibility, McGraw-Hill irwin, Boston.
Khan, A., Muttakin, M.B. and Siddiqui, J., 2013. Corporate governance and corporate social
responsibility disclosures: Evidence from an emerging economy. Journal of business
ethics, 114(2), pp.207-223.

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Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business, 51(1), pp.23-34.
Nica, E., 2013. Social Responsibility, Corporate Welfare, and Business
Ethics. Psychosociological Issues in Human Resource Management, 1(1), pp.9-14.
Smrt.com.sg. (2018). SMRT Corporation Ltd. [online] Available at: http://smrt.com.sg/
[Accessed 27 Feb. 2018].
Stevens, B 2008, 'Corporate ethical codes: Effective instruments for influencing behavior',
Journal of Business Ethics, vol. 78, pp. 601-9.
Treviño, LK & Brown, M 2004, 'Managing to be ethical: Debunking five business ethics myths.'
Academy of Management Executive, vol. 18, no. 2, pp. 69-81.
Trevino, LK, & Nelson, K. A. 2006, Managing business ethics: Straight talk about how to do it
right, 4 edn, John Wiley & Sons, New York.

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