Banking, in common with other areas of finance, is often considered an amoral field focused purely on risk and return. However, ethics does have an important role to play, both traditionally and as business and banking evolve. Based on a speech to a European Union conference on financing small and medium–sized enterprises (SMEs), this paper seeks to provide an overview of ethics in banking using three terms. Integrity is important to generate the trust necessary for any banking system to flourish, (...) responsibility highlights contemporary banks’ need to take into account the consequences of their lending policies, and affinity refers to a set of relatively novel ways in which depositors and borrowers can be brought closer together than they are in conventional western banking. (shrink)

Due to several recent scandals, Business Ethics is now firmly embraced. Whereas in the 1980s and early 1990s there were serious doubts expressed about combining ethics and business, the link now seems to have become self-evident. Fundamental questions about the tensions between business and ethics however continue to receive little attention. In this paper, based upon a debate concerning the Fair Trade company, the strains between business and ethics are analyzed. The article shows how several great thinkers have already considered (...) this tension. Three ways to conceptualize the tension between business and ethics have been distinguished, and these are outlined in the paper. In one approach, ethical entrepreneurship, value tensions are perceived as a source for entrepreneurship. However, this approach presupposes pluralistic ethics. Thinking only in terms of black and white is seen as blocking the ability to adequately handle the tension between business and ethics. Opting for ‘‘ethical entrepreneurship’’, as by Fair Trade, has fundamental and important consequences for the company’s communication policy. (shrink)

Socially responsible investment (SRI) has increasingly assumed a major role in global equity markets. In this article we argue that the continued growth in investors seeking to align their ethical concerns with their investment strategies may influence the way in which the employment relationship is managed in publicly-listed corporations. After tracing the historical development of SRI, its implications for the conduct of human resource management (HRM) are examined. We conclude by analysing a number of the key problems associated with investor (...) confidence in SRI funds and present a range of suggested techniques for improving screening methodologies. (shrink)

"Social capital" can be considered to be the product of co-operationbetween various institutions, networks and business partners. It haspotential as a useful tool for business ethics. In this article weidentify categories pertinent to the measurement of social capital insmall and medium sized enterprises (SMEs). By drawing on three differentsectors, one business-to-business service, one business-to-customerservice, and one manufacturing, we have enabled the consideration ofsectoral differences. We find sector to play an important part inrelation to business practices and social capital. Our inclusion (...) of SMEsfrom Germany and the United Kingdom has called attention to cultural,institutional and economic aspects of two regions of Europe and how theycan influence SME social capital. Social capital is found to beinfluenced by context and, in particular, institutional arrangements. Inanalysing the data we note particular areas of interest from the pointof view of SMEs and social capital as being: formal engagement,networking within sectors, networking across sectors, volunteerism andgiving to charity, and finally a focus on why people engage. We concludethat there is a considerable amount of further research needed on socialcapital, SME''s and business ethics. (shrink)

This paper reviews the development of socially responsible investment (SRI) over recent years and highlights the prospects for an increasingly strong connection with the practice of corporate social responsibility. The paper argues that not only has SRI grown significantly, it has also matured. In particular, it has become an investment philosophy adopted by a growing proportion of large investment institutions. This shift in SRI from margin to mainstream and the position in which institutional investors find themselves is leading to a (...) new form of SRI shareholder pressure. Although this bears some resemblance to lobbying campaigns which might take advantage of shareholder rights, we seek to distinguish it as an important phenomenon in its own right — one to which corporate executives are likely to be paying increasing attention in the years to come. We further argue that this approach potentially meets some of the earlier ethical criticisms of certain forms of SRI but, ironically, probably owes its existence to those pioneering approaches. We conclude with some suggestions for further research to inform discussion of the issues highlighted in the paper. (shrink)

This paper empirically examines the financial performance of a UK unit trust that was initially “conventional” and later adopted socially responsible investment (SRI) principles (ethical investment principles). Comparison is made with three similar conventional funds whose investment objectives remained unchanged. Analysis techniques employed in previous studies find similar results: mean risk-adjusted performance is unchanged by the switch to SRI, with no evidence of over-or under-performance relative to the benchmark market index by any of the four funds. More interestingly, changes in (...) variability of returns over time are also modelled using generalised autoregressive conditional heteroscedasticity models, not previously applied to SRI funds so far as is known. Results show a temporary increase in variability of returns, followed by a return to previous levels after around 4 years. Evidence shows the increased variability to be associated with the adoption of SRI rather than with a change in fund management. Possible explanations for the subsequent reduction in variability include the spread of corporate social responsibility activities by firms and learning by fund managers. In addition to reporting on a previously unobserved phenomenon, this paper raises questions for further research. (shrink)

This paper is a response to Ray's recent proposal that the intellectual property rights attached to potentially life saving/life sustaining innovations should become public goods in cases where markets are either unable or unwilling to pay for the creation of the intellectual property. Using a free market approach to innovation based on Western moral philosophy, we suggest that treating intellectually protected life saving/life sustaining innovations as public goods will likely reduce social welfare over the long term.

During the past twenty years, there has been an explosion of new interest in entrepreneurs and their activities. Yet only recently has serious research attention been devoted to the ethical problems encountered by entrepreneurs and their organizations. Entrepreneurs face uniquely complex moral problems related to basic fairness, personnel and customer relationships, distribution dilemmas, and other challenges. This essay surveys contemporary research in entrepreneurial ethics, examines the kinds of ethical dilemmas entrepreneurs confront, identifies major research topics and methodological approaches, and discusses (...) possible directions for future research. (shrink)

In this article, we document the growing influence of non-governmental organizations (NGOs) in the realm of socially responsible investing (SRI). Drawing from ethical and economic perspectives on stakeholder management and agency theory, we develop a framework to understand how and when NGOs will be most influential in shaping the ethical and social responsibility orientations of business using the emergence of SRI as the primary influencing vehicle. We find that NGOs have opportunities to influence corporate conduct via direct, indirect, and interactive (...) influences on the investment community, and that the overall influence of NGOs as major actors in socially responsible investment is growing, with attendant consequences for corporate strategy, governance, and social performance. (shrink)

The socially responsible investment industry (SRI) is slowly changing from a screening, avoidance paradigm to a comprehensive paradigm that seeks to affect corporate behavior. Credible rating systems are a key component of this sea change. Reliable and recognizable social and environmental metrics are critical to this progress. The Total Social Impact (TSI) rating approach is a new social metric scheme based on a comprehensive rating of stakeholder issues. This paper describes the evolution of SRI ratings and the role that TSI (...) hopes to play in affecting business behavior by promoting principled business leadership. (shrink)

The socially responsible investment industry (SRI) is slowly changing from a screening, avoidance paradigm to a comprehensive paradigm that seeks to affect corporate behavior. Credible rating systems are a key component of this sea change. Reliable and recognizable social and environmental metrics are critical to this progress. The Total Social Impact (TSI) rating approach is a new social metric scheme based on a comprehensive rating of stakeholder issues. This paper describes the evolution of SRI ratings and the role that TSI (...) hopes to play in affecting business behavior by promoting principled business leadership. (shrink)

How can we develop a global economic architecture which is efficient, morally acceptable, geographically inclusive, and sustainable over time? If global capitalism -- arguably the most efficient wealth-creating system known to man -- is to be both economically viable and socially acceptable, each of its four constituent institutions must be both technically competent and buttressed by a strong moral ethos. Leading thinkers in international business and ethics identify the pressing moral issues which global capitalism must answer.