Resisting Corporate Corruption teaches business ethics in a manner very different from the philosophical and legal frameworks that dominate graduate schools. The book offers twenty-eight case studies and nine essays that cover a full range of business practice, controls and ethics issues. The essays discuss the nature of sound financial controls, root causes of the Financial Crisis, and the evolving nature of whistleblower protections. The cases are framed to instruct students in early identification of ethics problems and how (...) to work such issues within corporate organizations. They also provide would-be whistleblowers with instruction on the challenges they’d face, plus information on the legal protections, and outside supports available should they embark on that course. Some of the cases illustrate how ‘The Young are the Most Vulnerable,’ i.e. short service employees are most at risk of being sacrificed by an unethical firm. Other cases show the ethical dilemmas facing well-known CEOs and the alternatives they can employ to better combine ethical conduct and sound business strategy. Through these case studies, students should emerge with a practical toolkit that better enables them to follow their moral compass. Finally, the cases provide an in depth look at how a corporation becomes progressively corrupted (Enron), how the Financial Crisis was rooted in ethical decay at institutions as diverse as Countrywide, Goldman Sacks, Citigroup, Fannie Mae and Moody’s, and at the ethical challenges that persist in the post-Crisis, post-Dodd-Frank environment. (shrink)

It is of practical significance to introduce the Internet of Things technology into the financial service industry and find the driving factors and mechanisms of financial innovation to accelerate the promotion of financial innovation. This article starts from the perspective of banks and other supply chain financial institutions, takes mainstream trading products in the commodity trading market as the research object, uses the LA-VAR model, and fully considers the market price fluctuations and liquidity factors of (...) supply chain financial inventory products. It analyzes the theoretical basis of the continuous innovation of rural financial products. On the basis of analyzing the basic characteristics and types of rural financial product innovation, we explore the connotation of sustainable innovation of rural financial products, clarify the evaluation criteria, and lay a theoretical foundation for continuous dynamic evaluation. Based on technical innovation evaluation theoretical models such as Schumpeter’s innovation model, technical specifications-technological track model, and NR relationship model market, we analyze the innovation elements of rural financial products from the external and internal aspects of innovation and discuss the relationship between the factors. The interaction mechanism of rural financial products has established a dynamic mechanism model for the continuous innovation of rural financial products. A fuzzy comprehensive evaluation was made on the continuous innovation power of financial service industry products in a certain area. Using a combination of remote surveys and on-site visits, a questionnaire survey was conducted on financial service industry institutions in a certain region’s financial system. Each survey object was required to conduct 120 × 1067 index comparisons and use the data after processing the arithmetic average Matlab carries out the objective processing of programming. The results show that the LA-VAR model with liquidity indicators can measure the liquidity risk well and more comprehensively evaluate the risk of the inventory pledge financing model. According to the index weights determined by AHP, the development of the financial service industry will be promoted in a targeted manner from the internal construction of financial institutions and the optimization of the external innovation environment. (shrink)

Our study considers the governance, ethics and operational challenges associated with the acquisition, manipulation and commodification of ‘big data’ in the financial services sector. To the best of our knowledge, there are no published studies describing empirical research undertaken within companies in this sector to understand how they are responding to such challenges: our field-based research is a significant initial contribution in this respect. We describe the results of a micro-ethnographic study undertaken in a small-to-medium-sized company developing disruptive, (...) technology-related platforms and services in the banking and retail sectors based on big data and associated analytics: these are used to derive commercially valuable insights from personal customer data in exchange for cash back and targeted rewards. The company was found to employ a multi-level innovation governance approach, underpinned by an ethical strategy based on a principle of mutual benefit. Opt-in and informed consent for using data for specific purposes was supported by principles of data minimisation and anonymisation, with unrestricted use of secondary, anonymised and aggregated data to develop insights. Governance, which included contextual data protection legislation, payment-card industry data usage standards and internal corporate controls, presented as bespoke organisational practices relating to data security and privacy. These in total set the governance and ethics frame for big data innovation at the company within which it has had to be both adaptive and responsive under conditions of normative and regulatory uncertainty. (shrink)

In modern conditions the questions of personnel management, including motivation, acquire new meaning. Particularly given the problems relevant to the service sector, where at the beginning of the XXI century employing more than 60% of the workforce in developed countries. These circumstances determine the need for a modern concept of material and immaterial motivation of service industries. Such factors determine the need for the development modern concept of material and immaterial motivation of service industries staff. To obtain indicated objective during (...) research analyzed the existing concepts and paradigm of staff motivation with highlighting their advantages and disadvantages. The results obtained allowed to establish that scientific and expert community does not have the unified approach to the classification and identification of the most effective ones. Special attention is given to modern developments and approaches to the motivation problem. This fact caused the structure of follow studies, including three interlinked vectors: analysis of the essential content of the fundamental concepts in the field of staff motivation; defining features of employee motivation at the enterprises sphere of services; introduction to the key successful international practices which apply by service companies. In general, the results obtained enabled the author’s model of the modern concept of material and non-material motivation at the enterprises the service sector and the corresponding mechanism for the implementation. (shrink)

