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In Search of Honesty and Altruism
Abdul Rahim Mousa, Rania
Abdul Rahim Mousa, Rania
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no27-mousa.pdf
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"Ethics in general is concerned with human behaviour, which is the acceptance or ‘right’, or non-acceptance or ‘wrong’, based on conventional morality. General ethical norms encompass truthfulness, honesty, integrity, respect for others, fairness and justice. They relate to all aspects of life, including business and finance. Financial ethics is therefore a subset of general ethics. Ethical norms are essential for maintaining stability and harmony in social life, where people interact with one another. Recognition of others’ needs and aspirations, fairness, and co-operative efforts to deal with common issues are examples of aspects of social behaviour that contribute to social stability. In the process of social evolution, we, as human beings, have developed not only an instinct to care for ourselves but also a conscience to care for others. Situations may however arise, in which the need to care for ourselves runs into conflict with the need to care for others. In such situations, ethical norms are needed to guide our behaviour. As M. Dempsey (1999) puts it: ‘ethics represent the attempt to resolve the conflict between selfishness and selflessness; between our material needs and our conscience’. Ethical dilemmas and ethical violations in finance can be attributed to an inconsistency in the conceptual framework of modern financialeconomic theory and the widespread use of a principal-agent model of relationship in financial transactions. The financial-economic theory that underlies the modern capitalist system is based on the rationale of profit maximisation, whereby individuals become self-centred, and aim to maximise their own profits and serve their own interests. The principal- agent model of relationships refers to an arrangement whereby one party, acting as an agent for another, carries functions on behalf of that other. Such arrangements are an integral part of the modern financial system, and it is difficult to imagine it functioning without them."(pg 41)
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2007
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