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英文代写-FNCE30009
时间：2022-01-18
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FNCE30009 Ethics 2022 Summer
PASS 不是我们的代言 H1 才是我们的目标
FNCE30009 Ethics in
Finance
第一次课
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课程次数 课程时间 课程内容
第一次课 1月13日 21.00-23.30 考试综述 + Lecture 1,2
第二次课 1月20日20.40 -23.10 Lecture 3,4
第三次课 1月26日20.40-22.40 Lecture 5,6
第四次课 1月27日20.40-22.40 L7 & CFA 准则学习
第五次课 2月09日20.40-22.10 CFA 准则学习+刷题课程
第六次课 2月10日20.40-22.10 刷题课程
课程行进过程，难免发生时间变变化，请关注群通知。
考试综述
1. Exam Format
2 hour written online open book exam, held in the exam period at the end of the 5 weeks
去年考试安排
1) Fifteen minutes – reading time (highlighting)
2) Two hours – three questions (25/20/25 = 70 marks) Open Book and English language
dictionary permitted
3) Type the answers in the allotted spaces of the document – font size 12
4) Email/upload your completed exam
5) as a Word document or a PDF.
2. Topics
1. Introduction – Ethics in Finance
2. Theories and Foundations –
business needs; utilitarianism, deontology/Aristotelean ethics, ethical relativism
3. Internal Business Ethics –
loyalty/integrity; whistleblowing; trade secrets; conflicts of interest
4. Corporations and Global Ethics – CSR; governance; international ethics
5. Market Integrity – insider trading; manipulation; self-regulation
6. Duties to Clients/Employers –
loyalty, prudence, care; fair dealing; suitability; whistleblowing, trade secrets
7. Investment Advice and Conflicts of Interest –
due diligence, reasonable basis; communications; fact and opinion; disclosure;
managing conflict
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3. Exam Preparation
• There are 3 Questions...
- based on newspaper stories that relate to one of the topics.
- You need to answer each question based on that topic, ...but you may “cross-over”
into other topics.
• Do not repeat the newspaper story!
• Do not repeat the “Open Book” (it doesn’t have the answer)! But...
• In your own words, your evaluation of the case! ...
• Do not write more than what fits in the allocated space!
• Dot points are fine, but do not forget the explanation (NO yes/no)
第一周课程结构：
1. 道德词汇讲解
2. PPT L1
3. PPT L2
词汇学习
道德基础词汇
Code of Ethics
Standards of professional conduct
Moral principal
Ethical behavior/conduct
Ethics/Morality/Virtue
优秀的品质
Independent Objectivity Transparent
Integrity Honest Trustworthy/trust
Fulfill Responsibility Competence fulfill commitments
Diligence Reasonable basis Encourage
Compromise Erode Protect one’s interest
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道德条款
Conflicts of interests
Material Non-public Information
Priority of Transaction
Preservation of Confidentiality
Diligence and on a reasonable basis
Integrity of Capital Market
Professionalism
Loyalty/Duty to clients & emoloyer
不良行为
Misrepresentation Misconduct Misappropriation
Dishonesty Fraud fraudulent Deceit
Misleading Omission/Omit Market manipulation
Exaggerate violation aggressive
Ethical concerns Moral hazard Discriminate/disadvantage
主题词汇
Effective compliance system/Inadequate procedures
Statutory regulations/ Applicable laws/rules
Disclosure/Disclose/ written conscent/permission
Current/Prospective/ Former clients
Comply with/ Voilate/engage/adhere to
Directors/management/supervisor/supervise/monitor
Investment analysis/recommendations/advice
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Lecture1. Introduction
Overview:
1.1 Introduction to Ethics
1.2 The individual
1.3 Workplace Delimmas
1.4 Dealing with Delimmas
1.1 Introduction to Ethics
1.1.1 Definition
• Oxford Dictionary: ‘Moral principles that govern a person’s behaviour or the conducting of
an activity.’
• Popular understandings: trust, integrity, honesty, good, social responsibility and doing the
right thing.
• Philosophical, the words of Socrates: ‘What ought one to do?’
1.1.2 The banking industry plays a vital role in our society:
- Borrowing and Lending;
- Access to money/facilitates transactions; and
- Fundraising for businesses and infrastructure.
It is essential that the industry is trusted and trustworthy.
High ethical standards needed from the industry, firms and the people working within it.
1.1.3 External Factors:
• Legislation: Banking Act, Anti-Money Laundering and Whistle- blower Protection.
• Industry Regulators and Associations: APRA, ASIC, AFMA, ABA.
• Competitors and peers: ‘best practice.’
• Investors and Shareholders.
• Clients.
• Indices and surveys.
• Economic trends and world events.
• Society and community expectations.
1.1.4 Internal Factors:
• Organisation Type: Publicly listed, Private, Co-operative.
• Management Structure.
• Leadership and role-modelling.
• Environmental, Social and Governance approach.
• Reporting.
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• Values and Code of Conduct.
• Remuneration policies and practices.
• Recruitment and employment policies and practices.
• Risk management: audit and compliance
• Training and performance management.
• Office environment.
