{"id":47,"date":"2019-11-01T09:00:29","date_gmt":"2019-11-01T09:00:29","guid":{"rendered":"https:\/\/www.ifg-global.com\/blog\/?p=47"},"modified":"2019-10-31T18:15:14","modified_gmt":"2019-10-31T18:15:14","slug":"reporting-the-numbers-why-ethics-is-good-for-business","status":"publish","type":"post","link":"https:\/\/www.ifg-global.com\/blog\/reporting-the-numbers-why-ethics-is-good-for-business\/","title":{"rendered":"Reporting the Numbers \u2013 Why Ethics is Good for Business"},"content":{"rendered":"\n

In Hollywood, there is no shortage of movies about shady\nfinancial dealings, greedy financiers and associated lavish lifestyles. Characters\nportrayed in blockbusters such as Wall\nStreet<\/em>, The Wolf of Wall Street <\/em>and\nThe Big Short <\/em>are classic archetypes\nof corporate mavericks \u2018gone bad.\u2019<\/p>\n\n\n\n

Who can forget the classic words of Gordon Gekko in the\nmovie Wall Street<\/em>, words now part of\nHollywood legend? In an odd twist of fate, his classic phrase \u201cgreed is good\u201d\nserved as a premonition of what was to become of the world\u2019s financial markets.<\/p>\n\n\n\n

Are\nProfessionals in the Finance Industry More Prone to Ethics Violations?<\/strong><\/h4>\n\n\n\n

While the majority of financial industry professionals\ndon\u2019t fall under the category of a Gordon Gekko or Bernie Madoff, the question\nstill remains. Are people working in the industry more prone to ethics\nviolations and if so, why?<\/p>\n\n\n\n

The catastrophic financial crisis of 2007-2008 had many\ncauses, one of which was the tendency of key players to push the boundaries of\nwhat was considered legal in the industry. At stake was the maintenance of\nefficient and competitive capital markets, a core value of the sector, yet somehow\nthere was a widespread failure by a variety of stakeholders to manage the\nactivities that led to the breakdown.<\/p>\n\n\n\n

A\nStrong Sense of Ethics is Good for Business<\/strong><\/h4>\n\n\n\n

It\u2019s important to consider the nature of the industry\nitself. Money markets are essentially driven by emotion and stock markets are often\ninfluenced by speculation and mass market hysteria. <\/p>\n\n\n\n

In many companies, the pressure to make more is often\nprevalent. Financial products are often quite complex by design, making it even\nmore important for consumers to feel that they are being given the right\ninformation to choose a product that\u2019s right for them. <\/p>\n\n\n\n

Professionals are also exposed to potentially sensitive\nfinancial information on a daily basis. Information that, if not handled\nproperly, could lead to charges of insider trading.<\/p>\n\n\n\n

In the finance industry, a strong sense of ethics is the\ncornerstone to the efficient operation of capital markets. A lack of trust\nbetween peers and\/or companies and their clients means the whole system is\nbroken and the markets fail. Put simply, a strong sense of ethics and adherence\nto governance rules foster a culture of trust between players in the industry.\nThis is good for business both from an internal as well as external\nperspective.<\/p>\n\n\n\n

The\nImportance of Ethical Standards and Corporate Governance<\/strong><\/h4>\n\n\n\n

While there are many examples of financial crises in the\nU.S., Canada is not immune to financial or ethics violations. <\/p>\n\n\n\n

In\n2018, the Deposit Insurance Corporation of Ontario (DICO) took control of PACE\nSavings and Credit Union Ltd. as it investigated governance issues.<\/a> PACE\nwas placed under \u201cadministration\u201d as DICO moved to protect depositors.<\/p>\n\n\n\n

Cannabis producer CannTrust Holdings Inc. laid off 20 per\ncent of its workforce in response to regulatory issues related to unlicensed\ngrowing and possible insider trading. The Ontario Securities Commission is\ninvolved as well as Health Canada who cancelled their license in September. The\ncompany estimated that inventory and assets impacted by the regulatory issues\nwould be about $51 million.<\/a> <\/p>\n\n\n\n

To gain full regulatory compliance, CannTrust said it would\ndestroy about $12 million worth of plants and about $65 million worth of\ninventory. In response to the announcement, the company\u2019s U.S. listed shares\nrose 24 per cent.<\/p>\n\n\n\n

Accountability \u2013 Encouraging Ethics and Transparency<\/strong><\/h4>\n\n\n\n

While it\u2019s important for individuals in the industry to\nmaintain professional and ethical standards, it\u2019s also up to organizations to\npromote and maintain industry wide codes of ethics and behaviour. Should\nsomeone be made aware of unethical activities, nobody wants to be in the\nposition of having to be a whistleblower.<\/p>\n\n\n\n

As a result of the financial crisis of 2007-2008, numerous\nconsumer and protection acts were implemented in the United States including\nthe Dodd-Frank\nWall Street Reform and Consumer Protection Act<\/a>. The\nAct included several components and was designed to promote financial stability\nand protect consumers from abusive financial services practices.<\/p>\n\n\n\n

The majority of Canadian organizations hold financial\nprofessionals to a high degree of ethical standards by publishing guidelines\noutlining ethical standards and governance. Most governing bodies responsible\nfor key financial designations such as CPA\u2019s, CFA\u2019s and CSC\u2019s also publish\ndetailed Codes of Ethics and Standards of Professional Conduct. <\/p>\n\n\n\n

As well, governing bodies such as IIROC<\/a>\nmonitor compliance of regulated firms and their employees on issues related to\nbusiness conduct, financial operations and trading practices. As of June 2019,\nthe Financial Services Regulatory\nAuthority of Ontario (FSRA)<\/a> now assumes regulatory duties of the\nFinancial Services Commission of Ontario (FSCO) and DICO. It regulates\nOntario\u2019s non-securities financial services including insurance, pensions,\ncredit unions and mortgage brokers.<\/p>\n\n\n\n

While not immune to cases of insider trading and shady\nbusiness practices, it\u2019s good to know that overall there is a high degree of\ntrust in the Canadian financial system and the employees that work within it.<\/p>\n\n\n\n

By encouraging and maintaining workplace safeguards\ndesigned to encourage ethical behaviour in the financial industry,\norganizations can continue to lead the way in ensuring fairness and\ntransparency for all stakeholders.<\/p>\n","protected":false},"excerpt":{"rendered":"

In Hollywood, there is no shortage of movies about shady financial dealings, greedy financiers and associated lavish lifestyles. Characters portrayed in blockbusters such as Wall Street, The Wolf of Wall Street and The Big Short are classic archetypes of corporate mavericks \u2018gone bad.\u2019 Who can forget the classic words of Gordon Gekko in the movie […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-47","post","type-post","status-publish","format-standard","hentry","category-clients"],"yoast_head":"\nReporting the Numbers \u2013 Why Ethics is Good for Business | IFG Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ifg-global.com\/blog\/reporting-the-numbers-why-ethics-is-good-for-business\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Reporting the Numbers \u2013 Why Ethics is Good for Business | IFG Blog\" \/>\n<meta property=\"og:description\" content=\"In Hollywood, there is no shortage of movies about shady financial dealings, greedy financiers and associated lavish lifestyles. 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