Recent studies :98–144, 2002; Weismann, J Bus Ethics 88:615–66, 2009) revealed that in the first 28 years of its existence, the Foreign Corrupt Practices Act was not enforced by the federal government. The Weismann study further concluded that the FCPA, designed by Congress as a self-regulatory model of corporate governance, failed to achieve the regulatory goal of deterring global bribery by U.S. companies. The current article addresses the reasons that the FCPA remains an ineffective measure to control bribery as (...) a global market entry strategy despite the highly publicized 2006 Department of Justice initiative to increase prosecutions and tighten enforcement efforts. The failure arises out of both the increased use of informal dispositions of case prosecutions,, which has made “getting caught” merely an increased “cost of doing business” and the failure to close the regulatory gaps in the statute that permit violators to slip through the enforcement net. The article updates and compiles the case prosecution data for every reported case prosecuted between 1977 and 2011. That data are then compared to the results of a 2010 integrity risk survey performed by Deloitte Financial Advisory Services and Forbes which reveal a widely held global business perception that compliance and integrity risks appear to be rising sharply and that the FCPA is ineffective in deterring bribery and corruption in foreign markets. The article aims to serve as a predictive tool for policy makers and business professionals in assessing risk in the global markets, particularly as commerce intensifies in the BRIC countries, notable for bribery and corruption. (shrink)

An increasing number of financial services (FS) companies are adopting solutions driven by artificial intelligence (AI) to gain operational efficiencies, derive strategic insights, and improve customer engagement. However, the rate of adoption has been low, in part due to the apprehension around its complexity and self-learning capability, which makes auditability a challenge in a highly regulated industry. There is limited literature on how FS companies can implement the governance and controls specific to AI-driven solutions. AI auditing cannot (...) be performed in a vacuum; the risks are not confined to the algorithm itself, but rather permeates the entire organization. Using the risk of unfairness as an example, this paper will introduce the overarching governance strategy and control framework to address the practical challenges in mitigating risks AI introduces. With regulatory implications and industry use cases, this framework will enable leaders to innovate with confidence. (shrink)

Willingness and readiness of people to do their jobs are among the key factors of a successful enterprise. In XXI century intellectual human labour is gaining unprecedented value and is being developed actively. The demand for intellectual labour calls forth an increasing number of jobs and professions that require an extensive preparation, a large number of working places, high level of integration of joint human efforts, growth of social welfare. These trends are becoming ever more pervasive and are spreading widely (...) in service industries, and that explains the rapid development of the latter when compared to the traditional areas of human activity. In its turn, it heightens the need for staff in service companies, supported by significant personnel turnover and a certain shortage of skilled professionals. These circumstances determine the need for developing a new concept of fostering staff motivation at the enterprises in the sphere of services. In order to reach the stated purpose while conducting our research into tourism and hospitality industry, as well as retail chains, we have examined the problems that arise in the process of staff motivation, and studied the foreign practice of motivating staff in hotels. The obtained analysis results enabled us to work out practical recommendations on improvement of the mechanism of tangible and intangible rewards in service companies, which are based on external and internal motivational factors. Additional attention in the article is paid to the statement that financial incentives should be based on key performance indicators (KPI). We give a detailed consideration to the classification of internal motivation incentives of the staff according to the terms of their realization, and give a schematic representation of the performance dynamics of the internal motivation model in service businesses. (shrink)

This case study details how and why integrating storytelling, empathy, and inclusive practice shifted QSuper, a large Australian finance organisation, from minimal awareness to moral awareness then moral capability in the delivery of services to Indigenous customers. During the Royal Commission into Misconduct in the Banking, Superannuation, and Financial Services Industry, QSuper were recognised for their exemplary service with Indigenous customers (Hayne, Interim report: Royal commission into misconduct in the banking, superannuation and financial services (...) industry, Volume 1. Commonwealth of Australia, 2018; _Transcript of Proceedings, 13 August_, Commonwealth of Australia, 2018). This position was in stark contrast to the inaccessible service offerings of other financial organisations where some used predatory practices to sell unethical financial products to Indigenous Australians (Hayne, Interim report: Royal commission into misconduct in the banking, superannuation and financial services industry, Volume 1. Commonwealth of Australia, 2018; Hayne, Final report: Royal commission into misconduct in the banking, superannuation and financial services industry, Volume 1. Commonwealth of Australia, 2019a). Storytelling garned from visiting customers in remote communities and other meaningful activities involving inclusive practice to facilitate ethical decision-making in finance is different to standard functionalist finance approaches (Schinckus, Int Rev Financ Anal 40:103–106, 2015). Two empathetic questions asked within QSuper complementing the storytelling, were: “What is the right thing to do by the customer?” and “How would I feel if this were my mother?” Exploration into the lived reality of moral capacity is important based on the Commission finding many of the 490,000 finance staff do not know how to provide ethical services to vulnerable customers, in particular remote Indigenous customers (Australian Bureau of Statistics. Labour force, Australia, detailed. ABS. Retrieved from https://www.abs.gov.au/statistics/labour/employment-and-unemployment/labour-force-australia-detailed /latest-release, 2021; Hayne, Final report: Royal commission into misconduct in the banking, superannuation and financial services industry, Volume 1. Commonwealth of Australia, 2019a). Furthermore, there is minimal literature on the role of Indigenous storytelling to heighten moral awareness in the finance industry which was found to lead to better ethical outcomes. (shrink)

Business Ethics, the Environment & Responsibility, EarlyView.

Business Ethics, the Environment & Responsibility, Volume 31, Issue 1, Page 257-271, January 2022.

