|
Information > Financial Terms > This page Ethics A
branch of philosophy that is the systematic study of reflective choice,
of the standards of right and wrong by which it is to be guided, and of
the goods toward which it may ultimately be directed.
(Philip Wheelwright, A
Critical Introduction to Ethics).
This definition emphasizes deliberate choice, moral principles,
and the consequences of decisions.
In a broad sense, ethical behavior is (1) that which produces a
good instead of an evil or (2) that which conforms to moral principles. The most basic requirement
of any ethical system is rationality.
Rationality implies that what is specified is in conformity with
reason, is nondeceiving (honest and authentic), and is attainable.
An ethical system must be based on reality at the time and under
the existing circumstances, i.e., virtue over vice. The value structure expressed in the system's standards should
indicate the means of achieving the results it promises, and allowances
should be made for diversity (the exception rule). The philosophical
choice to be ethical requires that one be free and that one accept the
responsibilities that freedom bestows.
Adhering to a value system provides continuity (consistent behavior)
and internal controls (self-discipline and personal responsibility).
Major factors influencing ethical behavior include the law, government
regulation, social pressure, industry and company ethical codes, and personal
standards. A distinction can
be made between ethical, professional, and legal conduct.
Ethical conduct implies voluntary behavior or internal dispositions
to act for which the individual can be held responsible to a recognized
standard of right and wrong. Professional
conduct refers to standards of conduct that are normal, expected, or precedented
in a particular profession, such as law or accounting.
Professional standards prescribe the basis upon which professionals
ought to conduct their activities.
In addition, professional standards establish the basis by which
a profession can be explained, interpreted, and judged.
Professional and ethical standards can be distinguished from legal
standards, which are established by the rules, laws, and conventions imposed
by legislative and administrative authorities.
Ethical, professional, and legal standards sometimes overlap. BIBLIOGRAPHY ABA/BNA Lawyer's Manual on Professional
Conduct.
Bureau of National Affairs, Inc., Washington, DC. Looseleaf. BANK
ADMINISTRATION INSTITUTE.
Codes
of Conduct in the Financial Services Industry. Bank
Administration Institute, Rolling Meadows, IL, 1987. CAVANAUGH,
G. F.
American
Business Values.
Prentice Hall, Inc., Englewood Cliffs NJ, 1984. Journal
of Business Ethics. Journal
of Ethics. Marx,
T.G.
Business and Society:
Economic, Moral and Political Foundations.
Prentice Hall, Inc., Englewood Cliffs, NJ, 1985. SEVERINSEN, K.
"Executives Stress the Importance of Business Ethics.,"
Savings
Institutions. THOMPSON,
T.W.
"The Banker Ethic in a Sales Culture."
U.S.
Banker,
August 1987. URANGA, D.
"Navigating the Grey Zone:
Ethics in Credit Management."
Business
Credit, June 1988. |