What Is a Financial Obligation?

Financial ethics refers to the sum of ethical rules and ethics that enterprises refer to when conducting financial activities and handling financial relationships under a certain social and economic foundation and moral environment.

Financial ethics

Right!

Financial ethics refers to the sum of ethical rules and ethics that enterprises refer to when conducting financial activities and handling financial relationships under a certain social and economic foundation and moral environment.

Chinese name

Financial ethics

Foreign name

Financial ethics

Features

Financial characteristics

Features

Ethical characteristics

1. The ethical characteristics of financial ethics. ^[1]

According to the level of financial subjects, financial ethics can be divided into two levels: organizational financial ethics and personal financial ethics. ^[2]

1. Financial ethics helps to make up for the shortcomings of financial laws and regulations, and is the basis for the formulation of financial related regulations. ^[2]

1. The technical nature of financial theory ^[2]

1. Ethical analysis of corporate financial goals ^[2]

Traditional business theory holds that the primary purpose of an enterprise's existence is to serve shareholders. Enterprises are only a means to achieve the purpose of increasing shareholder wealth. The obligation of an enterprise manager is to do its best to create the greatest profit for shareholders within the scope prescribed by law. According to this view, the interests of shareholders are paramount, above all other interests.

However, these views are also being challenged. This challenge is based on two different considerations.

The first consideration is that although shareholders are legally owners, they are often speculators who have no real interest in the long-term development of the business. Their benefit is to get the maximum return from their investment-even if this return causes damage to the long-term development of the company. As soon as corporate stocks fall, they will sell them and divert their investments elsewhere. In the final sense, running an enterprise for such shareholders will definitely hurt the company's existence. Moreover, since a large number of stockholders hold their stocks in the form of mutual funds, investment plans or insurance policies, they do not even know which company they own.

The second consideration is that although shareholders are technically owners and have certain powers, including the right to maintain the company's good operations, there are still some people who have a closer relationship with the company and profit more from it. Take greater risks for the company's continued existence and success. Therefore, this view holds that in the operation of the company, not only the shareholders but also all the stakeholders of the company are considered. The company does not operate for shareholders only, but for all stakeholders. Obviously, company employees can benefit greatly from the company. Employees of the company contribute their time and energy, wisdom and creativity to the companies that pay them. Without them, there will be no company. When making decisions that affect them, companies should consider them.

Stakeholder views do not deny that managers have an obligation to generate as much return as possible for shareholders. But it realistically interprets this approach as maximizing returns in the long run, and it is consistent with fulfilling its obligations to all stakeholders. Fundamentally, maintaining employee loyalty to the company helps to increase production capacity, meet customer needs and thereby increase sales, thus increasing profits.

2. Stakeholder Analysis Model

The more familiar model for analyzing enterprises is the "shareholder model", which mainly focuses on the financial and economic relations of the enterprise, and mainly focuses on quantitative analysis. On the contrary, stakeholder analysis is a qualitative analysis, which mainly studies actors. Stakeholder analysis includes both economic and non-market factors that affect organizations and individuals, such as ethical, political, legal, and technical interests. Stakeholder management is based on ethical codes that force companies to coordinate trust relationships with corporate stakeholders and shareholders: Corporate behavior is to maximize the benefits of corporate customers, employees, suppliers and shareholders; Respect and satisfy the rights of these stakeholders.

Stakeholders are "people or groups who can influence or be affected by organizational behaviors, decisions, policies, activities, or goals." The primary stakeholders of a business include business owners, customers, employees, and suppliers. In addition, corporate shareholders and the board of directors are also vital to the survival of the company and are therefore first-level stakeholders. The CE0 and other senior management personnel of the enterprise can be stakeholders, but in stakeholder analysis, they are usually used as the protagonist and corporate representative. Secondary stakeholders include all other interest groups, such as the media, consumers, governments, competitors, the public and society.

The ethical basis of stakeholder management is that the goal of maximizing corporate profits is subject to social justice. This justice refers not only to individual rights, but also to all groups that have an interest in corporate affairs. In essence, companies are not just "economic The subject also has social responsibility. Therefore, corporate behavior "should" be responsible to society, not only because it is the "right thing", but also to ensure the legal status of the enterprise itself.

Stakeholder management puts forward a set of analysis framework, so that analysts can outline the relationship between the company and relevant groups, and rationalize these relationships, so as to achieve a "win-win" cooperation program. Here, "win-win" means that the company's decision-making meets social justice and fairness standards and benefits all relevant groups.

Stakeholder analysis is only an analytical method, not a prescription for ethical theory, and there is no "built-in" ethical code. The ethical thinking in stakeholder analysis is to ask: "What is fair, fair, equal, and beneficial for those who influence business decisions and those affected by business decisions? From the perspective of strength and influence, who is Vulnerable stakeholders? Who can, who will, and who should help vulnerable stakeholders, communicate their voices, and encourage them to participate in decision-making processes and results? "Finally, stakeholder analysis requires the companies concerned to clarify their concerns to stakeholders, etc. Moral responsibility and fulfillment of responsibility.