Financial firms serve a number of stakeholders. But do they serve them equally? Can they? Should they? Robert Jenkins, adjunct professor of finance at London Business School and a governor of the CFA Institute, explores how boards are ranking various stakeholders in light of the recent financial crisis.
CFA Institute CEO John Rogers, CFA, is urging financial professionals to make their industry “a means to an end, rather than an end unto itself.”
“Tone at the top” is a mantra that we hear time and again as the cure for the ethical decay that is permeating financial organizations. But if the industry really wants to create a culture of integrity, it must also establish a “tone at the middle.”
Many institutions involved in the financial skullduggery that caused the 2008 crisis had adopted codes of ethics long before the housing bubble burst. Even Enron had espoused lofty ideals in it's official code. So why aren’t codes effective in deterring unethical behavior?
The recent scandal that led Swiss National Bank chairman Philipp Hildebrand to resign highlights the difference between what is legal and what is ethical. The law tells us what we “can and cannot do,” whereas ethics tells us what we “should and should not do.”
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