ICON PLC BACKGROUND Icon plc is a clothing and homeware retailer, selling its products through retail units throughout the UK and all over the world. Icon plc also sells online, via its own website. Icon plc was established in London in 1908 and is now a globally respected British brand. Icon plcs profits had been suffering for several years from diminishing sales and increasing costs. Since 2012 the group has experienced numerous changes on its Board of Directors. For example, over the past 6 years the group has had five different Finance Directors, three different CEOs and four different Directors of Operations. PAULO Paulo is a junior member of the groups Finance Team. He has been asked to process some property leasing payments in respect of the groups leased retail units in Europe. Paulo notices that nearly all of the groups European retail units are leased from a company called Gregson Holdings. Paulo decides to research this company and he discovers that it is based in the Cayman Islands and owned by an individual called Martin Oswald. The current CEO of Icon plc is called Gerard Oswald. Paulo recalls a brief conversation he had with Gerard at the Christmas party; Gerard was telling Paulo about his family and Paulo is certain Gerard said that one of his sons was named Martin. Paulo decides to speak to the Finance Director, Mel, about this issue. Mel confirms that the company belongs to Gerards son, but she reassures Paulo that everything is transparent and above board. Mel then praises Paulo for coming to speak to her about this issue: "Im glad to see that you are alert and using your initiative, Paulo. Its great. I have a small bonus lined up for you equivalent to a weeks wages. But if you take the bonus then you must agree not to work on leasing payments again and not to try to investigate any further. Dont worry - I will find some much more interesting work for you to do instead." MAX Later that day, Paulo has lunch with a colleague and friend, Max, who works as a customer services manager at Icon plc: Max: I just had an angry customer on the telephone. She was asking me about our companys claim that over 90 per cent of our clothing products are manufactured in the UK. She didnt believe that it was true and was asking me for evidence. I didnt know what to say. Do you know any more details? Paulo: From what I have seen in the Finance Office, I am pretty sure that most of our clothing suppliers are UK-based. However, I have seen a few invoices for a company called SPZ which is based in Ormario Max: SPZ? Are you sure? Paulo: Yes, Im certain. But it must only be a very small percentage of our overall purchases Id guess at less than 10 per cent. Max: But SPZ is one of the companys I researched during my undergraduate degree. I remember discovering that they have poor working conditions and that they dont pay their workers a living wage. Paulo: But the working conditions will be regulated by the government in Ormario, not by us, so it isnt our problem. And the living wage isnt a legal requirement its just an ideal standard. Max seems upset and he excuses himself and says goodbye to Paulo. Paulo wonders whether Max has a point

What ethical issue(s) can you identify in this case study ?

What would you advise Paulo that they ought to do? Justify your answer.