Do Publicly Traded Companies Owe Ethical Duties to Their Investors Beyond Making a Profit?

Business Ethics

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Do publicly traded companies owe ethical duties to their investors beyond making a profit?

The most imperative ethical duty, of publicly traded companies to its investors, is making profit so as to increase the value of their shareholders. However, the publicly traded companies owe ethical duties beyond making profit. This is because if companies focus more on increasing the wealth of its shareholders, it may lead to the neglecting of other imperative stakeholders in the company. For example, if company reduces the employees' wages so as to maximize profits, this is unethical which culminates into mitigation of employees' morale. This leads to poor performance of the company which may affect the investors. In addition, a company should focus on corporate social responsibility, which has the probability of improving the company's image which can attract even more investors and enhance the success of the organization. This is because most investors are concerned will the long-term returns (Rogers, 2012).

In the business world, is there a difference between what is fair and what is ethical?

In business, what is fair is not necessarily ethical. This is because there are some ethical situations in business, one cannot define what is wrong or right since both approaches may have desirable outcome. Therefore, one who is caught up in such a situation also known as the "gray" area, the decision that one may come up with may be ethical but not fair to another party. Businesses are always faced with ethical dilemmas and the decisions made are not always fair (Rogers, 2012).

Has information learned in this class challenged your ideas about business and ethics?

The information learnt in class has challenged my ideas about business and ethics in that I thought that ethics revolves only on what is legal. However, I have established that ethics encompasses on more than that since other questions of what is right or what is balanced are imperative questions in business ethics.