The Association of Chartered Certified Accountants has released a new report urging businesses to focus more on their ethical responsibilities and prioritize the recruitment of senior executives and financial staff with strong ethical compasses.

The ACCA report, “Risk and Reward – Tempering the Pursuit of Profit,” examines where the financial system went wrong prior to the financial crisis, especially the failure of many people to act ethically.

“The financial crisis has highlighted serious ethical failings,” said Paul Moxey, ACCA’s head of corporate governance and risk management and one of the authors of the report. “Businesses of all kinds, including the banks, have been increasingly policed by reams of rules and regulations. But we have seen during the crisis that, despite all these regulatory requirements, or perhaps because of them, individuals exploited gaps.’’

The paper argues that a strong commitment to ethical business conduct on the part of directors and key staff can be a strong line of defense against reputational damage and should be an essential part of any risk management strategy. The report recommends that businesses ensure a strong ethical culture by setting the right tone at the top and exercise a sense of ethical responsibility, not just comply with external rules.

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