Business Ethics: Financial Service Industry

2804 Words12 Pages
BUSINESS ETHICS Financial services industry Ethical issues in the financial services industry affect everyone, because even if you don’t work in the field, you’re a consumer of the services. That was the message of Ronald F. Duska and James A. Mitchell in their presentation at a recent meeting of the Business and Organizational Ethics Partnership. The public seems to have the perception that the financial services sector is more unethical than other areas of business, Mr. Mitchell began. For the past five years, he has been Executive Fellow-Leadership at the Center for Ethical Business Cultures, which is affiliated with the University of St. Thomas College of Business. He assists business leaders in developing ethical and profitable cultures. This misperception persists for several reasons, Mitchell said. First of all, the industry itself is quite large. It encompasses banks, securities firms, insurance companies, mutual fund organizations, investment banks, pensions funds, mortgage lenders—any company doing business in the financial arena. Because of its vast size, the industry tends to garner lots of headlines, many of which tout its ethical lapses. “This business that we’re talking about is really big. It is, to be precise, $50 trillion in assets. It’s growing 8 percent a year, which is more than twice as fast as the gross domestic product,” Mitchell said. “It’s also highly profitable. The financial services sector of the S&P 500 represents 20 percent of this index’s market capitalization. These companies are making a lot of money serving you.” So, he theorized, with “trillions of dollars of assets, billions of transactions every year—every day probably—when a small percentage of them is inappropriate, the absolute numbers are still pretty big.” The industry is also highly regulated, so it’s likely that a higher percentage of these bad transactions

More about Business Ethics: Financial Service Industry

Open Document