9 Do ethics play a critical role in the financial managers g

9. Do ethics play a critical role in the financial manager’s goal of shareholder wealth maximization? How are the two related? Is the establishment of corporate ethics policies and guidelines, requiring employee compliance, enough to ensure ethical behavior by employees?

Solution

Ethics play vital role in financial managers goal of shareholder wealth maximisation. The major reasons are

Yes. Establishment of all ethical policies, compliances can be made practise only by ensuring ethical behavior of employees. The ethical behavioral quality provieds a natural trait of being more complied to the system and alogned to certain policies which is demanded by that paricular organisation. The colloborative effort of all employees is required to successfuly establish such policies and their input and proper feed back is required for successful practise or execution of policies in an organisation.