The easiest, least expensive, and most effective way to reduce information trafficking would be for public companies to be more open and honest with investors and shareholders.
Analysts must assert three essential rights, says the veteran banking analyst: the right to ask for information, the right to get information, and the right to act on information.
The CFA Institute Integrity List is a collection of 50 tangible steps that investment professionals can take to restore trust in the industry. The list was inspired by “real-world” ideas from CFA… READ MORE ›
Tarek El Diwany believes the core value proposition of Islamic Finance is to bring ethics to the center of finance and when this is achieved, everyone stands to gain.
The job of management is to maximize corporate value, which leads CEOs to seek ways to boost their companies’ stock prices. Although generating consistent long-term earnings growth for shareholders would seem the obvious path to reaching that goal, every company will experience difficult times. The question is whether shareholders will regard a down quarter or year as simply a short detour on the overall journey or consider short-run earnings misses significant.
“Even the most rational approach to ethics is defenseless if there isn’t the will to do what is right,” Alexander Solzhenitsyn said. This quote came to mind after reading about widening investigations into insider trading in the U.S. and U.K. governments.
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.”
Who says that one bad apple doesn’t spoil the whole bunch? Just ask FrontPoint Partners who saw its assets under management decline with breathtaking speed—dropping by $6 billion in eight months—after one of the firm’s portfolio managers was caught… READ MORE ›
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