1.2 The individual
1.2.1 Challenges to individual integrity
• Being asked to do something that isn’t right.
• Being tempted to do something that isn’t right.
• Feeling a personal conflict about a deal or transaction you are involved in.
• Witnessing bad behaviour.
Such dilemmas can be made worse when you are:
• Time poor.
• Under pressure.
• Unsupported.
• Unsupervised.
• Stressed.
• Fatigued.
• Isolated: not in the head office.
Factors that Influence Individual
• Experience.
• Team.
• Personal Opinion.
• Time.
• Theories, tools and techniques.
• Environment.
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1.3 Workplace Delimmas
1.3.1 Disturbing occurrences in the workplace:
• Moral muteness.
• Limited view of stakeholders.
• Unthinking custom and practice.
• Faking it.
1.3.2 John Knapp’s four categories of corporate self-deception:
1. Tribalism: belief that the company is always right.
2. Legalism: the inability to imagine moral obligations beyond the law
3. Moral relativism: the excusing of unethical practices by viewing business as a ‘game’ and
oneself as a ‘role’.
4. Scientism: the elevation of science, including management science, to a position of
unquestioned authority.
1.3.3 Common Workplace Dilemmas
• Misuse of information: confidential information and disclosure.
• Morality of business deals: environmental issues, gambling, tobacco, alcohol and child
labour.
• Self advancement.
• Exploiting loopholes.
• Being instructed to do something that isn’t right.
• Witnessing bad behaviour.
1.3.4 Ethical Dilemmas & Culture
• Different ways of doing business.
• Bribes and facilitation payments.
• Dealing with superiors.
• Alcohol at work related events.
• Role of women in the workplace.
• Staff entertainment.
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1.4 Dealing with Delimmas
1.4.1 Good Decision-Making
1. What’s the story?
• What are the facts, what are the assumptions?
• What are the understandings?
• Are there any non-negotiables?
2. Voices in the conversation
• Identify the significant stakeholders: what would they want? Do their needs compete? If so,
who would get priority and why?
• Identify major values and principles related to the issue: do any of these compete?
3. Frame the dilemma
• A choice between good options but a decision still has to be made and justified.
• Only poor options available.
4. Generate Options
• Brainstorm the options: be creative, include all ideas, even the ridiculous.
5. Provisional Position
• What is your decision?
• What is your explanation for this course of action? Including ethical, moral, economic and
legal reasoning.
6. Weaknesses in your position
• Can your position be modified either to reduce or eliminate these weaknesses while still
maintaining its overall strength?
7. Final Check
• The ‘Golden Rule’
Putting yourself in the other persons shoes. How would you feel?
• The Mentor/Respected person Test
Would my mentor or someone I respect choose this option?
• Sunlight Test
How would you feel if your decision was made public?
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1.5 Cases
1.5.1 NAB
Summary
• In 2004 “rogue traders” at NAB were discovered as having covered up $360 million in
foreign currency options. They had traded highly leveraged call options on AUD.
Outcome
• The incident was investigated by Australian Federal Police APRA and ASIC.
• The scandal wiped out almost A$2 billion from NAB’s market capitalisation within a few
days.
• Chairman, Charles Allen and Managing Director and Chief Executive Officer Frank Cicutto
resigned, Senior Management were dismissed and the Board restructured.
• Four traders were charged by ASIC, Head of Foreign Currency Options and given gaol
sentences for charges of dishonestly gaining financial advantage.
Integrity/Ethics Issues
• Major gaps in cultural fabric.
• Whistle-blowing and bullying.
• Behaviour or rogue traders and risk management systems.
1.5.2 Société Générale
Summary
• Jerome Kerviel is a trader for French securities firm Société Générale who was charged with
losing more than $7 billion in company assets by conducting a series of unauthorized and
false trades between 2006 and early 2008.
Outcome
• Kerviel was formally charged on January 28, 2009 with abuse of confidence and illegal
access to computers.
• On October 5, 2010 Kerviel was sentenced to 3 years in prison for fraud and breach of trust.
He was ordered to repay €4.9 billion.
Integrity/Ethics follow-up
• Characterised as a ‘rogue’ trader.
• Many have questioned how unauthorised trading of this magnitude could go unnoticed.
• Kerviel claimed the practices were widespread and that making a profit makes the hierarchy
turn a blind eye.
• Kerviel is not thought to have profited personally from the suspicious trades.
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1.5.3 Case 3.
Summary
• Bernard Madoff was responsible for the largest Ponzi scheme in history.
• He presented his clients with false trading reports which he constructed from backdated
information. He used these report to gradually steal from his clients.
• Due to his high status his falsifications were rarely scrutinised.
• High returns which didn’t make mathematical sense led to his exposure
• It was estimated that US$65 billion was misappropriated.
Outcome
• Madoff received a 150 year sentence. (Maximum for all charges)
Integrity/Ethics follow-up
• Since the affair there have been many inquisitions into how it was able to go undetected for
so long.
• The type of investors that Madoff was able to steal from is also of interest.
• Harry Markopolos, Madoff’s whistleblower, had claimed that the Securities and Exchange
Commission (US) had ignored his warnings about the scandal.
