Ethical Principles in Corporate Financial Management: A Literature Study on Investment and Risk

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Published: 2023-07-16
Keywords:
Ethics, Financial management, Conflict of interest, Decision making, Risk management, Organizational culture, Accountability

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Arif Rachman Putra
Sunan Giri University of Surabaya, Indonesia
Samsul Arifin
Sunan Giri University of Surabaya, Indonesia

Abstract

The application of ethical principles in corporate financial management is a crucial aspect that influences the integrity of investment decisions and the effectiveness of risk management. This study examines the challenges faced by companies in internalizing ethical values into financial practices through a systematic literature review approach. Based on an analysis of various scientific sources, it was found that conflicts of interest between managers and shareholders, weak organizational culture, inconsistent internal supervision, and external pressure from the market are the main obstacles to the consistent application of ethical principles. The lack of accountability, global regulatory dynamics, and limited ethical awareness within organizations further complicate the application of ethical values in financial decision-making. This study emphasizes the need for a multidimensional approach in building a strong ethical framework within companies, including ethical leadership, continuous training, and a transparent and integrity-based accountability system. Thus, ethics is not only a normative discourse, but also a strategic foundation for sustainable and responsible financial management. These findings make an important contribution to the development of corporate financial ethics theory and practice.

Article Details

Issue

Vol. 3 No. 2 (2023): Journal of Social Science Studies (JOS3)

Section

Articles

How to Cite

Putra, A. R., & Arifin , S. . (2023). Ethical Principles in Corporate Financial Management: A Literature Study on Investment and Risk. Journal of Social Science Studies, 3(2), 221-226. https://jos3journals.id/index.php/jos3/article/view/275

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