Christmas Day, marked as a religious holiday or cultural phenomenon, is a time to reflect. The question "What would Jesus do?" has merit, whether you are of Christian faith or not. For investors and the people who advise them, a poignant guide to answering that question can be found in the November/December issue of the Financial Analysts Journal. Your New Year's resolutions will be better after you read "Ethical Decision Making: More Needed Than Good Intentions." Thanks to the CFA Institute, which publishes the journal, you can obtain a free copy by visiting chicagotribune.com/business and clicking on "Financial Analysts Journal: Ethical Decision Making." The article by Robert Prentice, professor of business law at the McCombs School of Business at the University of Texas, applies recent findings from neurology and psychology about how people make investment decisions. Prentice takes the research a step further, to the question of how investors and their advisers make moral decisions. Prentice acknowledges upfront that his school supplied many of the individuals who aided and abetted his most glaring example of an ethical black hole: Enron Corp. But fresh ethical challenges emerge every day, including the current sleaze surrounding the subprime mortgage mess. The solution to slippery ethics, Prentice writes, can be found in the same skills that make people long-term winners as buyers and sellers of financial products. Winners have the ability to anticipate and to imagine acting contrary to their initial instincts. Winners know the sound of their own rationalizations and know how to challenge themselves before acting. Courageous investors pre-script themselves on how to act when a challenging situation arises. "Heroic acts are generally performed by ordinary people who exercise vigilance, determination, self-reflection and a little courage," Prentice writes.
Ethical Decisions in Business World a Contrary Notion