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Lecture2. Theories and Foundations
Overview:
2.1 Teleology
2.2 Equality, Liberty
2.3 Virtue Ethics
2.4 Relativist – Learning and growth
2.0 Business Ethics
2.0.1 Business Ethics Definition
• Principles and standards that guide behaviour in the world of business!
• Right or wrong, acceptable or unacceptable behaviour within the organization.
• Determined by (all) key stakeholders.
2.0.2 Ethics and Economics
• In a free market economy, firms optimally allocate scarce resources or factors of
production to produce output. Firms maximize their preferences/utility by producing
output to the point where marginal revenue equals marginal cost. In competitive settings,
this leads to economic efficiency.
• Ethics considers many other reasons beyond maximizing utility.
2.0.3 Ethics and the Law
The government interventionist school of thought assumes that
1. Law prevails in public life and ethics in private life
2. Law is a minimum, ethics is icing on the cake
Both assumptions are flawed, as the legal system reflects ethical positions.
• Well-developed legal systems (within countries) embed ethics within the law for business
conduct.
• Less-developed legal systems (international law) highlight the lack of this embodiment
Why the law on its own is insufficient:
• The law is inappropriate for regulating some parts of business activity
• The law usually lags ethical developments
2.0.4 Business needs ethical leadership
• The law uses opaque moral concepts (e.g. good faith, best effort, due care)
• movingbeyondhiringmoralpeople
• requires strategic planning beyond delegating to subordinates
• key responsibility at the highest levels, including the board of directors
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• requires the development of a corporate culture that values ethics & compliance
• courts, laws and society hold top management responsible for misconduct
2.0.5 Ethic Theories
1) Teleology
2) Deontology
3) Relativist Perspective
4) Ethical learning and growth Virtue Ethics
2.1 Teleology
2.1.1 Teleology
• An act is considered morally right or acceptable if it produces a desired result (pleasure,
knowledge, career growth, self-interest, utility)
• The moral value of behaviour is assessed by looking at its consequences (consequentialism)
Leads to 2 teleological philosophies:
- Egoism – right or acceptable behaviour entirely in terms of consequences for the
individual (self-interest)
- Utilitarianism – concern with consequences for the greater good of the greatest number
of people (all those affected by the behaviour)
2.1.2 Utilitarianism
ü Bentham’s utilitarianism:
The principle which approves or disapproves of an action, according to its impact to augment or
diminish the happiness of a party whose interest is pursued
Hedonistic calculus = quantitative aggregation of pleasure/pain
ü Mill’s utilitarianism:
Actions are right in proportion as they tend to promote happiness, wrong as they tend to produce
the reverse of happiness.
Here, pleasure should be “quality-weighted”
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ü Classical utilitarianism:
An action is right if and only if it produces the greatest balance of pleasure over pain for
everyone.
Further Distinction:
- Act-Utilitarianism
An action is right if it produces the greatest balance of pleasure/pain for everyone
- Rule-Utilitarianism (actions of a certain kind)
An action is right if it conforms to a set of rules, the general acceptance of which would
produce the greatest balance of pleasure/pain for everyone
Four elements feature:
1. Consequentialism – only ends matter
2. Hedonism – only pleasure is good
3. Maximalism – greatest amount of pleasure is best
4. Universalism – we consider the aggregate
It considers the greater good, but not necessarily each individual good.
Issue: How do you calculate utility?
- The amount (quality)
- The aggregate (interpersonal comparison)
Disadvantage of Utilitarianism
Everyone has Legal and Moral Rights, Specific and General Rights. A possible problem for
utilitarian theory: these rights serve to protect individual interests against public (aggregate)
interest
2.1.3 Understanding Justice
• Just, right, good, fair are often used interchangeably. Justice inevitably involves a
distribution.
• Relevant to business as economic actions involving an overall improvement in welfare may
be unevenly distributed.
• Moderate egalitarianism (according to Aristotle) suggests to treat like cases alike, rather
than extreme egalitarianism where everyone is treated exactly alike. Example: Difference
in pay is proportional to Difference in say number of hours worked
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Example:
A problem for utilitarian theory: rights serve to protect individual interests against public
(aggregate) interest
But, justice does not require complete equality as in Scheme I!
1. Diminishing marginal utility tends to lead to equality in distribution.
2. Justice dimensions tend to incentivize people to work towards the greater good.
2.1.4 The market
Economic arguments for the market – 3 pillars
1. Private ownership of resources, goods and services
2. Voluntary exchange
3. Profit motive
“By seeking only personal gain, each individual is led by an invisible hand to promote an end
which was no part of his intention..” but...Adam Smith’s Theory of Moral Sentiments assumes
that people hold certain virtues like prudence/benevolence
Problems with Economic arguments for the market
• assumes perfect competition
• assumes rational utility maximizing human behaviour
• assumes that firms seek optimal outcomes
• assumes absence of externalities/spillover effects
• assumes collective choice (aggregating individual rational choices)
2.2 Equality, Liberty
2.2.1 Kantian Ethics
Restores reason to moral life (things we ought (not) to do by virtue of being rational)
Binding moral law - irrespective of consequences/utilitarianism This is deontology
Problem:
How we know which are absolute moral rules?