The purpose of this article is to present and discuss some of the best practices of financial industry, in three emerging economies: Colombia, Ecuador, and Peru. The main thesis is that, notwithstanding the importance of certain specific deficiencies, such as an inadequate regulatory context or the lack of financial education among the population, the main factor that explains the low banking levels in emerging and developing economies, affecting mostly lower-income segments, is the use of inefficient financial (...) service distribution models. In connection with this thesis, we will try to show that traditional financial institutions, both in developing countries and in the advanced economies have a special social responsibility to help create an efficient financial system that makes saving and borrowing instruments available to the greatest possible number of citizens. (shrink)

Place mouse over image continent. 2.1 (2012): 36–39. From an ethical and political perspective, people and property can hardly be separated. Indeed, the modern political subject – that is, the individual, the person, the self, the autonomous actor, the rational self-interest maximizer, etc. – has taken shape in and through the elaboration, institutionalization, and enactment of that which rightfully belongs to it. This thread can be traced back perhaps most directly to Locke’s notion that the origin of the political state (...) occurs when people rise above the state of nature by ceding the power to prosecute offenses. The rule of law begins then with a defense of the right to property. People become subjects by adhering to the social contract, which they do by deferring the defense of their own property to the state. In this light, the response of the United States federal government to the financial crisis of 2008 appears to many as a breach of the social contract. The chant “banks got bailed out, we got sold out” states the claim plainly. Why exactly did some subjects (e.g., the banks) have their property defended by the state (i.e., through the variety of programs including TARP, the discount window at the US Federal Reserve, etc.), when other subjects (e.g., homeowners) found themselves without protection of their property rights, forced to default on mortgage debts and face dispossession? Even if the rhetoric about “too big to fail” can be believed, and the collapse of the financial system would lead to negative consequences for people who had little or no connection to the activities that brought it about, such consequences need not call into question the notion that everyone stands equally before the law. To occupy, then, appears as a form of civil disobedience, an intentional, retaliatory breach of the social contract by those who feel that they have lost the support of the state to which they ceded their power as sovereign agents. The visible and the invisible The violation of property rights of people who have recognition, protection and power under the law destabilizes their very status as citizens and tests the limit of democracy. Does the financial system force the dematerialized victimization of individuals? Do people become numbers, or worse still, percentages of unemployed, tranches of defaulted mortgages and foreclosures? Are they perhaps instead disenfranchised prospectively from the privileged position occupied by virtual entities and actors such as those involved in the derivatives markets, always already exiled back into the physical, visible realm? The line of conflict appears to be drawn between invisibility/absence/deferral and visibility/presence/realization. The demonstrators occupy an excess property of those subjects, namely, the banks and financial elite, who did receive recognition and protection under the law. By domesticating this excess property, rendering its invisibility visible within the political economy, the protesters raise a new form of threat to the hegemonic order. To occupy, then, involves a rejection of the order under which the “99%” have been subjected to erasure. The occupation seeks creatively to establish a new means of communication and law for its subjects. In the face of an existing power structure that is increasingly disenfranchising the majority of people while consolidating nodes of power and influence, the “occupation”, or the work of the Occupy movement, involves seizing a space that refuses the rules of the existing, allegedly corrupt sovereign state. This refusal of governance extends even to include a steadfast refusal to articulate a strategy, to formulate a list of demands, to converse with the sovereign power on the grounds of its own conventions, to put forth a leader, to resolve the ambiguity of the movement into a discreet identity, face, or voice. Do these tactics provide a resolution to the problem that was its genesis? Not in such a direct and easily resolved manner, but it remains difficult to imagine a direct and simple resolution to the problematic of the breach of the social contract. The ambiguity of the situation has generated significant interest within the broader populace, though many people sympathetic to the cause appear to be frustrated because the movement has not simply put forward a short list of concrete demands, or even a set of leaders and spokespeople, much less a resolution. And yet, this lack of coherence appears as a resolution of a problem generic to protest movements in the past, where individual leaders can be removed or discredited, and lists of demands can be co-opted by others holding more political power. Meanwhile, the ambiguity has compelled imitations on a global scale, with the Occupy Wall Street participants consciously taking actions that can be replicated by anyone anywhere without significant cost. These actions have taken place not in a peripheral location such as a parking lot in New Jersey, but instead close to the centers of power and governance, adjacent to Wall Street, close to the White House, on college campuses, etc. This spontaneous archipelago of protests becomes an irritant, a negation of the accepted order of protests, but when the protesters themselves move outside of their encampments, they are escorted by the police, constantly monitored and maintained so that a permanent state of paranoid persecution takes hold. To occupy, occupying, occupation – these actions involve a variable degree of danger – are you willing to step into a different space, where the rule of law is unclear and evolving? Are you presenting yourself as a representative of the majority, the 99%? Who has a sense of belonging to the 99%? This previously invisible population becomes a focal point of political power, garners increasing public support, infects the public dialogue. The government recognizes this population by forcing it from the occupied space, removing the element of possession of property. It is at this point of conflict, in the struggle to hold the physical property, where the greatest friction and violence occurs. Scaling the rule of law While occupied, the property calls for a redress of grievances, a restoration of the rule of law. The Occupy movement does not select and put forward individuals or leaders, it puts forward places – the occupied property represents the point of conflict, not the individual. And it is this very property that the government then tries to reclaim. The movement remains faceless, anonymous, uncounted, or rather counted only as a mass, the self-labeled mass of 99%. These spaces are like refugee camps or favelas, but constructed to unite the political life and private life of the protesters. This objective is presented as a tactical necessity, as all other means of protest and communication have failed, leaving only the option of seizing, holding, occupying a property. But to what end, exactly? Can anyone deliberately return to the prior social contract, embrace, affirm, and govern in strict accordance with the earlier relationship to property, following the logic of Locke’s arguments? In this respect, the contemporary crisis indicates a new, transitional phase in the way that property operates, or rather, in the balance between real and virtual value. The roots of the crisis lay in the massive overvaluation of property caused by lax lending practices, as more people were encouraged to borrow more money, which drove up the prices of property. At the same time, these individual properties, these mortgages for homes actual families lived in and worked to support, were bundled into securities that could be bought, sold, and speculated on. The reduction of a physical house or piece of real estate to an almost incalculably small element in an investment vehicle appears as a scaling of the hedge that radically diminishes the value of any individually owned property. Moreover, a number of recently-innovated financial products allow investors to hedge in new ways, to deliberately spread risk around a portfolio in hopes of bringing returns even when the individual mortgage defaults. At the level of the ‘free’ market, these virtual negative valuations are designed to balance the physical positive valuation, though many of the biggest lenders are now being investigated for controlling both sides of this valuation, the positive and the negative, to facilitate both the creation and failure of the investments and to profit from both. The ability to benefit from both the negative and positive value of an investment is a result of a technologically enabled capacity to operate within a complex field. These layered and scaled investment vehicles and the simultaneous negation of their value together represent a commingling of the virtual and physical existence that is both complex and multiple. The valuation of a virtual property has tremendous power to change the valuation of the physical - either injecting it with or depriving it of funds, pumping in or draining life and energy. This situation has roots of its own – the notion of property advanced e.g., throughout the enclosure movement in Britain was, from the outset, an imposition of virtuality (i.e., the concept of law, the institutions associated with ownership, etc.) on the physical reality of land. 1 The difference today is that technological trading platforms combined with innovations within the financial services industry have enabled the reduction of each individual property receiving or losing value in scale to an almost atomic level. In turn, the number of properties held simultaneously and valued as a massive, multiple wholes – i.e., the derivatives market in mortgage-backed securities – is a new phenomenon made possible through the application of similar technologies and institutional structures. And those actors who can trade in these layers of complexity can then profit from the new phase of disassociation of the virtual and the physical – unconcerned with and operating at such a virtual distance from the individual residing physically on a particular piece of real estate that they no longer feel the tug of the physical tying them back to the physical, operating literally as in a video game, in a virtually distanced world. What can or should be done about this situation? Answers lie outside the scope of this current essay, but merit consideration in the near future… NOTE 1) Hernando de Soto has emphasized this dimension by empirically demonstrating its non-existence in many countries in The Mystery of Capital. (shrink)

