SUMMER FINANCE

INSTITUTE ETHICS

Ethics Guess the

Company?

Integrity and honesty are at the heart of our

business. We expect our people to maintain high
ethical standards in everything they do, both in
their work for the firm and in their personal lives.
Our business is highly competitive, and we
aggressively seek to expand our client
relationships. However, we must always be fair
competitors and must never denigrate other
firms.

Answer Goldman Sachs!

From the Goldman Sachs Business

Principles (Business Standards
Committee, May 2013)

Ethics What are these?

What are ethics?

Where do your ethical beliefs come from?

Is ethics the same as the law?

Family; society; religion; culture

Think of illegal actions you have no ethical
problems doing. Why do your ethics not stop you?
Think of actions you will not take even though
they are legal. What stops you?

Why do we care about ethics?

Does your boss have different standards?

Ethics How do you decide?

How do we decide what is ethical in the

business world?
A variety of ethical tests are available to
help you think about situations
We will look at the following tests:
1.
2.
3.
4.
5.

Golden Rule
Kants Categorical Imperative
Warren Buffetts Front of the Newspaper Test
Peter Druckers Mirror Test
Cost/Benefit Analysis

Ethics Tests

1. Golden Rule: Do unto others as you

would want them to do to you.
2. Kants Categorical Imperative: Could you
live in a world where everyone took actions
like yours?
3. Warren Buffetts Front of the Newspaper
Test: Consider if your act will appear on the
front page of the newspaper read by all
your family and friends with reporting done
by an informed and critical reporter.

Ethics Tests (Continued)

4. Peter Druckers Mirror Test: Is the

action consistent with the kind of person I
want to see when I look in the mirror
every morning?
5. Cost/Benefit Test: Compare the benefits
of the action to you and/or your company
with the costs to everyone (including
your, your family, the community, the
company, your employees, etc.)

Ethics in Business

Are ethical considerations in a business

setting different?
As a manager are you responsible for the
ethical lapses of your employees?
Ex:

Goldman Sachs employees betting against their

own customers

What should you do if a client asks you to be

unethical?
Ex:

Tyco CEO and art dealers

What can you do if your boss is unethical?

Ex:

GE nuclear engineer

Recent Ethical Issues

KV Pharmaceuticals Raised price of pregnancy

drug from $10 to $1500 after awarded
government monopoly
Natural Gas exploration companies Use
fracking method which has environmental
impact without paying for damage caused
Brokers recommending stocks in an efficient
market
Corruption paying government officials for
approval of projects (In U.S. see Foreign Corrupt
Practices Act)