• Kant’s principle: act only on rules that you would be willing to see everyone follow!
• Moral judgments must be universal (consistency in judgments)
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2.2.2 Deontology
• Deontology focuses on the rights of the individual and on the intentions underlying the
behaviour, not its consequences.
• Believes there are some things we should not do, regardless of the utility derived from them.
• Respect for other people (and ourselves) as rational beings.
• Rationality gives people a greater moral value than anything else!
• This puts greater stress on welfare of every person than in utilitarianism.
2.2.3 Rawls’s egalitarian theory
• Rawls’ justice as fairness embodies Kantian equality.
• Utilitarianism does not seriously account for differences among individuals.
• Questions of justice arise when free and equal persons attempt to advance their own interests
conflicting with other pursuing their self- interest.
Example:
1. Each person has an equal right to the most extensive total system
2. Social and economic inequalities are to be arranged to: a) the greatest benefit of the least
advantaged, and b) the offices/positions open to all under conditions of fair equality of
opportunity.
II and III are worse than I, as B and C are worse off, but IV makes everyone better off.
Example:
Rawls’s difference principle (2a)
• IV is preferable because worst-off persons B and C are better off than the worst-off person in V, VI
and VII
Rawls’s equal opportunity principle (2b)
• In a just society, natural differences should be eliminated to give people equal prospects.
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2.2.4 Libertarianism
Hayek emphasizes individual liberty, property rights and limited government – strong arguments
favouring a market system
• Superiority of spontaneous order – rather than planning
• Advantage of markets in processing information
Nozick’s entitlement theory develops a principle of justice:
• A distribution is just if everyone is entitled to the holdings they possess (need to trace their
history – as long as each transfer of holdings was just, and the original acquisition was just,
then the present holding is just)
- Principle of just transfer
- Principle of just original acquisition
Supports a market system with absolute minimum of government intervention.
Criticisms:
• Some rights (minimum welfare) are at least as important as property rights.
• Not all restrictions of liberty are due to interference by the state.
• The principles are hardly realistic.
2.3 Virtue Ethics
2.3.1 Virtue Ethics Definition
• Teleology and Deontology ask: What actions are right?
• Virtue ethics asks: What kind of person should I be?
• According to Aristotle – ethics enables us to lead successful, rewarding “good lifes,” but
only for virtuous people.
- Concept of virtue
An acquired character trait that manifests itself in habitual action; a state of character;
an admirable trait.
- Listing of virtues (and vices)
Benevolence, compassion, courage, courtesy, dependability, friendliness, honesty,
justice, loyalty....
- Justification of the listing
Virtues are means to happiness, character traits that lead to a good life
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2.3.2 Virtue Ethics in Business
• Move away from “bottom line” thinking and conceive of business as an essential part of the
good life, living well, getting along, having self- respect, and being part of something to
admire.
• Business-related character traits need to be added to familiar personal character traits.
Example:
A typical illustration of virtue ethics in business is whistleblowing, whereby an employee alerts
the outside world to unethical practices within the company they work for. A utilitarian would
argue that the whistleblower needs to assess the consequences of their actions before deciding
to go public. Virtue ethics, on the other hand, requires that the action is based on virtuous
personal behaviour. The list of virtues is as long as the list of duties—a virtue arises if it helps
in building good character. In the case of whistleblowing, the virtue would be the courage to
speak out, the midpoint of the two equally bad vices of cowardice (not daring to speak out) and
rashness (speaking out too quickly). The personal consequences of whistleblowing—being
vilified, losing one’s job, ensuring the company’s future ethical behaviour—do not necessarily
influence the virtuous person.
2.3.3 Strengths of virtue ethics:
• How we think about decisions – morality is not something we think about, but do out of
habit
• Importance of relations in morality – teleology and deontology consider interests of other
impartially, but virtue ethics considers relations
2.3.4 Disadvantages:
• Incompleteness – virtues may fall short
• Conflicting interests – business is about cooperation but also about priorities.
2.4 Relativist – Learning and growth
2.4.1 Definition
• Ethical behaviour is defined by experiences of the individual and group
• Personal growth in emotion, human relationships and character formation – personal moral
development (becoming aware of one’s ethical potential)
2.4.2 Clasification
• Communitarianism
- people are social and can only achieve their moral potential by being part of growing and
developing communities (opposed to the liberal view)
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- Different communities may be expected to develop their own values and moral principles
(known as relativism or particularism)
• Self-interest (ethical egoism)
- Each person should seek their own happiness through a productive independent life in
which their own rational judgment is their only guide.
