Reader: Future CFO
Ethics and morality in the workplace are important subjects CFOs need to address.
We take a look at the latest articles on the matter
FINANCIAL DATA IS WORSE OFF THAN A DECADE AGO
HAVE EXECUTIVES LOST THEIR SENSE OF PURPOSE?
SHOULD BUSINESSES CARE IF THEY ARE CONSIDERED TO BE ETHICAL OR MORAL?
Financial data is worse off than a decade ago
With the rise of smartphones and social media, much has changed since the last financial crisis hit in 2008 – we are now far more reliant on instant information than we ever were. But Roger Aitken’s Forbes article cautions that financial data is “worse off” than it was a decade ago. Citing a study by Comprend and Lundquist, which tracks how transparent communication is between large European companies and their shareholders, Aitken demonstrates that the transparency of financial information is far inferior to what it was in 2007.
The article raises questions about what this lack of transparency potentially means for society in an era dominated by scandals such as the Panama and Paradise papers, where executive pay has gone up while average salaries have fallen.
Joakim Lundquist, founder and managing director of Comprend and Lundquist, thinks this lack of transparency “should be an element of greater concern” and believes not enough is being done to address the matter. “The credibility of the financial markets goes hand in hand with the commitment of companies to provide high-quality and transparent first-hand information to regain trust in the market place,” he says.
Although the study showed 90 per cent of financial stakeholders wanted companies to present their financial targets online, only 25 per cent of companies did so.
Have executives lost their sense of purpose?
Examining whether companies and governments are preparing properly for the future, BlackRock CEO Larry Fink thinks what is missing is a sense of purpose
Many governments, Fink writes in his annual letter, are failing to prepare for the future in nearly every area, from retirement and infrastructure to automation and worker retraining. Where governments have failed, the private sector is increasingly being relied upon to take up the slack and deal with the challenges that face society.
There is also a general demand that companies as well as governments serve a social purpose. Writes Fink: "To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society."
Fink warns that both the public and private sectors have a big responsibility to deal with the issues that society faces, from inequality to climate change. Besides, he stresses, without this sense of purpose, companies will not achieve their full potential anyway.
Should businesses care if they are considered to be ethical or moral?
Bruce Weinstein writes in Forbes about whether there is a difference between ethics and morality in business, asking people on LinkedIn for their reactions. The majority (76 per cent) of respondents said there was, the general consensus among them being that ethics were a set of rules and guidelines imposed as a code of conduct, whereas morals came from within.
“In practical terms, if you use both ‘ethics’ and ‘morality’ in conversation, the people you are speaking with will probably take issue with how you are using these terms, even if they believe they are distinct in some way,” Weinstein says. He avoids using the word “ethics” in speeches, claiming the word can “strike fear into the heart of the listener, because it is usually linked with the word violation.”
So should businesses be ethical or moral? Weinstein suggests that instead of wasting time worrying about what the words themselves mean, businesses would be better off thinking about what their meanings have in common and act positively on them – actions, as the saying goes, speaking louder than words.