This lesson explores the philosophical foundations of ethics and how to apply them to complex dilemmas in financial services.
2.1 What is Business Ethics?
Ethics is a system of moral principles that guide right and wrong behaviour. Warwick University’s module explores three major approaches:
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Consequentialist (e.g., Utilitarianism): The ethical choice is the one that produces the greatest good for the greatest number. In banking, this might mean prioritising decisions that benefit the largest number of stakeholders.
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Deontological (e.g., Duty-based ethics): Ethics are based on rules and duties, regardless of consequences. This aligns with the idea that bankers have a fundamental duty to treat customers fairly.
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Aristotelian (Virtue ethics): Focuses on the character of the individual and what a virtuous person would do.
The University of Exeter module requires students to “differentiate between a range of theories and approaches to ethical thinking”. These frameworks are essential for navigating real-world ethical dilemmas.
2.2 Ethical Decision-Making Models
Ethical decision-making is often supported by structured models. The Professional Diploma in Leading Cultural Change and Ethical Behaviour includes “case-study sessions focusing on… ethical dilemmas”. A common model is the “Five C’s” or CPRA model, often used in regulatory and compliance contexts. These frameworks help to:
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Identify the ethical issue
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Gather relevant facts
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Evaluate alternative actions using ethical theories
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Make a decision and test it (e.g., “How would I feel if this decision was made public?”)
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Act and reflect on the outcome
2.3 Challenges in Ethical Decision-Making
Common obstacles include “organisational pressures and ethical fading”, where ethical considerations are gradually ignored under pressure to meet targets. Cognitive biases such as “group think and over confidence” can also lead to poor ethical decisions. The ability to reflect on and overcome these challenges is a key professional skill.