1. Ethics. In some countries, such as Japan and Germany, corporations develop close long-term relationships with one bank and rely on that bank for a large part of their financing needs. In the United States, companies are more likely to shop around for the best deal. Do you think that this practice is more or less likely to encourage ethical behavior on the part of the corporation?
2. Ethics. Is there a conflict between “doing well” and “doing good”? In other words, are policies that increase the value of the firm (doing well) necessarily at odds with socially responsible policies (doing good)? When there are conflicts, how might government regulations or laws tilt the firm toward doing good? For example, how do taxes or fees charged on pollutants affect the firm’s decision to pollute? Can you cite other examples of “incentives” used by governments to align private interests with public ones?
3. Ethics. Look at some of the practices described in the Finance in Practice box on ethics disputes in finance. What, if any, do you believe are the ethical issues involved?