Biz ethics vital for inclusive development

Proper implementation of business ethics in organizations can ensure maximization of lawful profits and effectively protect the interests of all stakeholders.

This eventually can ensure a viable and competitive business environment, Chairman, Securities Exchange Commission, Tilak Karunaratne said. He said although most of the business chambers, professional bodies and similar organizations in Sri Lanka have codes of ethics or codes of conduct, they expect the members to follow, seldom have they taken any action against members for not conforming to these ethics. Ethics are important for the well-being of an organization.

It is very important that organizations practice business ethics to ensure good governance in their organizations, he told a group of Junior Chamber members. “When we talk of business ethics we cannot ignore the importance of ethics in capital markets which is a source that fuels business activities. As the person heading the organization entrusted with the duty of regulating the capital market of Sri Lanka, I will be failing in my duty if I do not address this important aspect,” Karunaratne said.

Excerpts:

“In the stock market we expect market stakeholders to inculcate professionalism and ethics in all their dealings to foster trust.

Trust is the livewire of confidence and as all of you are aware, market confidence provides the impetus for the development of a robust and efficient stock market.

“We experienced how the market had to pay dearly during 2010/2011 period due to the actions of few people who resorted to unethical and downright scandalous methods of manipulating the market. “It is with great concern and distress I reflect on how attempts were made by again a few investors, stockbrokers, investment advisors and even influential politicians to transform the market to a casino during the previous regime. Market manipulation was the talk of the day.

“In the process, a large number of innocent and ignorant small-time investors who followed the herd instinct got ruined and we are still in the process of giving some redress to these investors. These unethical behaviour patterns were well grounded on unlimited greed and power politics.

“The rainbow revolution paved the way towards an ethical dimension and perspective. Since January 2015, our Commission along with the Secretariat has been committed towards creating a conducive environment to foster ethical behaviour in the market through policy, regulation and enforcement.

“A great deal of emphasis is placed on uplifting professionalism in the industry through continuous training, investor awareness etc. These initiatives are geared at ensuring a regulatory and governance framework that reinforces a culture of accountability and integrity.

“The importance of political commitment and suitable policy in fostering ethical investing cannot be undermined. However, it is equally important to note that ethics cannot simply be subjected to regulation as it usually emanates from ‘within’ a person. The ethics learned at a young age are usually maintained through adulthood and put into practice in daily lives.”