The academic literature has viewed drivers of corruption in isolation and, consequently, failed to examine their synergistic effect. Such an isolated view provides incomplete information, leads to a misleading conclusion, and causes great difficulty in curbing corruption. This paper conducts a systematic literature review to identify the drivers of corruption in the construction industry. Subsequently, it develops a system dynamics (SD) model by conceptualizing corruption as a complex system of interacting drivers. Building on stakeholder and open systems theories, the (...) proposed SD model shows how the complex reinforcing relationship between authoritative, organizational, cultural, and financial drivers of corruption further increases corrupt practices. The new model also provides lessons that can be helpful in the development of policy frameworks to control corruption in the construction industry. To achieve success in the fight against corruption, the findings of this research suggest that (1) corruption must be understood at both the organizational and state levels, (2) anticorruption practices must be informed by ethically grounded stakeholder management strategies, and (3) anticorruption reforms must go hand-in-hand with strategies to tackle the economic downturn. (shrink)

Presently, the pharmaceutical industry funds about half of the costs of continuing medical education programs in the U.S. This contributes to the ethical problems that pervade the relationship between medicine and the pharmaceutical industry: trustworthiness and conflicts of interest. The problems are exacerbated by rationalizations prevalent on both sides that deny the ethical concerns. Commercialism and commercial bias are highly visible at large CME gatherings, and available data, while scanty, back up the view that physician attendees' subsequent prescribing (...) practices are influenced by the commercial message. The industry believes that it will recoup $3.56 in increased sales for every dollar that it invests in CME. New guidelines instituted by the Accreditation Council for Continuing Medical Education in 2004 may succeed in reducing excessive commercial influence, especially since the Department of Health and Human Services has also warned the industry of possible anti-kickback violations if firewalls are not erected between CME funding and marketing of drugs. Critics counter that early indicators of improvement are lacking. (shrink)

Integrated design of financial self-service terminal based on artificial intelligence voice interaction with the rapid development of science and technology, artificial intelligence technology is deepening in the field of intelligence and automation. The financial industry is the lifeblood of a country’s economy, with great growth potential and high growth rate. The integrated design of intelligent financial self-service terminal has become an important topic in the field of rapid development of social economy and science and technology. Therefore, (...) this paper designs the integration of financial self-service terminal based on artificial intelligence voice interaction. First, this paper introduces the meaning and composition of financial self-service terminal integration, then studies the voice interaction principle based on artificial intelligence technology, and designs the integrated structure of financial self-service terminal with voice interaction. After that, this paper makes a series of tests on voice interaction technology, user experience, and the performance of financial self-service terminal. Finally, the test results of voice interaction are as follows: the delay estimation results of voice interaction of the terminal are relatively accurate, and the error points are basically within five sampling points, which indicate that the delay estimation algorithm is practical. The endpoint detection method based on CO complexity can effectively overcome the impact of noise environment on speech endpoint detection system and is suitable for the requirements of robust speech recognition system. Considering that the actual application scenario of voice positioning can judge the speaker’s position and turn to the speaker’s direction during human–computer interaction, the azimuth error is acceptable within a few degrees to meet the application requirements. The direction angle error is acceptable within a few degrees to meet the application requirements. The accuracy of the improved algorithm is improved in intercepting effective speech signals. The terminal has short running time and delay time, small memory, and central processing unit occupation and can meet the needs of users. The speech recognition accuracy of the financial self-service terminal basically reaches more than 80%, which can basically meet the daily needs. (shrink)

