|
|
|
|
CONTRIBUTORS:
|
|
|
ORGANIZATION:
|
|
|
PUB TYPE:
|
Discussion Group
|
|
SUBJECT(S):
|
Business, Economics, Philosophy
|
|
DISCIPLINE:
|
Business/Management
|
|
HOMEPAGE:
|
http://www.iese.edu
|
|
LANGUAGE:
|
English
|
|
MODERATED:
|
Yes
|
|
PUB ID:
|
103-446-045
(Last edited on
2008/10/29 11:31:11 GMT-6)
|
|
DESCRIPTION:
Professor Kevin T. Jackson, an expert on legal and ethical studies, speaks at recent Continuous Education Program at IESE in Barcelona, Spain during a session on October 2, 2008.
In his presentation, Prof. Jackson states that the most valuable long-term asset that market participants have is their reputation. This is something that many market participants in the recent financial crisis have been neglecting at their peril. The only way for the market to effectively reinstate itself is by rebuilding trust. Ultimately, it is by honorable contract that companies earn their place in the world.
The subprime mortgage, in and of itself, was a good product; it allowed many people who wouldn't normally be eligible for credit to get that all-important first foot onto the property ladder. Instead, it was the way in which the mortgages were sold that was grossly flawed. Homebuyers were duped by unsuitable mortgage arrangements; the risks presented by non-transparent financial products and unsecuritized debt were obscured by vague and indecipherable legalese while rating agencies engaged in momentous conflicts of interest.
Honor and virtue are engaged in the market via reputational rewards and reputational sanctions that are much more effective in shaping a firm's conduct. This is borne out by the fact that, in the wake of the recent high-profile business scandals, legal sanctions account for only an extremely small percentage of the total costs incurred. Market participants suffer far more from the business and clients they lose as a direct consequence of their tarnished reputations.
|
|
|
|
STATISTICS
|
|
Click on # to view
|
|
Citations
|
|
0
|
|
Comments
|
|
0
|
|
Comments
|
|
0
|
|
Quality
|
|
0/0.00
|
|
Interest
|
|
0/0.00
|
|
View(er)s
|
|
1/94
|
|
|
|
|
|
|
| Prev |
Next |
|
