Ethical Concerns That Are Associated With Corporate Finance
Many Ethical Concerns are associated with Corporate finance. Ethical finance is concerned with using corporate funds to conduct business in ways that do not harm human beings or the environment.
Corporate finance practices should conduct in a way that is consistent with the principles of economic justice and fairness.
Specifically, The term “ethical finance” is sometimes used to describe this broader field of finance. Some other forms of ethical concerns in corporate finance include fair trade practices, discrimination against employees and racial and ethnic diversity, and access to financial resources for women and minorities.
Fair Trade Practices in Corporate Finance There have been increasing concerns about why companies do not more thoroughly investigate the supply chains that lead to their products being produce and how they act toward workers who may employ in sweatshops overseas.
- It has created a political fire as President Obama and his administration has taken steps to address these labour practices. The State Department and White House web site have a webpage titled White House Ethical Enforcement Program.
- It is the central agency responsible for regulating compliance by corporations with the Ethical Compliance Act.
- There are many Ethical Finance Considerations for company leadership and staff to keep in mind when making decisions about what types of activities are considered unethical.
Likewise, How an ethically conscious company decides to do business could profoundly affect the community and the world around us.
Are they aware of the impact of their choice of product, service or location? Does your company have plans to expand?
The use of natural resources is another ethical concern for corporate finance. It includes decisions regarding which companies extract resources from the earth and where they will find them. Oil spills are a significant worry these days, as mine.
Corporate leaders should consider working to mitigate environmental harm wherever possible. If they can do so successfully, it can significantly positively affect your company’s profits.
Diversity in Employment Diversity in the workplace is an ethical issue for many people. A moral concern company will take steps to ensure that a diverse workforce is employees by its company.
It will not do business in regions where most employees are white, male and senior executives. Human resources training is one area where such consideration should be given. An organization should strive to recruit employees based on their skills, not their race or gender.
Areas of concerns
There are many other areas of concern for those who are genuinely committed to Ethical Corporate Finance.
For example, some companies choose to refuse to work with financing companies that engage in financial activities that contribute to the furtherance of human rights abuses.
By choosing not to do business with such financiers, the company is supporting these very individuals. Such action is one way in which such companies demonstrate their commitment to Ethical Corporate Finance.
How To Overcome Ethical Concerns That Are Associated With Corporate Finance
Several concerns need to be address for any company to have good ethics and be a strong leader in corporate finance. These include issues that relate to how a company handles fiduciary decisions, whether current laws regarding the protection of shareholders are adequately enforce and the impact that mergers and acquisitions will have on the profitability and future success of the business.
Likewise, Some concerns can relate to the way the company uses its retain assets and what the implications are if those assets were to be use in ways that do not enhance the value of the business.
Specifically, All of these areas require the expertise of an attorney who is well verse in corporate finance law and the areas of ethics. This type of attorney should have a strong background in finance and business and familiarity with mergers and acquisitions.
Accordingly, Fiduciary responsibility is the responsibility of a company’s senior management to decide what steps the business should take to gain profits and minimize its risks. It means that the most significant investment a company makes is in the heads of the people who will make those decisions.
It can spot opportunities and develop plans to capitalize on them that separates a strong company from a weaker one.
A manager’s decision to implement integrity in the business affects the long-term viability of that business.
As well as the credibility of that company’s brand. If integrity is not maintain, a customer or shareholder may eventually lose confidence in the company and its products and services.
Similarly, the company’s perception and its products and services may change, and the company’s perception. May harm the standing of the company in the market place.
The importance of maintaining and protecting integrity extends beyond the company’s assets. Any action that damages the reputation of the company. And its products and services are also hurt the company’s integrity if the company engage in conduct that compromises its integrity. Or if it allows behavior that is inconsistent with its fiduciary duties. It is involve in conduct that constitutes a breach of the corporation’s obligations.
How to overcome such ethical concerns requires the business owner to take responsibility for its actions. And to provide leadership when it comes to the business’s integrity.
The first step is for the senior managers to establish a corporate finance policy that defines what is not permissible. The policy should set forth the company’s expectations of individuals who will handle the implementation.
Specifically, Review and implementation of the guidelines. The next step involves the development of policies to ensure compliance by the company.
These policies can specify the company’s expectations regarding compensation. And benefits for employees and executives who have served the company in a variety of capacities.
They can also determine which types of transactions not be undertake by officers and employees of the company.
Furthermore, they can specify the types of outside income available to the company, including company assets for private purposes. In addition, the financial statement must comprehensively address the issue of the management’s independence. Likewise, This requirement is essential in the area of finance. And should be include as part of the annual financial report.
A company’s ability to manage its finances and meet its internal and external obligations consistently. The integrity of the business will help it to meet its obligations and avoid exposure to risks successfully.
In short, an excellent corporate finance policy can help a company effectively and rationally address a wide variety of ethical. And legal issues that arise in the area of finance. It includes such issues as how to overcome potential conflicts of interest that could occur. Suppose certain decisions are make in favor of one group or another. It is the focus of the present article. We will address some related issues in later articles.