This practical-theological study aims to develop a contextual theology in the areas of business and government that will aid a successful intervention by the church in diminishing the corrupt practices prevalent in South Africa. It seeks to prove that corruption is a major factor in causing the delays experienced in the implementation of service delivery, and that this is causing much anger and increasing disillusionment with the present system of democratic government. At the moment the church has a window (...) of opportunity for this intervention to take place, since many of those responsible for supporting, organising and implementing service delivery, both in government and industry, worship regularly, as committed members, in local Christian congregations. A modified application of the Asset-Based Community Development (ABCD) approach using focus groups is suggested as both a tool for intervention and for further research. (shrink)

Motivated by the increasing economic significance of investment advisory industries and the prevalence of wrongdoing in financial planning services, we examine whether, and to what extent, employee misconduct is shaped by their local corruption culture. Using novel data of more than 4.7 million adviser-year observations of financial advisers and the Department of Justice’s data on corruption, we find that financial advisers and advisory firms located in areas with higher levels of corruption are more likely to commit (...) misconduct. These results hold for both individual advisor and firm level analyses and are robust to the use of various fixed effects, model specifications, proxies for corruption and misconduct, and an instrumental variable approach. Using the passage of the Dodd-Frank Whistleblower Provision, which provides incentives for reporting corruption incidences and thereby reduces the incentives for fraud, we find that the relation between local corruption culture and adviser misconduct is attenuated after the provision enacted by the SEC. Overall, our study highlights the externalities of corruption culture on individual ethics and the essential role of whistleblowing laws in reducing corruption-prone norms. (shrink)

The idea that the ethical values of professionals in finance have played a role in the global financial crisis is widespread. The crisis-of-ethics debate is important, concerning one of the main policy challenges of our times, but is based on popular lore and anecdotes rather than systematic evidence. We analyze the self-enhancement and self-transcendence values of PIFs vis-à-vis the general population and test for patterns of variation that are consistent with the idea of a crisis of values, meaning patterns (...) of variation that would implicate PIFs’ values in the GFC. Employing pre-crisis data allows for an unbiased assessment. Results reveal only minor differences in values between PIFs and the general population, too small to support the idea of a crisis of ethical values by objective standards. Extensive robustness checks confirm these findings, sometimes actually revealing values differences counter to the crisis of ethical values idea. We conclude that the financial system would not have fared better had we had a different breed of PIFs. Rather, situational forces can induce severe disregard for the welfare of others, also in people with ordinary, decent values. Hence, if anything, the GFC shows that the financial services industry has been providing an environment highly conducive to unethical behavior. The practical implication is that fixes to the financial system can only come from improved regulatory design. (shrink)

I argue that epistemic failings are a significant and underappreciated moral hazard in the financial services industry. I argue further that an analysis of these epistemic failings and their means of redress is best developed by identifying policies and procedures that are likely to facilitate good judgment. These policies and procedures are “best epistemic practices.” I explain how best epistemic practices support good reasoning, thereby facilitating accurate judgments about risk and reward. Failures to promote and adhere to (...) best epistemic practices contributed to the 2008 financial crisis. I identify and discuss some of the ways in which best epistemic practices were violated in the events that led to the crisis, with a focus on the role of the credit rating agencies. I go on to discuss some of the ways in which these failings have been redressed. I conclude by observing how proactive regulation for best epistemic practices might help us to anticipate and avoid future crises. (shrink)

Disclosure of financial interests in scientific research is the centerpiece of the new conflict of interest regulations issued by the U.S. Public Health Service and the National Science Foundation that became effective October 1, 1995. Several scientific journals have also established financial disclosure requirements for contributors. This paper measures the frequency of selected financial interests held among authors of certain types of scientific publications and assesses disclosure practices of authors. We examined 1105 university authors (first and last (...) cited) from Massachusetts institutions whose 789 articles, published in 1992, appeared in 14 scientific and medical journals. (shrink)

The financial crisis of 2008 raised the politics of regulation to a new level of practical and scholarly attention. We find that recent reforms in U.S. financial markets hinge on intellectual resources and new organizational actors that are missing from existing concepts of regulatory capture or business power. In particular, small advocacy groups have proven significantly more successful in opposing the financial services industry than existing theories predict. By maintaining the salience of reform goals, elaborating (...) new analytic frameworks, and deploying specialized expertise in post-enactment debates, smaller organizations have contributed to a diffuse but often decisive network of pro-reform actors. Through the rule-writing process for macroprudential supervision and derivatives trading, these small organizations coalesced with other groups to form a new stability alliance that has so far prevented industry groups from dominating financial regulation to the degree that occurred in earlier cases of regulatory reform. (shrink)

