Click to turn non annotations with hypothes.is

“The Ethical Financier does not lie, cheat, steal, or tolerate those who do.”
– The Ethical Financier Honor Code

We need finance professionals
who hold themselves
and each other
to the highest standards of
moral, ethical, and legal conduct.

Please watch this video before you decide this is too idealistic and doomed to failure.


BernardMadoff (1)
Bernie Madoff, Financier: Yes, Ethical: No

Laws control the lesser man… Right conduct controls the greater one.
 – Mark Twain

Financiers are people who make money in finance.

An ethical financier is a financier who also cares about doing the right thing.

Some  financiers ask themselves:

  • Is what I am about to do in my own interests? If it is then…
  • Can I sell it? If yes, then…
  • Is it legal? If not, then…
  • Can I get the laws changed? If not, then…
  • Can I do it in a jurisdiction where the laws are different? If not, then…
  • Is it worth the risk to break the law? If caught then…
  • Can I pay a fine without admitting guilt.

By way of contrast…

Before doing something, an ethical financier asks:

  • Is it moral? If not, then I won’t do it.
  • Is it ethical? If not, then I won’t do it.
  • Is it legal? If not, then I won’t do it.
  • Is it in a customer’s best interests? If not then I won’t sell it.
  • Is it in my interests? I don’t have to do things that aren’t in my best interests, but my interests come last, not first.
  • Can I sell it? If I can’t convince others that it is worth doing a moral, ethical, legal thing that is in their best interests then I won’t waste my time.
  • Ethical financiers are not infallible, and whether they catch themselves or someone else catches them doing something wrong, ethical financiers admit their guilt, make reparations, ask for forgiveness, and ask themselves: How can I serve as a lesson for others?

Some financiers are unsavory:

  • Whether caught or not, they claim that they are moral, ethical, and always comply with all applicable laws and regulations because some people will believe anything.
  • To prove how good they are, they “give back” large sums of money to charitable organizations that don’t care how the money was made or that they took too much in the first place.
  • They minimize their risk by shielding themselves from personal liability.
  • They blame their employer or regulators for not stopping them from doing bad things.
  • If that doesn’t work, they blame their employees.
  • They do not make it clear who they are or what they stand for so that they cannot be called out as hypocrites.
  • They say they don’t state the rules they live by out of modesty rather than because they don’t have any rule other than: “Me first.”
  • They never admit guilt.
  • They never apologize.
  • They never ask for forgiveness.
  • They have active imaginations, and they imagine they are unquestionably virtuous.
  • As a last resort they plead insanity. (Frankly, there might be merit in that claim because sociopaths can be classified as insane. But sociopaths should be kept away from power, not excused when they abuse it.)

Ethical financiers behave honorably:

  • They do not claim unequivocally that everything they do is moral, ethical, and legal because they might be overlooking something.
  • They say they aspire to be moral, ethical, and legal and they act accordingly.
  • They say what their morals are.
  • They say what their ethics are.
  • They say which laws apply to them and which do not.
  • They say that because they are human you must not trust them without question but instead they ask you to be vigilant in auditing their behavior and calling them out when they stray.
  • They know regulators exist to keep other people beyond their control from doing bad things.
  • However, they know they must regulate themselves to an even higher standard than required by law.
  • They catch their own mistakes and admit them readily.
  • They cooperate with all parties when a problem occurs, and they are diligent in the pursuit of the truth and the assignment of responsibility.
  • When something could have been their responsibility then they usually assume that it was.
  • They understand that the more things that could be their fault then the more important they are, and people who always hold themselves blameless are often more of a liability than an asset.
  • When they do harm they apologize, make amends, and ask for forgiveness.
  • They put everything at risk: their fortunes, their reputations, and their honor. Ethical financiers go on record saying who they are and what they stand for.
  • If they cannot live up to the standards of an ethical financier they they give up being a financier altogether rather than continue in the business as an unethical financier.
  • They do not strive to be moral and ethical only when it is convenient but all the time in all their dealing.
  • They are members of a community and they help their fellow ethical financiers live up to the highest standards.
  • They have active imaginations and they imagine they might inadvertently do something immoral, unethical, or illegal so they question their own motives and behavior and ask others to do the same.

Ethical financiers are not to be confused with “financial engineers” who do not deserve to be called engineers until they hold themselves to the standards of moral, ethical, and legal accountability that real engineers hold themselves to.

However, ethical financiers look to engineers for guidance on how to serve mankind while living up to the highest moral, ethical, and legal standards of behavior and accountability.

Above all, ethical financiers care, because if they care they can figure out the rest and if they don’t care then it doesn’t matter.

If you care about this problem then will you help us create a new generation of ethical financiers.

If you want to tell us something then please use this form: