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Business Ethics: How to Judge the Boss?

Two major areas of public concern in Britain are executive pay and corporate tax avoidance. The first of these sometimes relates to high bonuses paid to managers who may be following bad business ethics.

One example of this relates to mis-selling of financial products. Often bank customers do not need insurance and other financial products inappropriately sold to them. However, some bank workers stand to lose a significant proportion of their income if they fail to hit sales targets. The bonus system which encourages this maximisation of profit goes all the way up to the top of the organisation. I would suggest that it is the framework of incentives set by top management which reinforces a dishonest culture.

Another example of bad business ethics, in the UK’s finance industry, is the way consumers who are investing money in ISA’s and pension funds face a minefield of hidden charges and thus are being left seriously out of pocket because of shady practices. There are all sorts of things that many fund managers charge for that are not included in the total management fee that they advertise.

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