: This paper argues that three salient corrupt practices that mark contemporary Chinese health care, namely the over-prescription of indicated drugs, the prescription of more expensive forms of medication and more expensive diagnostic work-ups than needed, and illegal cash payments to physicians—i.e., red packages—result not from the introduction of the market to China, but from two clusters of circumstances. First, there has been a loss of the Confucian appreciation of the proper role of financial reward for good health (...) care. Second, misguided governmental policies have distorted the behavior of physicians and hospitals. The distorting policies include (1) setting very low salaries for physicians, (2) providing bonuses to physicians and profits to hospitals from the excessive prescription of drugs and the use of more expensive drugs and unnecessary expensive diagnostic procedures, and (3) prohibiting payments by patients to physicians for higher quality care. The latter problem is complicated by policies that do not allow the use of governmental insurance and funds from medical savings accounts in private hospitals as well as other policies that fail to create a level playing field for both private and government hospitals. The corrupt practices currently characterizing Chinese health care will require not only abolishing the distorting governmental policies but also drawing on Confucian moral resources to establish a rightly directed appreciation of the proper place of financial reward in the practice of medicine. (shrink)

Outsourcing is becoming a major option in British business, including the financial services industry, and it raises a number of ethical considerations. The author of this major ethical study contends that “Outsourcing seems to present a particular threat to employees... because of the factors which have led to outsourcing and the way in which it tends to work.” Mike Henderson is an Associate of the Chartered Institute of Bankers and Senior Lecturer in Financial Services in (...) the School of Financial Studies and Law of Sheffield Hallam University, City Campus, Pond Street, Sheffield S1 1WB, England. (shrink)

Based on the findings of several research studies of professionals in both the property-liability insurance industry and the life insurance industry, the paper makes and supports several important points. First, ethical challenges in the insurance industry involve not only a series of ethical dilemmas frequently faced by those working in the business, but also a variety of factors that hinder those working in the industry as they seek to resolve the ethical dilemmas encountered in the course (...) of their work. Both of these two components of ethical challenges must be understood by those in the financial services industry who will deal with insurance operations in the future. Second, whereas the life insurance business and the property-liability insurance business have traditionally been viewed as being quite different from one another and still are in terms of operations and regulation, the research findings show that they are no longer very different in terms of the key ethical challenges faced by those working in the two segments of the industry. The paper shows how during the past decade the ethical challenges in the property-liability insurance industry have become quite similar to those in the more troubled life insurance industry. (shrink)

Outsourcing is becoming a major option in British business, including the financial services industry, and it raises a number of ethical considerations. The author of this major ethical study contends that “Outsourcing seems to present a particular threat to employees ... because of the factors which have led to outsourcing and the way in which it tends to work.” Mike Henderson is an Associate of the Chartered Institute of Bankers and Senior Lecturer in Financial Services (...) in the School of Financial Studies and Law of Sheffield Hallam University, City Campus, Pond Street, Sheffield S1 1WB, England. (shrink)

Business Ethics, the Environment & Responsibility, EarlyView.

Business Ethics, the Environment & Responsibility, Volume 31, Issue 1, Page 209-223, January 2022.

Financial relationships and business transactions between physicians and the health care industry are common. These relationships take a variety of forms, including payments to physicians in exchange for consulting services, reimbursement of physician travel expenses when attending medical device and pharmaceutical educational conferences, physician ownership in life science company stocks, and the provision of free drug samples. Such practices are not intrinsic to medical practice, but as the Institute of Medicine described in its 2009 report, these relationships (...) have the potential to produce positive collaborations that improve patient care and public health, and most physicians view it as “ethically proper to accept items ranging from drug samples to a lucrative consultantship.”However, financial relationships between physicians and pharmaceutical, medical device and biotechnology companies can also create negative influences on physician judgment that compromise patient care and jeopardize the public’s trust. (shrink)

Financial services have a very significant impact on and meaning to the daily life and welfare of consumers. The spectrum of these types of services is very broad, and their regulation is also changing both at EU and national (Member State) level. In order to implement the main or the most relevant EU level goals, such as high level consumer rights protection, consumer trust in business sector, proper and effective functioning of the EU internal market it is (...) essential to ensure clear and sufficient legal regulation, establish responsibility of the services providers, consumer rights and duties as well as promote, seek for the more effective, faster and cheaper ways of solving consumer and business sector disputes. The authors of this article support the idea that the abovementioned goals can be achieved by close and more fruitful cooperation between the EU and national competent authorities, participation in various ad hoc expert working groups, committees or EUwide networks, such as FIN-NET. This article reflects general ideas about the problems arising in the financial consumer services sector, the activity of the EU and national institutions, seeking to ensure fair and transparent provision of such services to consumers, analysis of alternative dispute resolution (hereinafter – the ADR) methods and the good practice of their application in the EU Member States. This article highly supports the application of alternative, nonjudicial procedures and broader application of the means of selfregulation, such as codes of conduct. (shrink)

This paper seeks to determine the extent of anti-corruption information disclosure in the sustainability reports originating from Gulf countries. Focus primarily on the fight against corruption, this study utilizes a deeply-rooted content analysis technique of corporate sustainability reporting, covering 66 Gulf Cooperation Council (GCC) firms during 2014. Strengthened by the application of institutional theory, insight into the results points to a state of limited maturity regarding the disclosure of anti-corruption procedures in the region. More specifically, the results highlight the compliance (...) in the reporting of conduct code, while reporting information on whistle-blowing was significantly less in comparison. Firms in Qatar and UAE ultimately release better informed reports; inclusive of detailed information on internal anti-corruption practices. (shrink)

