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Why are ethics important?

1 min read

This is from my path I used for upper level classes, but it is equally true here:

Business, indeed life, is built on relationships. Consider the Nexus of contracts. An organization is in many ways just a interwoven web of contracts and relationships between various stakeholders: employees, customers, suppliers, and investors.

The best I can sum up ethics is to do what you say you will. Be fair. Increase transparency. If these relationships are not build on trust, the lack of trust will lead to higher transaction costs, lower revenue, and higher costs. Put another way, your reputation is one of, if not the, biggest assets you have. That reputation can be lost in a matter of seconds. Indeed, ethical breakdowns can be one of the largest risk factors firms have. Don't believe me? Look at Enron, Adelphia, and many many many other firms that were destroyed by a lack of ethics.

Act ethically. My biggest piece of advice to you.

Create systems that don't lead to temptation.

If you find a problem, tell people about it.

Protect your reputation.

Look out for everyone. It will not only help you, but also your shareholders.

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