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By Sharon BrownFull-Time Faculty, School of Business
than a decade after the Enron, WorldCom, and Tyco scandals in the early 2000s,
ethics is still a hot topic in accounting. Ethical stewardship is defined as a
“higher level duty of governance in which the motivations of the manager are
based on pro-organizational rather than self-interest behavior” (Caldwell,
Hayes & Long, 2010, p. 501). The concept of stewardship means that the
leader of an organization has a responsibility to maximize profits of the
company to the benefit of the stakeholders and society as a whole.
is fraught with ethical decisions that have to be made on a daily basis. Ethical stewardship means that the leadership of the
organization, including the CFO and CEO, has a responsibility to do the best
job they can for the business. If the leadership acts responsibly, the company
does well and therefore the stakeholders and employees should do well also.
In order to maximize profits, the
leadership of a company should include employees in the goals of the
organization in order to make them more accountable. When employees are
included, they are empowered and take ownership of their tasks, which in most
cases allows them to work harder and smarter and in turn allows the company to
maximize profits. Ethical stewardship is a very important concept; it seems simple
but can be difficult to put into action within a company. Employees may not be
fully vested in the success of the company and therefore may struggle in making
decisions that meet the goals of the company while meeting personal objectives
at the same time.
Leadership has to be open,
honest, and ethical in communication with employees in order to empower
employees. I agree with Caldwell et al. that the responsibility of leadership is to build and maintain values that are
focused on achieving the mission of the organization. In ethical
stewardship, leaders of the organization have a responsibility to pay attention
to the organization and the way it operates and interacts within the community.
Leaders of the organization should be loyal in terms of working hard and using
the company resources to their fullest.
The focus should be on doing the right thing. Board members need to hold
themselves, and each other, to high standards of ethics and stewardship. Doing
that is more a matter of careful thought than subtleties of interpretation. In my opinion, the purpose of incorporating ethical stewardship into a
company's culture is to make sure that the organizational values are shared and
supported by all levels of a company. This method of operation can improve the
ability of the organization by building trustworthiness into the philosophy of
We encourage you to share this article if you learned anything (#TIL) or found this useful information.
If you are interested in other financial career insights, we invite you to take a look at Kaplan University's Center for Excellence in Financial Services and our Career Moves site, each of which periodically publish new articles and other content on this subject.
Interested in this career? Check out Kaplan University's accounting resources here.
Hayes, L. A., & Long, D. T. (2010). Leadership, trustworthiness, and
ethical stewardship. Journal of Business Ethics, 96(4), 497-512.
Sharon Brown is a full-time
faculty member at Kaplan University. The views expressed in this article are
solely those of the author and do not represent the view of Kaplan University.
By Cynthia Waddell, PhD, CPA, CFE
By Geoffrey Vanderpal, Full-Time Faculty
By Richard Carter, PhD
By Stanley W. Self, CFE
By Jerry Taylor
By Rachel Byers, Full-Time Faculty, School of Business
Accounting firms are taking advantage of some emerging trends.
Change is the name of the game in wealth management!
Most people do not realize there are a variety of jobs in this field.
According to the BLS, employment of insurance sales agents is projected to grow.
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Kaplan Real Estate Education's Toby Schifsky looks at the factors to consider when pursuing a real estate career.
Toby Schifsky talks about the importance of goals and action steps for achieving them.
Access preparation and practice advise from Kaplan Financial Education experts Mary Orn and Julie Ramsey.
Maylee talks about her experiences with Kaplan Financial Education and preparing for her exams.
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