Ethical Problem to Make a Loan

any in banking operated ethically through this crisis. The great majority of community banks did not make sub prime loans as they believed it was an ethical problem to make a loan they did not believe the borrower had the capability to pay back. They were willing to forego the big profits they would have made making these loans and then selling toA CEO's job is certainly to maximize profits for shareholders. But, a what expense? Is everything fair game as long as it involves both making money and the likelihood of getting caught low?

Most companies operating for the long term choose an ethically sound business practices. Most have codes of moral conduct in place. This practice may cost them some earnings in the short term but allows for a strong reputation translating into a corresponding healthy long term business strategy.

How about another tough question: how generous should a company be to their community? Some shareholders believe the company should not give a dime to any community or charitable organization. They believe it is up to the shareholders to determine what to do with their dividends and equity. Others believe a company does have an obligation to support, in some manner, the community or communities in which they operate. This discussion can make for healthy tension in the boardroom. I am familiar with this debate as a former public company CEO. I believe in the power of the free market, investing in communities and the the importance of transparency and ethical behavior.

The government's fraud charge against Goldman Sachs brings 'ethics versus profits' under the spotlight providing a great opportunity for public education. This case will no doubt be one for the ages in business schools. the likes of Goldman and others.