Managers ought to use insights from all four angles to make balanced ethical decisions
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如果你还想挑战自己，挖掘自己的潜能，体验丰富多彩的留学生活，同时为自己的简历增
色添彩，以下三个岗位长期开放招聘渠道哦～扫码了解报名吧，领航助你 C 位出道～
丰厚的薪资/奖金，优秀的成长培训计划，正规的实习证明与推
荐信，多重课程优惠，还有机会晋升哦～
L I N G H A N G G U O J I
FNCE30009 Ethics 2022 Summer
PASS 不是我们的代言 H1 才是我们的目标
FNCE30009 Ethics in
Finance
第一次课
领 航 国 际
L I N G H A N G G U O J I
FNCE30009 Ethics 2022 Summer
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课程次数 课程时间 课程内容
第一次课 1月13日 21.00-23.30 考试综述 + Lecture 1,2
第二次课 1月20日20.40 -23.10 Lecture 3,4
第三次课 1月26日20.40-22.40 Lecture 5,6
第四次课 1月27日20.40-22.40 L7 & CFA 准则学习
第五次课 2月09日20.40-22.10 CFA 准则学习+刷题课程
第六次课 2月10日20.40-22.10 刷题课程
课程行进过程，难免发生时间变变化，请关注群通知。
考试综述
1. Exam Format
2 hour written online open book exam, held in the exam period at the end of the 5 weeks
去年考试安排
1) Fifteen minutes – reading time (highlighting)
2) Two hours – three questions (25/20/25 = 70 marks) Open Book and English language
dictionary permitted
3) Type the answers in the allotted spaces of the document – font size 12
4) Email/upload your completed exam
5) as a Word document or a PDF.
2. Topics
1. Introduction – Ethics in Finance
2. Theories and Foundations –
business needs; utilitarianism, deontology/Aristotelean ethics, ethical relativism
3. Internal Business Ethics –
loyalty/integrity; whistleblowing; trade secrets; conflicts of interest
4. Corporations and Global Ethics – CSR; governance; international ethics
5. Market Integrity – insider trading; manipulation; self-regulation
6. Duties to Clients/Employers –
loyalty, prudence, care; fair dealing; suitability; whistleblowing, trade secrets
7. Investment Advice and Conflicts of Interest –
due diligence, reasonable basis; communications; fact and opinion; disclosure;
managing conflict
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3. Exam Preparation
• There are 3 Questions...
- based on newspaper stories that relate to one of the topics.
- You need to answer each question based on that topic, ...but you may “cross-over”
into other topics.
• Do not repeat the newspaper story!
• Do not repeat the “Open Book” (it doesn’t have the answer)! But...
• In your own words, your evaluation of the case! ...
• Do not write more than what fits in the allocated space!
• Dot points are fine, but do not forget the explanation (NO yes/no)
第一周课程结构：
1. 道德词汇讲解
2. PPT L1
3. PPT L2
词汇学习
道德基础词汇
Code of Ethics
Standards of professional conduct
Moral principal
Ethical behavior/conduct
Ethics/Morality/Virtue
优秀的品质
Independent Objectivity Transparent
Integrity Honest Trustworthy/trust
Fulfill Responsibility Competence fulfill commitments
Diligence Reasonable basis Encourage
Compromise Erode Protect one’s interest
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道德条款
Conflicts of interests
Material Non-public Information
Priority of Transaction
Preservation of Confidentiality
Diligence and on a reasonable basis
Integrity of Capital Market
Professionalism
Loyalty/Duty to clients & emoloyer
不良行为
Misrepresentation Misconduct Misappropriation
Dishonesty Fraud fraudulent Deceit
Misleading Omission/Omit Market manipulation
Exaggerate violation aggressive
Ethical concerns Moral hazard Discriminate/disadvantage
主题词汇
Effective compliance system/Inadequate procedures
Statutory regulations/ Applicable laws/rules
Disclosure/Disclose/ written conscent/permission
Current/Prospective/ Former clients
Comply with/ Voilate/engage/adhere to
Directors/management/supervisor/supervise/monitor
Investment analysis/recommendations/advice
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Lecture1. Introduction
Overview:
1.1 Introduction to Ethics
1.2 The individual
1.3 Workplace Delimmas
1.4 Dealing with Delimmas
1.1 Introduction to Ethics
1.1.1 Definition
• Oxford Dictionary: ‘Moral principles that govern a person’s behaviour or the conducting of
an activity.’
• Popular understandings: trust, integrity, honesty, good, social responsibility and doing the
right thing.
• Philosophical, the words of Socrates: ‘What ought one to do?’
1.1.2 The banking industry plays a vital role in our society:
- Borrowing and Lending;
- Access to money/facilitates transactions; and
- Fundraising for businesses and infrastructure.
It is essential that the industry is trusted and trustworthy.
High ethical standards needed from the industry, firms and the people working within it.
1.1.3 External Factors:
• Legislation: Banking Act, Anti-Money Laundering and Whistle- blower Protection.
• Industry Regulators and Associations: APRA, ASIC, AFMA, ABA.
• Competitors and peers: ‘best practice.’
• Investors and Shareholders.
• Clients.
• Indices and surveys.
• Economic trends and world events.
• Society and community expectations.
1.1.4 Internal Factors:
• Organisation Type: Publicly listed, Private, Co-operative.
• Management Structure.
• Leadership and role-modelling.
• Environmental, Social and Governance approach.
• Reporting.
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• Values and Code of Conduct.
• Remuneration policies and practices.
• Recruitment and employment policies and practices.
• Risk management: audit and compliance
• Training and performance management.
