Ethical practice in business is easy enough to define, in a narrow sense, as adhering to and promoting accepted principles of right and wrong that govern the conduct of a company or professional office bearer. With the notable illustration of Enron, where all levels of the organisation seemed infected by unethical practices, sound ethical practice requires participation – and even leadership – from all ranks within a company. (See Minimise Risk by Maximising Accountability). It would be rare where the CFO does not occupy a focal point of that leadership. CFOs do far more than tend to finances and financial reporting and, increasingly, CFOs have a hand in a company’s strategic direction, providing a representative face to investors and the media. They are increasingly becoming an image of the guardians of company financial controls as well as occupying a role in disseminating ideas and attitudes on ethical practice throughout the business.
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The challenge for CFOs is that in most cases they are not charged with strategic responsibility and often responsibility is couched in the context of the board as a whole or as part of the loosely termed , member of the “executive.” There is little doubt that regardless of this formal relationship to strategic responsibility, most CFOs place strong importance on ethical values at a personal level, with one CFO summing up the situation by saying “If a member of my staff was involved in an ethical transgression, I would feel accountable for it too.”
Corporate governance is concerned with holding the balance between economic and social goals and between individual and communal goals. The governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship of those resources. The aim is to align as best as is humanly possible the interest of individuals, corporations and society at large.