In our lectures, we have spent the last couple of weeks discussing the contemporary issues in financial ethics. The first lecture focused on ethics in regard to professional ethics.
I think it is important to understand the definition ethics to truly understand its subjective nature. Ethics can be simply defined as a set of moral principle which govern a person’s behaviour. Ethics is a topic debated often in the corporate world especially due to scandals which can have devastating effects on a company. A topic which is also discussed frequently, is the implementation of artificial intelligence in corporations, the reason why this can often be a controversial topic is due to the many questioning whether or not it is ethical to implement such technology. I think this largely stems from the fact that technology such as artificial intelligence often replaces the jobs of humans and is often found to be much more efficient for a business. But is it morally correct to replace the job of a human, even if it comes a cost in society?
Large technology companies vary in their response to this and many companies simply expect the public to ‘take their word for it’. Google was recently under public scrutiny in particular, as a result of their decision to develop a censored search engine for China as well as being linked to a US Government artificial intelligence weapon programme. Of course, it is useful to take Google’s motivations into account in order to understand their rationalisation for the decision. It could be argued that Google simply wanted the contract in order to maximise profits and therefore shareholder value. Rationalisations behind ethical decisions, were an aspect I found interesting in lectures as we discussed the most common ethical rationalisation actually stem from our childhood. With the phrase ‘everyone does it’ standing out to myself the most, but just because everyone else does it, doesn’t make it right for you to join in.
Maybe if Google hadn’t discussed the contracts with China or the US then another large technology company would have won the contract and is it a contract which Google can afford to lose out on? I personally think that is an aspect which does not matter, especially in the corporate context. In a world which is much more connected due to social media and innovations in technology the ethics in decision making is an aspect which needs to be prioritised (especially in large corporations) due to the media backlash which follows when a company is viewed as making unethical decisions. This may be because many of the large companies such as Google, pride themselves on their values which are in line with their complex CSR strategies which often juxtapose with their actual corporate decisions, which the public then deem to be hypocritical (and that never goes down well with the public opinion).
We also covered another aspect of financial ethics in the lectures, this was the topic of fraud. This was a topic I also enjoyed learned about as I worked in transactional fraud operations in TSB. Of course, corporate fraud, is far more complex than a fraudster ordering a pizza with the victim’s bank card (which surprisingly was a very common fraudulent transaction) but the lies and deception are the same, nonetheless.
Recent events related to fraud include the trial of top Barclays’ executives for their alleged involvement in payments to Qatar in 2008. There are claims that the group were involved in the payment of £322 million to Qatar. This side agreement was in exchange for the investment of billions of pounds which meant that the bank could escape a UK government bailout in the midst of the financial crisis.
It is quite obvious what the motivations of the Barclays’ top executives, may have been to draft a side agreement with Qatar as the bank clearly needed money injected in to the company. Side agreements are actually quite common, and a memorable example would be the BHS deal. An important factor to note is the fact that the executives are on trial 11 years later. It is clear from the numerous scandals in the media, fraud is very much present in large organisations worldwide and many should be held accountable for their actions (in a timely manner rather than 10 years later). Therefore, I think that the practices, systems and structures related to fraud and financial ethics which are in place to safeguard against reckless decisions, need to ensure that executives and other employees understand the lasting consequences of such decisions.
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