Behavioural Ethics and the Next Generation in Finance
5th edition (2014/2015)
Ethics / Scandals
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As a young professional working in finance, I believe it is important to try and be a positive force for change. We can challenge corruption. We can do things differently. However, this cannot be achieved unless we are enabled, unless we remain free from corruption. How can we become and remain ethical decision-makers? Behavioural ethics is an innovative field that can help answer that question. This paper applies those concepts to a variety of examples, from LIBOR to Madoff to Enron, in order to understand the pressures faced by young professionals in finance and consider how we can use this knowledge to enable more young people to become ambassadors for ethical decision-making.
What is behavioural ethics?
Behavioural ethics is the examination of “individual behaviour that is subject to or judged according to generally accepted moral norms of behaviour” (Treviño, Weaver & Reynolds, 2006, p. 952). It considers how individuals really make decisions when faced with ethical dilemmas. This requires us to do much more than consider individuals as rational actors (Tenbrunsel & Messick, 1999); it involves a close examination of the full range of emotional and social influences on moral behaviours (Zhong, 2011).