I have been reading an interesting article on ethical values and credit crisis ( one of my preferred topic these months) today and wanted ton comment what I consider the most important aspects of it:
The article is on a research document which has been prepared by Antonio Argandoña, a professor in IESE business school. He defends the idea that social responsibility practises among financial companies would have muffled the current crisis.
He thinks than more than the financial product themselves, the lack of control and regulation of the financial system are the root of the problem. As examples of manipulations, he mentions the abolition of the Glass-Steagall Law or the promotion of sub-prime mortgages by estate sponsored companies.
A special case is the high remunerations to directives and financial analysts, which was according to Argandoña a “ imprudent behaviour and a pattern of bad government” as “it did not predict the evil incentives which were generated”.
Cases as Bernard M. Madoff do not tell about the importance of the crisis and its dimensions, but about the the idea that affirms that the cause has been the lack of regulation: an scenario of euphoria produced by extraordinary benefits make the tentation for fraud much stronger specially if controls are very lax.
Lack of transparency: Lack of clarity, hiding and distortion of information to clients, regulators and share-holders are clear signs of lack of morality and legality.
Argandoña wonders if the Company Social Responsibility (CSR) might have avoided the crisis. According to Argandoña, CSR is a number of moral responsibilities assumed by the directive of a company in order to seek excellence in his professional activity before oneself and before the others.
CSR would have brought to the financial euphoria some:
– Professionalism
– Prudence
– Loyalty.
– Solidarity: responsibility towards the common good.
– Trust
Argandoña concludes that CSR would have changed the consequences of the crisis if a good number of agents had acted with this ethical responsibility.
And I add now.....: too serious? who says that ethical behaviours are boring? IWell, I think that it is mentality fo the school yard, if you go deep and it is true that doing things right make you enjoy broader in life as you get interested with both simple and sophisticated stuff, you appreciate not just material but spiritual things: music, nature, art, friends... and make you sleep deeper at night.
As a matter of consequences.... I just cannot say more than you can observe yourselves, individualism and exacerbated capitalism brings loneliness, depression, lack of motivation... or not?
By your Maria in a Saturday afternoon
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