Technology brings novel ethical considerations to the finance profession, but case studies can help MBAs and finance professionals understand the gravity of issues in this area, says Raef Lawson
Rather than shareholder primacy, corporations would lead in the interests of all stakeholders, including customers, employees and communities, according to a new ‘Statement on the Purpose of a Corporation’ released by the Business Roundtable, an association of CEOs in the US, in August 2019.
Is this empty rhetoric, or the genuine reflection of a changing business mentality? Whether this shift in purpose comes to pass is pure conjecture, but what is indisputable is that accounting and finance professionals need to revolve their business strategies around prescribed codes of ethics, regardless of whose interests are prioritised.
Technology brings ample opportunity for ethical lapses
This extends all the way from chief financial officers to entry-level professionals, as digital technologies have enabled each of these groups to occupy roles with greater responsibilities in unfamiliar territories. Gone are the days when accountants and business professionals poured over spreadsheets and plugged in numbers; they all now need to be proficient in developing strategic and technological skills.
The influx of new digital technologies into the finance sphere provides ample opportunity for ethical lapses, and these lapses have the potential to be much broader in scope than previous episodes of misconduct. The tenor of corporate scandals in finance has shifted dramatically, as cybersecurity and data privacy have emerged as leading issues dominating the news cycle. With the influx of novel ethical considerations that are tied to new digital technologies, such as questions over which kinds of digital information are confidential, the challenge of behaving ethically only increases.
Practicing professionals who have been in their careers for several years may struggle to address the ethical considerations of technology in finance. This makes understanding the ethical components of the profession and the risks of digital technologies all the more important for Business School students and recent MBA graduates. They are uniquely positioned to manage the ethical issues that arise from managing new technologies and handling data, given the introduction of required teaching in these areas. Indeed, as Business Schools have become increasingly aware of the growing role of technology and analytics in finance, they have responded accordingly by introducing courses that address these areas. Some Business Schools also now offer MBA degrees with a focus in information technology or technology management, allowing students to attain the competencies necessary for success as modern financial professionals.
Ethics education matters
As ethics permeates every aspect of accounting and finance, so too must it factor into any curriculum that teaches business students how to manage technology. Technology and data ethics should be incorporated into existing courses rather than just in a business ethics course, as this will enable students to consider the role ethics plays in relation to their standard curriculum. Coverage in a variety of subjects will also allow for deeper understanding and higher retention among students, as the importance of ethics will be reinforced across the curriculum. If Business School students progress through their graduate education without comprehensive instruction on how ethics figures into the current business environment, they will tend to disregard the importance of ethics in business, according to a 2010 study from Cubie Lau at University College Dublin’s College of Business.
Presenting ethical challenges and codes of behaviour in practical, realistic settings is the pathway to helping MBA students and finance professionals understand the gravity of ethics in business.
In an attempt to craft realistic scenarios in which ethical lapses may arise – and to which Business School students must respond – the Institute of Management Accountants (IMA) invites academics and professionals at all levels to participate in an annual case writing competition that works to develop and distribute teaching cases centred around business ethics.
The Carl Menconi Ethics Case Writing Competition aims to increase awareness of ethical issues in today’s business environment among students, as well as to provide educators with the opportunity to synthesise ethical situations and help students better understand these situations through teaching material. It also provides a publishing opportunity for the winning case author, via the IMA publication, Strategic Finance.
Ethics-oriented case writing
Central to previous winners of the case competition has been references to the IMA’s ‘Statement of Ethical Professional Practice’ (SEPP), a set of guidelines IMA members must commit to and abide by in their careers. These guiding principles of honesty, fairness, objectivity and responsibility can be teachable tools for educators and students. But, here are some other tips for how to put together a winning ethics case submission, alongside further information on the competition’s criteria.
- Submit a case focusing on business ethics, with specific application to management accounting and finance issues.
- Real-world cases are preferred, but fictional cases, especially those with some basis in practice, will be considered.
- Cases should not merely be ‘number crunching’ exercises but should also require interpretation of data in a decision-making context.
- Cases can be designed for introductory, upper-level or post-graduate courses.
- Use situations that challenge your abilities to determine the right thing to do, carry out effective ethical action, or lay out an effective strategy for avoiding ethical obstacles in the future.
- Cases should normally end with a summary of the overall problem, or issue being faced, and the decision-making role of the student.
The deadline to submit for the competition is 26 January, 2020.
Raef Lawson is Vice President for Research and Policy, and Professor-in-Residence at the Institute of Management Accountants (IMA). He co-sponsors the Menconi Competition alongside the IMA’s Committee on Ethics and holds an MBA from NYU Stern School of Business.
