Managing investments, savings, and capital is no simple task when it comes to acting under certain ethical principles. In a business context, we financial actors have a great responsibility to respond to the demands of a changing market. It’s not uncommon to hear about conscience in finance as a topic increasingly addressed in reference to recent stories of fraud, bankruptcy, monetary crises, and indebtedness. Attributed both to organizations and their officials, these types of negligence are generally related to immoral behaviors, which mostly stem from an educational need regarding their basic principles. Therefore, understanding the fundamentals of the term and its relevance is vital to not only comprehend the values that guide the industry but also to elevate the standards when exercising our respective commitment.
It’s usual to think about the combination of moral pillars that accompany us in both personal and professional decisions, regardless of the subject matter. Grounded in an organizational environment, this topic aims to guide the actions of agents and entities towards their goals through a combination of fundamentals, norms, and criteria. In reference to the subject matter as the basis of adequate administrative work, Dr. Heber Longhurst, a professor of accounting and finance and a member of the board of the CFA Society of Mexico, explained its influence as, “in the financial sector, ethics is central, principal, of utmost importance to be able to gain the public’s trust so they invest with us.” Principles You Should Know While the role of a manager is fundamental for decision-making in their company, they must have basic moral practices directed towards social good, far from any personal interest. Therefore, we share with you some of the most relevant principles for ideal performance. Justice Always oriented towards the good of the clients, this element is essential to maintain an equitable perspective that integrates all those involved within a financial operation, which includes not taking advantage of factors such as economic position, lack of information, or unfair discrimination against different clients. Objectivity When it comes to processes like recording transactions or creating financial statements, this value demands a bias-free approach. And here is where impartiality, by not giving an advantage to some over others, helps align all participants towards a healthy and fair relationship. Confidentiality The financial information that is handled must always be private and managed accordingly. Regardless of the size of an organization, it is very important not to use it for personal or third-party benefit, and much less to divulge it. In short, this principle guarantees that such information is accessible only to authorized personnel. Legality Adhering to the legal framework, legality in finance talks about professional practice according to current law and the norms established by the entity. This includes codes of conduct as an elemental guideline to promote professionalism. Why is it so Important? While having the right skills to handle such large sums of money is essential, generating an organizational culture that integrates norms and virtues is just as necessary to balance and protect the interests of all parties involved. Establishing a code of ethics, for example, helps recognize the expected limits by the personnel within an organization less inclined towards problems of fraud or conflicts of interest. If broken, the company can incorporate everything from behavior codes to sanctions according to the violated regulation. In conclusion, ethics in finance establishes a path of principles and standards for a conscious and honest practice. When practiced solidly, it is capable of defining the necessary bases for optimal institutional management. And we, as professionals who effectively exercise this set of standards, manage to boost both personal and collective performance within an organism that inspires trust; you can identify these fundamentals.
