The article, written by Rosemary Peavler, explains us that financial ethics might slow down a small business on a short term, but will most likely promote its growth on the long-term run. The clear short-term management, incorporated by Enron and Lehman Brothers, is one of the causes of the financial crisis.
In our capitalist society companies exist to make money. There’s nothing wrong with this goal, except for when those companies don’t have the necessary patience and start adjusting their books etc.
To succeed on the long term, a company must satisfy all its stakeholders. First of all it must try to maximize the wealth of the stockholder, again on the long term. Trying to maximize the returns or stock price too quickly will inevitably lead to deceiving people, which will hurt the company’s reputation.
Secondly a business must take care of its employees, as they are the backbone of the company. Treating them with honesty and dignity will make them less vulnerable to the urge of mincing the numbers.
A third group of stakeholders, that need to be respected, is the customer base. They will only come back if you don’t try to fool them.
Last but not least a business must fairly treat the society in general, as the company infects them too.
I can only agree with Mrs. Peavler. The crisis has shown us that greed once again took its toll: trying to rush things leaded to an unemployment rate close to 10% in the USA.
http://bizfinance.about.com/od/fraud/a/Financial_Ethics_2.htm
Baptiste De Vleeschauwer
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