Asked by YUEYING HUANG on May 07, 2024

verifed

Verified

Should investors be concerned about the ethics of the firms in which they invest? Why or why not? If most of investors worry about it, how will that affect corporate behavior?

Corporate Behavior

The actions, strategies, and practices of companies in pursuit of their business goals, affecting stakeholders internally and externally.

Ethics

A set of moral principles that govern the behavior of individuals or organizations and guide decision-making and conduct.

  • Differentiate between moral and immoral investment behaviors.
  • Acknowledge the importance of ethics in corporate governance and its impact on investor decisions.
verifed

Verified Answer

GH
Gillian HarmonMay 10, 2024
Final Answer :
Should is a subjective term. Students will be divided on the issue. If most investors did concern themselves with the ethics of the companies in which they invest, it would incentivize managers to act ethically. Acting unethically would drive investors away from the stock pushing its price down.