Initial question: Select a publicly traded firm of your choice that enjoys a large shareholder base. What challenges may this firm have encountered (or is likely to encounter) in terms of (a) incorporating ethics into financial management practices, and (b) maintaining/sustaining ethical practices in the face of internal or external (market) pressures? What would you do if you encountered an unethical situation at work? Frame your response relative to the financial manager’s fiduciary duty to maximize shareholder’s wealth.
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I chose Five Point Holdings, LLC as the publicly traded firm that currently is 66.5 millions outstanding shares. FivePoint is the largest owner and developer of communities along the California coast with locations in LA, OC, and SF.
In regards to challenges that FivePoint may encounter in terms of ethics into financial management practices, generally flows from the CEO and CFO. The decisions that they have made and will make in the future stem from their core values and will be their guide in making decisions in situations in which require an ethics display. Those two members of the company set the example for the rest of the staff members to respond similarly in ethical situations. Changes in top executives can lead to a change in ethical behavior based on their direction and behavior. With FivePoint, the top executives have not changed. Institution a maker/check concept is a great way to ensure that each employee recognizes their ethical responsibilities by establishing transactions to go through more than just one individual. Controls such as this can restore and maintain the ethical behavior within a company.
To maintain ethical practices within a company like FivePoint, top management must be clean and clear in their approach to financial decisions. A strong value system is a strength much needed by a CFO and top executives. To make tough decisions in times of conflict with expectations and ethics, even when job and reputation are on the line. The weight of making and maintaining the right ethical practices does fall on the top finance executives, and thus it is important that these individuals have a high value system.
Ultimately when it comes to an unethical situation that stands against my core values at work as a financial manager, I would first seek counsel from the board of directors on the matter. If the solution for the matter still did not align with my values, I would be prepared to walk away knowing that I mad the right decision.
Market Watch. (2018, October 1). Five Point Holdings LLC Cl A. Retrieved from https://www.marketwatch.com/investing/stock/fph
Securities and Exchange Commission. (n.d.). S-11/A. Retrieved fromhttps://www.sec.gov/Archives/edgar/data/1574197/000119312517133435/d302947ds11a.htm
Respond to the bold part. Make sure it is 200 words, apa and uses at least one reference.