Financial Reporting and Ethics - The Institute of Chartered ...

FINANCIAL REPORTING AND ETHICS11.7 STAKEHOLDER RELATIONSHIPSThe stakeholders of corporations and boards have earlier been identified anddiscussed in paragraphs 6.5 and 6.5.2 of Chapter 6. The relationships betweenthem are expected to be of collaboration and symbiosis. The interdependencewhich exists can be likened to the mutual co-existence between plants andanimals. An example of the area of interdependence is that plants requirecarbon dioxide which animals breath out, to photosynthesise for their growthand survival. Animals, including human beings, exchange the carbon dioxidewhich they breath out for the oxygen which plants release.11.7.1 Robert H. Frank (1988) in his book “Passions Within Reason: The StrategicRole of the Emotions,” says that by being generous to people and actingout of fairness one will be exhibiting or exuding emotional traits aswarmth and sympathy which tend to germinate of their own seedparticularly among the parties to whom kindness has been shown. AsProfessor Frank highlights, even a baby whose consciousness and horizonare yet to develop can distinguish between genuine smile and frown.Experts in the field of Ethics say that nice, benevolent and helpful individualsare the people that many others will like to associate with. They observefurther that each time a person disregards the convenience of otherpeople that individual tends to reduce the importance of his own wellbeingfor others and the strength of the bonds which can bring themtogether. Professor Elegido (1996) states that being so inconsiderate is“cutting oneself from other human beings.”11.7.2 There are ethical rules of behaviour or principles that stakeholders, justas other members of the human race, should embrace, to safeguard theinterdependence spirit. The ethical rules include the following:(a)The Rule or Principle of FairnessWhatever standard or benchmark of behaviour which one appliesin judging one’s own actions should be the same measure to beused in reference to others. The principle accords with the advicewhich is often given in secular life that you should “put yourselfin his position.” However, the principle of fairness does notprescribe that everybody should be treated in the same way, aslong as one has a reason for effecting discriminating considerationthat would also be logical if other people were affected. Theillustration given below depicts a scenario.220