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Ethical Finance: An Agenda for Consolidation or for Radical Change?

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Author Info
Michael J. Dempsey () (School of Accounting and Finance - Gold Coast Campus)
Abstract

The article considers that conceptual frameworks exist not to portray truth as an absolute, but rather to provide order and guidance to actions and behavior. From such perspective, the article considers that ethical frameworks assist in our attempt to balance the instinct that we have to look out for our own individual welfare with the conscience of obligation that we have to care for a wider community. In this light, the development of ethical frameworks may be interpreted in terms of a process of natural selection with regard to the mutual interdependence of the individual and the community. Thereby, the article argues that corporate and financial ethics do not exist 'to do good', but rather to act reflexively to consolidate and sanction internal activity, with the consequence that the employee is called on to be ethical not on the individual's own terms, but on the profit-motivated terms of the institution. In the end, profit remains as the bottom line. The net outcome is that institutionalized activity may be co-ordinated to function under the banner of ethical codes of practice, while broader ethical issues for the institution as a whole remain suppressed. We illustrate these arguments with reference to the financial ethics of the Grameen Bank of Professor Muhammad Yunus. Notwithstanding, the example holds out the possibility that ethical concerns for the whole of society might ultimately be compatible with the profit motives of our institutionalised society.

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Paper provided by Yale School of Management in its series Yale School of Management Working Papers with number ysm322.

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Date of creation: 06 Dec 2002
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Handle: RePEc:ysm:somwrk:ysm322

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Web page: http://mba.yale.edu/
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Related research
Keywords: ethics ethical finance capitalist systems corporate governance economic systems

Find related papers by JEL classification:
G3 - Financial Economics - - Corporate Finance and Governance
P0 - Economic Systems - - General
P1 - Economic Systems - - Capitalist Systems

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This page was last updated on 2008-7-16.


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