Business Ethics
Is it possible for a company to have good business ethics and make profit? According to Corporate Ethics and Corporate Governance by Zimmerli, Richter, and Holzinger, (2007) Milton Freidman states that a business can only achieve good business ethics when it compromises its sole motive of making profit. For example, by reducing a company’s carbon footprint, the company must pay for expenses that it otherwise wouldn’t have had to pay. However, I beg to differ. I believe that there are ways companies can exhibit good business ethics without making expenditures.
Insert, IEX and Brad Katsuyama. When Katsuyama founded IEX, his goal was to create a stock exchange that was fair to everyone. In an age where seconds mean millions of dollars, businesses that were located closer to the various stock exchanges in New York benefited greatly while those that were located further away lost out on millions.
Image 1: The importance of Milliseconds (New York Times)
Realizing this unfair advantage some businesses had over others, Brad Katsuyama set out to create an exchange that would be fair to all businesses. His efforts culminated in the founding of IEX, the Investor’s Exchange, in 2013. What differentiated IEX from the other stock exchanges was how it delayed data transfer by 350 microseconds for everyone. Over the years, Brad Katsuyama’s revolutionary approach to how people trade stocks has gained steam and is shown through the increase in IEX’s market share. Since January 2014 to July 2016, IEX has seen its market share go from 0.131% to 1.58%. That’s an approximately 1200% increase in a short span of 30 months!
Business ethics isn’t something that has to be quantifiable. You don’t have to spend money or lose out on potential profits to display how your business displays good ethics. You can be an honest, fair company and still exhibit good business ethics. And IEX is a concrete example on how it has achieved good business ethics by creating a sense of fairness for all.
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IEX Trading. (2016). Statistics. Retrieved September 9, 2016 from https://www.iextrading.com/stats/
Lewis, M. (2014). The Wolf Hunter of Wall Street, The New York Times. Retrieved September 10, 2016 from http://www.nytimes.com/2014/04/06/magazine/flash-boys-michael-lewis.html
Zimmerli, W., Richter, K., Holzinger, M. (2007). Corporate Ethics and Corporate Governance.