In this study, we examine whether corporate environmental responsibility plays a role in enhancing operating performance in the financial services sector. Because achieving success with CER investing is often a long-term process, we maintain that by effectively investing in CER, executives can decrease their firms’ environmental costs, thereby enhancing operating performance. By employing a unique environmental dataset covering 29 countries, we find that the reducing of environmental costs takes at least 1 or 2 years before enhancing return on (...) assets. We also find that reducing environmental costs has a more immediate and substantial effect on the performance of financial services firms in well-developed financial markets than in less-developed financial markets. These results are economically and statistically significant and robust even after alleviating endogeneity and using an additional performance measure. We interpret our empirical results as supporting the social impact and reputation-building hypothesis. Our findings also suggest that policy makers dealing with corporate sustainability management should pursue an environment-centered industry policy not only at the manufacturing sector but also at the financial services sector, as firms in both sectors with lower environmental costs perform better. (shrink)

Student sex work is a current phenomenon all over the world, increasingly reported by the media in recent years. However, student sex work remains under-researched in Germany and is lacking direct first-hand reports from the people involved. Further, sex work remains stigmatized, and therefore, students practicing it could be at risk of social isolation and emotional or physical danger. Therefore, this study examines students working in the sex industry focusing on their personal experiences and attitudes toward them. An online (...) questionnaire was completed by 4386 students from Berlin universities. Students who identified themselves as sex workers were questioned with respect to their motivations to enter the sex industry, characteristics of their job, feelings after the intercourse, and perceived risks. Student non-sex workers were questioned regarding knowledge of and attitudes toward student sex workers. Most student sex workers reported that they entered the sex industry due to financial reasons. The majority reported offering services involving direct sexual intercourse. Disclosing their job to friends, family, or others was associated with less problems with social isolation and in romantic relationships. With a total of 22.9%, student non-sex workers reported never having heard about students working in the sex industry. The most frequent emotions mentioned by them with regard to student sex workers were compassion and dismay. There was no difference in happiness between student sex workers and non-sex working students. Through this research, it becomes evident that there are similarities between the student’s motivations to enter the sex industry, their feelings, and the problems they have to face. Moreover, prejudices still prevail about the life of student sex workers. Increasing understanding of student sex work might help those sex workers to live a less stigmatized life and thereby to make use of support from others. The universities as institutions could form the basis for this, e.g., by openly supporting student sex workers. This could help to encourage the rights of student sex workers and to gain perspective with respect to the sex industry. (shrink)

This second edition of the ground-breaking Ethics in Finance is an up-to-date, valuable addition to the emerging field of finance ethics. Citing examples of the scandals that have shaken public confidence in Wall Street, John R. Boatright explains the importance of ethics in the operation of financial markets and institutions and in the conduct of finance professionals." "Focusing on standards of fairness in market transactions and the duties of fiduciaries and agents in financial relationships, the author introduces a (...) broad range of practical issues related to financial markets, the financial services industry, investment decision making, and corporate financial management. In addition to the topics considered in the first edition, including unethical sales practices, insider trading, the abuse of bankruptcy, and hostile takeovers, the second edition of Ethics in Finance has a broadened scope, incorporating new discussions of issues in mutual funds, conflict of interest, and the financial theory of the firm." "This timely and comprehensive book provides an analysis of ethical issues in finance, suitable for students of finance and business ethics as well as anyone involved in financial activities."--Jacket. (shrink)

In his important recent book, Ethics and the Global Financial Crisis: Why Incompetence is Worse than Greed, Boudewijn de Bruin argues that a key element of the global financial crisis of 2007–2008 was a failure of epistemic virtue. To improve matters, then, de Bruin argues we need to focus on the acquisition and exercise of epistemic virtues, rather than to focus on a more ethical culture for banking per se. Whilst this is an interesting suggestion and it is (...) indeed very plausible that an increased focus on proper knowledge-related behaviour will be part of a solution, we are sceptical both about de Bruin’s overarching theoretical claims and about his practical suggestions for change. Instead we argue that change in this sector is best promoted by reconceiving of the relationship between financial institutions and the societies they serve, and that this is fundamentally not an epistemic but a moral issue. (shrink)

Using a unique dataset provided by the international rating agency GES®, we investigate the effects of corporate sustainability and industry-related exposure to environmental and social risks on the market value of MSCI World firms. The results show a negative relationship in the earlier years of our sample period. However, the analysis reveals that the capital market perception of sustainability has changed owing to the financial crisis. Looking at the height of the crisis in September 2008, the month in (...) which Lehman Brothers shocked the world’s capital markets by filing for Chapter 11 bankruptcy protection, we find that the previously negative perception of corporate sustainability across its various dimensions was positively affected and offset. In addition, as a moderated regression analysis shows, the crisis led to a positive perception of corporate sustainability in industries that are exposed to higher environmental and social risks. Our study has the practical implication that executives, in particular in industries with high environmental and social risks, should increase their commitment to corporate sustainability due to the changes in the institutional setting triggered by the financial crisis. (shrink)

We bring together recent discussions on data capitalism and biocapitalization by studying value flows in consumer genomics firms—an industry at the intersection between health care and technology realms. Consumer genomics companies market genomic testing services to consumers as a source of fun, altruism, belonging and knowledge. But by maintaining a multisided or platform business model, these firms also engage in digital capitalism, creating financial profit from data brokerage. This is a precarious balance to strike: If these companies’ (...) business models consist of assetizing the pool of genomic data that they assemble, then part of their work has to revolve around obscuring to consumers any uncertainties that would potentially impinge on these processes of assemblage. We reflect on the nature of these practices and the market relationships that enable them, and we relate this reflection to debates around alternative market arrangements that would potentially mitigate the extractive tendencies of these and other digital health firms. (shrink)

