What is Finance?

• At the macro level, finance is the study of financial

institutions and financial markets and how they
operate within the financial system

• At the micro level, finance is the study of financial

planning, asset management, and fund raising for
businesses and financial institutions.

.
 Financial Goals of a Company
• Maximize sales. • Maximize return on
• Maximize cash sales, investment,
flow. equity.
• Maximize market • Ensure earnings
share. stability.
• Maximize profit. • Achieve target
• Minimize costs. goals for sales,
profits, market
share or return.
 Importance of Ethics
The standards of conduct or moral judgment:
• Honesty, trustworthiness, fair dealing are
foundations of sustainable business relations:
– With customers,
– With suppliers,
– With creditors,
– With employees,
– With owners.
• Ethical behaviour is necessary to achieve the goal
of maximizing shareholder wealth.
 Money, How We Get It, and Where It Goes
Accounting, Finance, and Investment Ethics

• “Finance Ethics”
– Financial Markets
• Unfair Trading Practices
• Fair Conditions
• Financial Contracting
– Financial Services
• Fiduciaries and Agents
• Sales Practices
• Financial Services Firms
– Financial Management
• Balancing Competing Interests
• The Level of Risk
• Hostile Takeovers
 Internal Ethical Review
• Are rights of stakeholders being violated?
• Does firm have extra duties to stakeholders?
• Will a decision unfairly discriminate benefits
among stakeholders?
• If stakeholders are harmed, should this be
remedied? How?
• What is the relationship between
shareholders and stakeholders?