LACK OF ETHICS: MORALLY WRONG AND COSTS MONEY!
Lack of Ethics is morally wrong but is also poor judgment thus bad business.
Companies with a strong ethical identity tend to maintain a higher degree of stakeholder satisfaction, positively influencing the financial results of the company, according to the Ethical Investment Research Service (www.eiris.org).
Lack of personal and professional ethics can lead to negative financial results, as evidenced by the collapse of Wall Street firms in 2008 or more recently to the Volkswagen scandal. The next to come could be the Insurance sectors where we see excess and greed driving Insurance arbitration refusing to pay claims that are well overdue, the examples are plethora and each of us could provide some. Risky loans and questionable business practices put many banking and insurance firms in a precarious position.
One could have believed that we learned the lesson but NO we continue to see new outrageous behavior. Volkswagen apparently instituted a corporate “cheating” business environment within its upper management to meet economic data and show great results. The financial consequences for the Company, if it survives, will be tremendous in terms of costs and image.
Ensuring ethical behavior at company can help improve company’s economic performance. Businesses small and large must act ethically to protect themselves and their business environments. Otherwise, they pose a threat to their employees, customers and communities. A lack of business ethics endangers the future of a company, jeopardizes the public good and can have many other negative effects on business environment.
Other unethical actions also impact public goodwill in a business environment. For example, companies that put locals in danger by neglecting to follow safe operating procedures risk a public relations disaster, not to mention legal ramifications. Remember Union Carbide in Bhopal, India. Similarly, companies that exploit workers risk negative publicity, even if the customer base lives elsewhere. Public outcries against clothing or shoe companies that rely on sweatshop industries in developing countries exemplify the type of negative publicity that can result from distant unethical behavior.
In our capitalistic society, the economy emphasizes private ownership in a privately controlled economy. Companies exist primarily to make money for their owners and shareholders. Generating a profit is the main goal. Short-term profit tends to be more important than long-term success. Without confidence in management, stakeholders tend to limit investments, negatively affecting growth.
However one key component is the lack and loss of humanity in this business model. Short term views and profit are blinding people and making them loose their sense of Ethics. It is the responsibility of All to react and gratify ethical companies and sanction financially Companies that are not following proper ethics.
*Libra6management, Corp has adopted a Code of Ethics and is forcing all its subsidiaries and companies in which it invests to do the same. Libra6 Management invests in Cleantech, Media, Healthcare and Real Estate