What Ethicality Means: And Why It Is Important To Investors
Ethics is a broad concept that covers your principles, morals, and values. Everyone is encouraged to apply ethics in their daily lives.
Ideally, they are guiding principles for your behavior to help you make the right choices contributing to everyone’s good. For instance, ethics guides you to keep a promise, tell the truth or help someone.
As a business leader, you are responsible for shaping your business’s ethical culture and influencing your community. And since ethicality is a concept within ethics, let us first define what ethicality means.
What Ethicality Means
Ethicality is associated with being ethical. It is what guides a person who makes a lot of ethical choices. Your actions need to be in line with the highest ethicality principles. Religions have a golden rule: treat other people how you want to be treated. Modern humanistic approaches may vary in thought processes and rules but still hold that ethicality is about being nice to others.
Why Ethicality is Important to Investors
These days investors are looking for investment opportunities in companies whose principles and values align with their personal beliefs. As such, investors are always looking for businesses that present themselves as ethical. At its core, ethicality is about kindness. So, an investor will choose to invest in a company because of their product’s ability to improve their customers’ quality of life rather than one that produces a toxic product.
In addition, an investor may consider how a business treats its employees. For instance, they should pay them well and consider their rights. Furthermore, an investor can invest where a company works to make profits for its investors rather than defraud them. Such information is available if you know where to look.
In addition, an investor can invest in a company because of its corporate social responsibility initiatives. For instance, the business may offer a free service to better the community’s lives. Ideally, any programs to better the lives of the community may be what an investor guided by ethicality looks for. However, they shun companies that hurt their employees, customers, and community. When a company chooses to behave ethically, it sets itself up for success by drawing ethical investors. Investors pursuing ethicality create an ethical portfolio that comprises only ethical companies
However, other investors believe that behaving ethically is in our own self-interest. They believe that what goes around comes around. For instance, a company can make handsome profits but cause more harm than good to the community, customers, and employees. While this is a profitable investment, it is unethical. It creates value inside your portfolio but destroys value in other aspects of life.
Ethicality guides an investor toward making the right investment decisions. With the rise of ethicality in investing, businesses are changing their management and business practices to win the hearts of ethical investors. Also, ethical investors with stock ownership that allows them to vote can use their voting power to change company policy to push it in a socially responsible path. What ethicality means, then, is that an ethical investor can make society more ethical by changing a company.