After shame; before corporate moral obligation (CMO): ethical lag and the credit crisis

The global financial crisis brought down some of the world's largest and most well-established financial institutions. In an area of business activity where tradition and trust are said to count for much, astonishing levels of open criminality, venality, and willingness to exploit weak regulatory structures were brought to light by the financial crisis. This paper is a paraenetic comment on that crisis. It is an exhortation to better business practices, a recognition that the crisis was brought about because the old sanctions of shame and regulation failed to deter unethical behaviour. The paper reviews some of the reasons for this and introduces the idea of corporate moral obligation (CMO) as an alternative ethic. We suggest that CMO better captures a universal commitment to unwavering values than does the more utilitarian approach of weighing the interests of various stakeholders, many of whom lack the power to secure what is their rightful due. In commending CMO, we do not aim to anticipate every objection but rather to encourage consideration of one possible way of overcoming the ethical lag exposed by the global credit crisis.