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What can be the relationship between ethical problems in business and shareholder value? Ethical problems in business are usually not created by Management, so there
What can be the relationship between ethical problems in business and shareholder value? Ethical problems in business are usually not created by Management, so there is no significant relationship between ethical problems in business and shareholder value. If a publicly-held corporation has management and employees who violate generally accepted standards of ethical behavior, then this could lead to common stockholders losing confidence in management's ability to serve their interests, and this could lead to a lower demand for the stock, and thereby, a lower value/price for the stock. According to the most recent research: stock prices are inversely proportional to reported ethical problems within the Management ranks of a publicly-held company.
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