Back to: Financial Management
Hello, class! Welcome to our final week of the semester. It’s been a great journey exploring the world of financial management with you.
As we round things off, today’s discussion goes beyond figures and formulas—it focuses on the values and responsibilities that guide financial decisions. Our topic is Ethics and Social Responsibility in Financial Management.
Let’s begin with a question: Is it enough for a business to just make profit? The answer is no—not anymore. Today, businesses are expected to act ethically and be socially responsible. That means doing what is right—not just what is legal or profitable.
Ethics and Social Responsibility
What is Ethics in Financial Management?
Ethics refers to the principles of right and wrong that guide human behaviour. In financial management, ethics involves making decisions that are honest, fair, and respectful to all stakeholders—this includes customers, employees, investors, government, and the community.
Some examples of ethical financial behaviour include: – Not manipulating accounts to hide losses or inflate profits
– Being transparent with shareholders and investors
– Avoiding insider trading or using confidential information unfairly
– Paying taxes properly and on time
– Not misusing company funds for personal gain
Unethical financial behaviour may not always be illegal—but it can damage trust, ruin reputations, and even collapse businesses. In Nigeria, we’ve seen cases where corruption, fraud, or poor ethical standards have harmed the economy and discouraged investment.
As future business leaders and financial managers, you must understand that your decisions will affect many people. That’s why ethics should always be part of your thinking, not just afterthoughts.
What is Social Responsibility?
Social responsibility means that businesses should also care about the society and environment in which they operate. It’s about giving back, acting fairly, and making choices that help people—not just profits.
In financial terms, this might involve: – Supporting local communities through donations, training, or infrastructure
– Avoiding business activities that harm the environment or exploit workers
– Ensuring fair wages and good working conditions
– Providing accurate information to customers and investors
– Reducing waste and using resources responsibly
A company that pollutes a river just to save costs is not being socially responsible—even if its profits increase. Likewise, a business that lays off hundreds of workers without proper compensation is damaging society.
More and more, people want to do business with companies that care about ethics and social values. Investors are also looking at a company’s ESG performance (Environmental, Social, and Governance). These are now major factors in global business and finance.
The Role of Financial Managers
As a financial manager, your role is not only to manage money wisely but also to protect the company’s integrity and reputation. You may be faced with pressure to “cut corners” or hide information. That’s where your values must guide your actions.
Always ask yourself: – Is this decision honest and fair? – Who will be affected, and how? – Am I being transparent? – Will I be proud of this choice if the public finds out?
Ethical managers help build businesses that last—because trust is the foundation of all financial relationships.
Real-Life Nigerian Context
In Nigeria, where we face challenges like corruption, poverty, and environmental concerns, ethical financial management is more important than ever. Businesses must not only obey laws but also lead by example. Whether it’s by supporting youth employment, helping farmers, or promoting clean energy, businesses can be a force for good.
Government regulators like the Financial Reporting Council of Nigeria (FRC) and the Securities and Exchange Commission (SEC) are now putting more pressure on companies to follow ethical standards and report their activities honestly.
Conclusion
In closing, ethics and social responsibility remind us that business is not just about numbers. It’s about people, society, and doing what is right—even when no one is watching. As you grow in your careers, never forget the importance of integrity. It is one of the most valuable assets you can have.
Thank you for being a part of this course. I hope the knowledge you’ve gained will guide you both professionally and personally. Remember: a successful financial manager not only manages resources—but also builds trust, inspires confidence, and acts with responsibility.
Until we meet again in another course or future session, I wish you all the best in your exams and beyond!