The purpose of cause-related marketing (CRM) is to publicise and capitalise on a firm's corporate social performance (CSP) by enhancing its legitimacy in the eyes of its stakeholders. This study focuses on the firm's internal stakeholders - i.e. its employees - and the extent of their involvement in the selection of social campaigns. Whilst the difficulties of managing a firm that has lost or damaged its legitimacy in the eyes of its employees are well known, little is understood about the (...) extent to which managers and their social partners listen to and involve their employees in the legitimation process. Through telephone interviews with non-profit organisations and senior managers of service sector firms, the extent of employee involvement in CRM campaigns and the perceived benefits of doing so are investigated. Amongst other things, we find that (i) the extent of employee participation varies significantly across firms; (ii) larger CRM campaigns tend to be managed centrally with relatively less employee participation than smaller ones and (iii) financial services firms are more likely to make CRM decisions centrally, with relatively less employee participation than retail services firms. (shrink)

This study examines from an ethical framework the circumstances of workers who are engaged in non-professional services that are offered through corporations that are organized to serve high volume of costumers. Drawing on the relevant ethical teachings of the Catholic social tradition (CST), it explores some practices, strategies, and policies that could address the problems experienced by many service providers in the United States today. CST refers to a wide variety of documents of the magisterium of the Catholic Church (...) which respond to the changing social and economic challenges of the modern world. The study argues that the primacy of the person, love and subsidiarity, sense of community, and respect for worker’s rights and unionism in CST are not only moral principles that uphold intrinsic human goods, they are likewise instrumental to operational effectivity because they promote job satisfaction, smooth interpersonal relationship, and long-term commitment with the company. They enable service providers to work efficiently, deliver exceptional service, and act as conduit between the customers and the business establishment, rather than simply being caught between their conflicting demands. (shrink)

There are major concerns about the level of personal borrowing, particularly sourced from credit cards. This paper charts the progress of an initiative to create a Responsible Lending Index (RLI) for the credit industry. The RLI proposed to voluntarily benchmark lending standards and promote best practice within the credit industry by involving suppliers of credit, customer representatives and regulators. However, despite initial support from some banks, consumer bodies and the Chair of the Treasury Select Committee, it failed to (...) gain sufficient support from financial institutions in its original format. The primary reasons for this were related to the complexity of building such a robust index and the banks trade body’s fear of exposing its members to public scrutiny. A revised alternative, the Responsible Lending Initiative, was proposed which took into account these concerns. However, the Association of Payment Clearing Service (APACS), the trade body of the credit industry, then effectively destroyed the proposal. This article describes an attempt to address the challenges in the credit card industry with the initiation of the RLI, reflected in stakeholder discourse and in the context of a wider concern expressed by the involved stakeholders in terms of the need for greater responsibility in the banking industry’s lending practices. (shrink)

This paper presents a study that identifies a stakeholder-defined concept of Corporate Responsibility (CR) in the context of a UK financial service organisation in the immediate pre-credit crunch era. From qualitative analysis of interviews and focus groups with employees and customers, we identify, in a wide-ranging stakeholder-defined concept of CR, six themes that together imply two necessary conditions for a firm to be regarded as responsible—both corporate actions and character must be consonant with CR. This provides both empirical support (...) for a notable, recent theoretical contribution by Godfrey (in Acad Manag Rev 30:777–798, 2005 ) and novel lessons for reputation management practice. (shrink)

This very short paper highlights some of my recent and forthcoming work on “good epistemic practices” in the financial services industry. It identifies some epistemic dimensions of risk management in banking and illustrates how managing for good epistemic practices might be helpful.

Socially responsible investing (SRI) has emerged in recent years as a dynamic and quickly growing segment of the U.S. financial services industry involving over $2 trillion in professionally managed assets. Its conceptual origins can be found in the early history of civilization, with it's modern roots in the 1960s. This paper provides an overview of the breadth and depth of the concept and practice of socially and environmentally responsible investing, describes the investment strategies that together define SRI (...) as currently practiced in the U.S., offers several observations about some of the factors fueling its dramatic growth, and presents data showing that investors who choose to invest in a socially and environmentally responsible manner can do so without giving up investment returns. SRI has matured to a point where virtually any investment need can be met through portfolio design that integrates an investor's personal values, institutional mission, and/or social priorities. The socially responsible investment industry in the United States is a young phenomenon. Even referring to it as an "industry" ten years ago may have been a bit of a stretch. While it has grown dramatically in recent years, it is an area of work, of study and of practical application that continues to evolve in many significant ways. One intriguing example of the ongoing development of the field can be found in the analysis of the language used to describe it. The terms social investing, socially responsible investing, ethical investing, socially aware investing, socially conscious investing, green investing, values-based investing, and mission-based or mission-related investing all refer to the same general process and are often used interchangeably. (shrink)

From 1687, the year when Newton published his Principia, to the Crystal Palace Exhibition of 1851, science gradually became central to Western thought and economic development. The book examines how, despite powerful opposition on the Continent, a Newtonian understanding gained acceptance and practical application.

This article argues that the misalignment of private profit-maximizing objectives with public health needs causes institutional corruption in the pharmaceutical sector and systematically leads firms to act contrary to public heath. The article analyzes how financial incentives generate a business model promoting harmful practices and explores several means of realigning financial incentives in order to foster therapeutic innovation and promote the rational use of medicines.