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Assignment on Business Ethics (Solved)

   

Added on  2021-06-16

11 Pages2398 Words53 Views
BUSINESS ETHICS 1BUSINESS ETHICSName:Institution:Course:Date:1

BUSINESS ETHICS 2Table of ContentsBusiness ethics............................................................................................................................................31.0 Introduction...........................................................................................................................................32.0 Background Information.......................................................................................................................33.0 Summary of the news article (“Trust deficit”)......................................................................................43.1 Key ethical issues identified from the news article...........................................................................43.2 Analysis of the ethical issues identified.............................................................................................54.0 Appropriate ethical decision making.....................................................................................................65.0 The ethical decision-making process...................................................................................................76.0 Conclusion.............................................................................................................................................9References.................................................................................................................................................10Appendix...................................................................................................................................................112

BUSINESS ETHICS 3Business ethics1.0 Introduction Financial services industry has great importance for the development of any nation. However, the industry is also prone to unethical conducts by the directors, management and other stakeholders in the complex governance of the industry. This paper aims at discussing the ethical issues in relation to financial services industry with regards to the article by ABC news onfinancial institutions “trust deficit”, analyzing the appropriateness of ethical decisions made in the article and outlining ethical decision making process with regards to the most relevant ethicalphilosophies in the context of the article. 2.0 Background Information ASIC provided the Code of Banking Practice and the Credit Union Code Practice. These codes deal with the aspects of fees disclosure, terms and conditions changes, guarantors’ rights and debt collection (Pearson, 2009). The banking practice code stipulates that it is illegal and unethical for banks to overly charge its clients or charge clients for services not delivered. The promotion of financial products based on commissions, rather than their respective benefits to the client has seen the financial services industry dominated by conflict of interest, an indication of poor governance. Therefore, financial planners have an ethical duty to provide honest information, transparency, and duty of care and to avoid self and conflicting interest in delivering financial services (McDonald, 2014). 3

BUSINESS ETHICS 4 3.0 Summary of the news article (“Trust deficit”) Revelation by royal commission on financial services shows lack of trust in the banking institutions in Australia, due to widespread unethical and unlawful practices in these institutions. These unethical practices include charging fees where the law does not provide it, poor transparency, self-identification and disclosure levels as far as identification, reporting and dealing with ethical issues in the industry is concerned. Profit maximization has become the key focus of the financial services companies, forgetting that they are in charge of managing another people’s money. For instance, by the Commonwealth Bank charging fees on dead customers and AMP and other big banks charging clients for services not rendered. Among its recommendations, Royal commission suggested cooperation with the commission from the financial services industry, ASIC strengthening its remedial measures to include making lawsuitsagainst the concerned institutions and elimination of brokerage commission in order to avoid conflict of interests, as ways to deal with the situation. In the article, ASIC is criticized by the Royal Commission on the basis of the actions it takes and the adherence to eliminate unethical practices in the financial services industry. The commission suggests the use of court orders to prosecute those involved in unethical malpractices in this industry, instead of the negotiations undertakings, considering the repetitive cases of illegal conducts that have been experienced in this industry that have contributed to trust deficit. 3.1 Key ethical issues identified from the news article Australian Securities and Investment Commission (ASIC), identified the specific ethical issues in the Australian market in relation to financial services planning and provision as: emphasizing on product selling rather than tailored advice; recommendations to shifting to paying the financial planners high commission without considering the benefits to the clients and4

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