• Office environment.
1.2 The individual
1.2.1 Challenges to individual integrity
• Being asked to do something that isn’t right.
• Being tempted to do something that isn’t right.
• Feeling a personal conflict about a deal or transaction you are involved in.
• Witnessing bad behaviour.
Such dilemmas can be made worse when you are:
• Time poor.
• Under pressure.
• Unsupported.
• Unsupervised.
• Stressed.
• Fatigued.
• Isolated: not in the head office.
Factors that Influence Individual
• Experience.
• Team.
• Personal Opinion.
• Time.
• Theories, tools and techniques.
• Environment.
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1.3 Workplace Delimmas
1.3.1 Disturbing occurrences in the workplace:
• Moral muteness.
• Limited view of stakeholders.
• Unthinking custom and practice.
• Faking it.
1.3.2 John Knapp’s four categories of corporate self-deception:
1. Tribalism: belief that the company is always right.
2. Legalism: the inability to imagine moral obligations beyond the law
3. Moral relativism: the excusing of unethical practices by viewing business as a ‘game’ and
oneself as a ‘role’.
4. Scientism: the elevation of science, including management science, to a position of
unquestioned authority.
1.3.3 Common Workplace Dilemmas
• Misuse of information: confidential information and disclosure.
• Morality of business deals: environmental issues, gambling, tobacco, alcohol and child
labour.
• Self advancement.
• Exploiting loopholes.
• Being instructed to do something that isn’t right.
• Witnessing bad behaviour.
1.3.4 Ethical Dilemmas & Culture
• Different ways of doing business.
• Bribes and facilitation payments.
• Dealing with superiors.
• Alcohol at work related events.
• Role of women in the workplace.
• Staff entertainment.
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1.4 Dealing with Delimmas
1.4.1 Good Decision-Making
1. What’s the story?
• What are the facts, what are the assumptions?
• What are the understandings?
• Are there any non-negotiables?
2. Voices in the conversation
• Identify the significant stakeholders: what would they want? Do their needs compete? If so,
who would get priority and why?
• Identify major values and principles related to the issue: do any of these compete?
3. Frame the dilemma
• A choice between good options but a decision still has to be made and justified.
• Only poor options available.
4. Generate Options
• Brainstorm the options: be creative, include all ideas, even the ridiculous.
5. Provisional Position
• What is your decision?
• What is your explanation for this course of action? Including ethical, moral, economic and
legal reasoning.
6. Weaknesses in your position
• Can your position be modified either to reduce or eliminate these weaknesses while still
maintaining its overall strength?
7. Final Check
• The ‘Golden Rule’
Putting yourself in the other persons shoes. How would you feel?
• The Mentor/Respected person Test
Would my mentor or someone I respect choose this option?
• Sunlight Test
How would you feel if your decision was made public?
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1.5 Cases
1.5.1 NAB
Summary
• In 2004 “rogue traders” at NAB were discovered as having covered up $360 million in
foreign currency options. They had traded highly leveraged call options on AUD.
Outcome
• The incident was investigated by Australian Federal Police APRA and ASIC.
• The scandal wiped out almost A$2 billion from NAB’s market capitalisation within a few
days.
• Chairman, Charles Allen and Managing Director and Chief Executive Officer Frank Cicutto
resigned, Senior Management were dismissed and the Board restructured.
• Four traders were charged by ASIC, Head of Foreign Currency Options and given gaol
sentences for charges of dishonestly gaining financial advantage.
Integrity/Ethics Issues
• Major gaps in cultural fabric.
• Whistle-blowing and bullying.
• Behaviour or rogue traders and risk management systems.
1.5.2 Société Générale
Summary
• Jerome Kerviel is a trader for French securities firm Société Générale who was charged with
losing more than $7 billion in company assets by conducting a series of unauthorized and
false trades between 2006 and early 2008.
Outcome
• Kerviel was formally charged on January 28, 2009 with abuse of confidence and illegal
access to computers.
• On October 5, 2010 Kerviel was sentenced to 3 years in prison for fraud and breach of trust.
He was ordered to repay €4.9 billion.
Integrity/Ethics follow-up
• Characterised as a ‘rogue’ trader.
• Many have questioned how unauthorised trading of this magnitude could go unnoticed.
• Kerviel claimed the practices were widespread and that making a profit makes the hierarchy
turn a blind eye.
• Kerviel is not thought to have profited personally from the suspicious trades.
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1.5.3 Case 3.
Summary
• Bernard Madoff was responsible for the largest Ponzi scheme in history.
• He presented his clients with false trading reports which he constructed from backdated
information. He used these report to gradually steal from his clients.
• Due to his high status his falsifications were rarely scrutinised.
• High returns which didn’t make mathematical sense led to his exposure
• It was estimated that US$65 billion was misappropriated.
Outcome
• Madoff received a 150 year sentence. (Maximum for all charges)
Integrity/Ethics follow-up
• Since the affair there have been many inquisitions into how it was able to go undetected for
so long.
• The type of investors that Madoff was able to steal from is also of interest.
• Harry Markopolos, Madoff’s whistleblower, had claimed that the Securities and Exchange
Commission (US) had ignored his warnings about the scandal.
