Question

Please write a brief essay regarding the ethical responsibilities financial managers have in relation to the firm's stakeholders. (Consider such questions as, "Are all stakeholders equally important?", "What should be done when the financial manager's best interests may not align with those of the firm's stakeholders?", and "How can financial managers be held accountable for making the right ethical decisions?")

at least 500words

Answer 1

Although financial managers have a direct responsibility towards their clients and management supervisors but also holds an indirect responsibility towards each of the stakeholders such as government, bankers etc. They are given the responsibility to run the business in transparent and profitable way.

Companies do have written code of ethics for their financial managers and employees. These codes prohibits them from undesirable acts such as to act in fraudulent way and follow unfair practices such as involvement of child labors. It's very much essential for them to follow these principles on a daily basis with the ultimate objective to protect the stakeholder's interest. Financial managers must be honest and maintain integrity.

Avoiding conflicting relationship is also necessary for the financial managers. They must present the picture accurately and in a more transparent way. They should report to the management in case they see violation of the code.

Financial managers must act for the benefit of their stakeholders and not their own. Managing the stakeholder's interest must be in an ethical manner. And in this and they should always follow integrity. For financial managers feel pressure from management for fraudulent reporting then they must whistle blow it. Under no circumstances they are allowed to follow unethical practices.