If I were to introduce the term “Insider Trading” to an audience during a financial ethics keynote speech, most of the audience would understand what I am talking about. However, as a financial ethics keynote speaker, financial ethics consultant and author, I am frequently surprised when financial people know so little about codes of ethics in finance in general.
What are the core principles of financial ethics?
Whether you are a CFO, accountant, banker, financial advisor or involved in any other aspect of finance you may, at first glance, feel my question is simplistic or perhaps condescending. Unfortunately, the COVID-19 pandemic yielded much more than virtual meetings and (eventually) hybrid workplaces.
In my role as an ethics keynote speaker, consultant and author, I had the task of tracking (and frequently counseling and talking to audiences) who had staff members enmeshed in numerous frauds and scandals. The pandemic was no holiday from financial fraud, and in fact, 2020 to 2022 has seen massive financial abuse of the system across all industries. Whether banking, fiduciaries (some so-called), accounting, brokerage and on and on, financial fraud has often been astronomical.
In case there is any confusion, the core principles include:
- The avoidance of conflicts of interest, and not blurring the line between personal and corporate relationships. If there are any doubts, chances are it is wrong.
- No matter the financial dealing, always acting with trustworthiness and honor. The law takes a dim view of dishonesty and clouding transparency.
- Acting within the law in its broadest application.
- Being factual in all things. Again, if in doubt that there is any muddying of a financial issue, chances are there is no ethical doubt. The obfuscation of facts is a denunciation, if you will, to the core of financial values of ethics.
- Having the highest respect for client, corporate or shareholder confidentiality. This point extends to lax or non-existent internet use or abuse. “Not knowing,” is no excuse.
- Acting dutifully and in moral trust. This point extends to the improper sharing of client information in any setting. Unfortunately, I have observed privileged client financial details tossed about at dinner parties and trade shows. Such an abuse reflects more on the idle gossiper than the third party.
- Being a cheerleader for good ethics among work associates and conversely, eschewing abuses when an associate shares poor ethics.
- Ensuring there is a code of financial ethics in place, and that it is shared – and reinforced.
- Knowing that any decision resulting in a poor financial ethics choice will result in a consequence.
It applies to everyone
In answer to the question of “What are the core principles of financial ethics?” understand that it applicable to the entire corporate entity. The CEO and CFO are every bit as liable as the accounting intern.
Financial ethics and its core principles are not luxuries nor reserved for some and not for others. This is why financial ethics training is so necessary and not an option. In my role as a financial ethics speaker, I do not discriminate in my comments by job title. There are good financial ethics decisions and poor decisions. Everyone in the company is liable and everyone in the company can – and should be – a whistle blower.
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