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Lecture2. Theories and Foundations
Overview:
2.1 Teleology
2.2 Equality, Liberty
2.3 Virtue Ethics
2.4 Relativist – Learning and growth
2.0 Business Ethics
2.0.1 Business Ethics Definition
• Principles and standards that guide behaviour in the world of business!
• Right or wrong, acceptable or unacceptable behaviour within the organization.
• Determined by (all) key stakeholders.
2.0.2 Ethics and Economics
• In a free market economy, firms optimally allocate scarce resources or factors of
production to produce output. Firms maximize their preferences/utility by producing
output to the point where marginal revenue equals marginal cost. In competitive settings,
this leads to economic efficiency.
• Ethics considers many other reasons beyond maximizing utility.
2.0.3 Ethics and the Law
The government interventionist school of thought assumes that
1. Law prevails in public life and ethics in private life
2. Law is a minimum, ethics is icing on the cake
Both assumptions are flawed, as the legal system reflects ethical positions.
• Well-developed legal systems (within countries) embed ethics within the law for business
conduct.
• Less-developed legal systems (international law) highlight the lack of this embodiment
Why the law on its own is insufficient:
• The law is inappropriate for regulating some parts of business activity
• The law usually lags ethical developments
2.0.4 Business needs ethical leadership
• The law uses opaque moral concepts (e.g. good faith, best effort, due care)
• movingbeyondhiringmoralpeople
• requires strategic planning beyond delegating to subordinates
• key responsibility at the highest levels, including the board of directors
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• requires the development of a corporate culture that values ethics & compliance
• courts, laws and society hold top management responsible for misconduct
2.0.5 Ethic Theories
1) Teleology
2) Deontology
3) Relativist Perspective
4) Ethical learning and growth Virtue Ethics
2.1 Teleology
2.1.1 Teleology
• An act is considered morally right or acceptable if it produces a desired result (pleasure,
knowledge, career growth, self-interest, utility)
• The moral value of behaviour is assessed by looking at its consequences (consequentialism)
Leads to 2 teleological philosophies:
- Egoism – right or acceptable behaviour entirely in terms of consequences for the
individual (self-interest)
- Utilitarianism – concern with consequences for the greater good of the greatest number
of people (all those affected by the behaviour)
2.1.2 Utilitarianism
ü Bentham’s utilitarianism:
The principle which approves or disapproves of an action, according to its impact to augment or
diminish the happiness of a party whose interest is pursued
Hedonistic calculus = quantitative aggregation of pleasure/pain
ü Mill’s utilitarianism:
Actions are right in proportion as they tend to promote happiness, wrong as they tend to produce
the reverse of happiness.
Here, pleasure should be “quality-weighted”
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ü Classical utilitarianism:
An action is right if and only if it produces the greatest balance of pleasure over pain for
everyone.
Further Distinction:
- Act-Utilitarianism
An action is right if it produces the greatest balance of pleasure/pain for everyone
- Rule-Utilitarianism (actions of a certain kind)
An action is right if it conforms to a set of rules, the general acceptance of which would
produce the greatest balance of pleasure/pain for everyone
Four elements feature:
1. Consequentialism – only ends matter
2. Hedonism – only pleasure is good
3. Maximalism – greatest amount of pleasure is best
4. Universalism – we consider the aggregate
It considers the greater good, but not necessarily each individual good.
Issue: How do you calculate utility?
- The amount (quality)
- The aggregate (interpersonal comparison)
Disadvantage of Utilitarianism
Everyone has Legal and Moral Rights, Specific and General Rights. A possible problem for
utilitarian theory: these rights serve to protect individual interests against public (aggregate)
interest
2.1.3 Understanding Justice
• Just, right, good, fair are often used interchangeably. Justice inevitably involves a
distribution.
• Relevant to business as economic actions involving an overall improvement in welfare may
be unevenly distributed.
• Moderate egalitarianism (according to Aristotle) suggests to treat like cases alike, rather
than extreme egalitarianism where everyone is treated exactly alike. Example: Difference
in pay is proportional to Difference in say number of hours worked
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Example:
A problem for utilitarian theory: rights serve to protect individual interests against public
(aggregate) interest
But, justice does not require complete equality as in Scheme I!
1. Diminishing marginal utility tends to lead to equality in distribution.
2. Justice dimensions tend to incentivize people to work towards the greater good.
2.1.4 The market
Economic arguments for the market – 3 pillars
1. Private ownership of resources, goods and services
2. Voluntary exchange
3. Profit motive
“By seeking only personal gain, each individual is led by an invisible hand to promote an end
which was no part of his intention..” but...Adam Smith’s Theory of Moral Sentiments assumes
that people hold certain virtues like prudence/benevolence
Problems with Economic arguments for the market
• assumes perfect competition
• assumes rational utility maximizing human behaviour
• assumes that firms seek optimal outcomes
• assumes absence of externalities/spillover effects
• assumes collective choice (aggregating individual rational choices)
2.2 Equality, Liberty
2.2.1 Kantian Ethics
Restores reason to moral life (things we ought (not) to do by virtue of being rational)
Binding moral law - irrespective of consequences/utilitarianism This is deontology
Problem:
How we know which are absolute moral rules?
• Kant’s principle: act only on rules that you would be willing to see everyone follow!
• Moral judgments must be universal (consistency in judgments)
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2.2.2 Deontology
• Deontology focuses on the rights of the individual and on the intentions underlying the
behaviour, not its consequences.
• Believes there are some things we should not do, regardless of the utility derived from them.
• Respect for other people (and ourselves) as rational beings.
• Rationality gives people a greater moral value than anything else!
• This puts greater stress on welfare of every person than in utilitarianism.
2.2.3 Rawls’s egalitarian theory
• Rawls’ justice as fairness embodies Kantian equality.
• Utilitarianism does not seriously account for differences among individuals.
• Questions of justice arise when free and equal persons attempt to advance their own interests
conflicting with other pursuing their self- interest.
Example:
1. Each person has an equal right to the most extensive total system
2. Social and economic inequalities are to be arranged to: a) the greatest benefit of the least
advantaged, and b) the offices/positions open to all under conditions of fair equality of
opportunity.
II and III are worse than I, as B and C are worse off, but IV makes everyone better off.
Example:
Rawls’s difference principle (2a)
• IV is preferable because worst-off persons B and C are better off than the worst-off person in V, VI
and VII
Rawls’s equal opportunity principle (2b)
• In a just society, natural differences should be eliminated to give people equal prospects.
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2.2.4 Libertarianism
Hayek emphasizes individual liberty, property rights and limited government – strong arguments
favouring a market system
• Superiority of spontaneous order – rather than planning
• Advantage of markets in processing information
Nozick’s entitlement theory develops a principle of justice:
• A distribution is just if everyone is entitled to the holdings they possess (need to trace their
history – as long as each transfer of holdings was just, and the original acquisition was just,
then the present holding is just)
- Principle of just transfer
- Principle of just original acquisition
Supports a market system with absolute minimum of government intervention.
Criticisms:
• Some rights (minimum welfare) are at least as important as property rights.
• Not all restrictions of liberty are due to interference by the state.
• The principles are hardly realistic.
2.3 Virtue Ethics
2.3.1 Virtue Ethics Definition
• Teleology and Deontology ask: What actions are right?
• Virtue ethics asks: What kind of person should I be?
• According to Aristotle – ethics enables us to lead successful, rewarding “good lifes,” but
only for virtuous people.
- Concept of virtue
An acquired character trait that manifests itself in habitual action; a state of character;
an admirable trait.
- Listing of virtues (and vices)
Benevolence, compassion, courage, courtesy, dependability, friendliness, honesty,
justice, loyalty....
- Justification of the listing
Virtues are means to happiness, character traits that lead to a good life
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2.3.2 Virtue Ethics in Business
• Move away from “bottom line” thinking and conceive of business as an essential part of the
good life, living well, getting along, having self- respect, and being part of something to
admire.
• Business-related character traits need to be added to familiar personal character traits.
Example:
A typical illustration of virtue ethics in business is whistleblowing, whereby an employee alerts
the outside world to unethical practices within the company they work for. A utilitarian would
argue that the whistleblower needs to assess the consequences of their actions before deciding
to go public. Virtue ethics, on the other hand, requires that the action is based on virtuous
personal behaviour. The list of virtues is as long as the list of duties—a virtue arises if it helps
in building good character. In the case of whistleblowing, the virtue would be the courage to
speak out, the midpoint of the two equally bad vices of cowardice (not daring to speak out) and
rashness (speaking out too quickly). The personal consequences of whistleblowing—being
vilified, losing one’s job, ensuring the company’s future ethical behaviour—do not necessarily
influence the virtuous person.
2.3.3 Strengths of virtue ethics:
• How we think about decisions – morality is not something we think about, but do out of
habit
• Importance of relations in morality – teleology and deontology consider interests of other
impartially, but virtue ethics considers relations
2.3.4 Disadvantages:
• Incompleteness – virtues may fall short
• Conflicting interests – business is about cooperation but also about priorities.
2.4 Relativist – Learning and growth
2.4.1 Definition
• Ethical behaviour is defined by experiences of the individual and group
• Personal growth in emotion, human relationships and character formation – personal moral
development (becoming aware of one’s ethical potential)
2.4.2 Clasification
• Communitarianism
- people are social and can only achieve their moral potential by being part of growing and
developing communities (opposed to the liberal view)
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- Different communities may be expected to develop their own values and moral principles
(known as relativism or particularism)
• Self-interest (ethical egoism)
- Each person should seek their own happiness through a productive independent life in
which their own rational judgment is their only guide.
Managers ought to use insights from all four angles to make balanced ethical decisions
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如果你还想挑战自己，挖掘自己的潜能，体验丰富多彩的留学生活，同时为自己的简历增
色添彩，以下三个岗位长期开放招聘渠道哦～扫码了解报名吧，领航助你 C 位出道～
丰厚的薪资/奖金，优秀的成长培训计划，正规的实习证明与推
荐信，多重课程优惠，还有机会晋升哦～
