INTRODUCTION
Background of the study
Overtime a lot has been said about ethics and its influence on management and growth of an organization. Ethical standards are basically referred to as standard principles or theories that encourage trust and fairness in an organization. It can therefore be said to mean the responsibilities of professionals in a corporate organization.
In all sectors of the Nigerian economy ethical standard or professionalism is of immense importance and is therefore required in ensuring organizational productivity and competitiveness which would thereby rub of positively on the economy of Nigeria.
Financial institutions in Nigeria especially banks and similar organizations are more regulated than any other institution, this is as a result of their as financial intermediaries. Banks provide an effective and dependable payment mechanism in the economy; to settle the business, personal transactions, and international responsibility of their customers or clients. However, banks must operate within certain guidelines, either as defined by law, public policy, practice, or convention so as to maintain such prominent or eminent role of providing financial intermediary in the economy. Maintaining such eminent role requires the introduction and the implication of certain “rules” in other to maintain and improve the management and representation of such financial institutions in the economy of Nigeria.
In today's banking industry or any other related industry, the code of ethics and professionalism serves as the foundation upon which banks must make decisions or conclusions based on honesty, integrity, confidence and trust (Sanusi, 2010: 34). An efficient code of ethics provides banks with an understanding and knowledge of what they are expected to do both in terms of responsibilities and behavior. A code of ethics shows the standards and highlights a realistic mode of behaviour that applies to everyone in the organization, in this case the bank, from the board of directors to the lowest level of employees in the bank. The reputation of a bank both interms of productivity and delivering of quality management largely depends on their ethical conduct and professionalism that affects its potential for profit and growth. All levels of bank weeks need to be conscious of the organizations policies regarding ethics in order to make the right decisions in business situations and general management competencies, to know how and when to seek help when faced with ethical dilemmas, and to know where to report possible unethical conduct by any staff of the organization. An effective legislation has been put in place to regulate banking operations and to ensure a fair competitive environment. But regulations and penalties alone are not sufficient to ensure discipline in operations. Therefore, high ethical standards are expected to guide operations in the banking industry (Ali Yidawi, 2005).
While trying hard in achieving profitability, productivity and effective management, banks are expected to obey certain ethical standard principles of banking profession and organizational ethics, which include honesty, integrity, social responsibility, accountability and fairness in business transactions. Most banks do not place much attention to ethics in running organization; more so that banking business has become more complex and the borderline between what is legitimate and illegitimate become more confusing thus encouraging unethical behaviours (Carse, 1999).
Incidentally, ethical values, argued by Hortacsu and Ozkan-Gunay (2004: 45), are still not strongly entrenched and executed in the banking sector. According to Hortacsu and Ozkan-Gunay (2004: 32), and statement made by financial supervisory authorities [Central Bank of Nigeria, CBN] in different fora, many banks are associated with accepting bribes/lobbies in return for loans, lending to connected parties, short changing or cheating customers and engaging in fraud or graft. Frauds and mismanagement compound the ethical problems in Nigerian banks and are leads to the reoccurring distress or liquidation problems in the banking industry. As an ordinary bank customer does not have the opportunity and adequate information to understand banking transactions, as shown by the ethics of disclosure in banking business (Frenkel and Lurie, 2003).
1.2. Statement of the general problem
The incessant problem of poor organization performance in financial organizations like banks and other related organizations has left so much pain on the masses. The incessant case of unethical practices of banks like corruption of all kinds ranging from graft, theft to fraud has led to bank liquidation or distress. This has negatively affected the economy as the financial sector is a critical part of the economy. The poor performance of Nigerian banks when compared to their contemporaries in West African has led to the lack of investment opportunities in the sector which may be one of those that may have led to the current economic hardship currently experienced in the country. In the past, the banking industry in Nigeria has been the most vibrant; contributing immensely to the growth and development of the country but unfortunately these hasn’t been the case in recent times as a result of corporate governance problems where so much finances of the masses have gone down with liquidated banks and the sack and trail of chief executive officers of banks suspected to be in distress. All these have had its toll on the economy of country and may have contributed to the current economic quagmire we have found ourselves in today.
1.3. Aims and objectives of the study
The major objectives of the study are to examine the ethical standard and the quality of management representation in some selected Nigerian banks. Other specific objectives of the study include;
1.4. Research Questions
1.5. Research Hypotheses
H0: There is no significant relationship between business ethics and profitability of Nigerian banks.
H1: There is a significant relationship between business ethics and profitability of Nigerian banks.
H0: Ethical standards do not significantly influence management of Nigerian banks.
H1: Ethical standards significantly influence management of Nigerian banks.
1.6. Significance of the study
The study would be of immense importance to the banking sector on the need for maintaining a high standard of ethical practices. The study would also benefit government at all levels in the implementation of a condusive business environment in Nigeria. The study would also benefit students, researchers and scholars who are interested in making further study on the subject matter.
1.7. Scope of the study
This study is on ethical standards and the quality of management representation in selected banks in Nigeria.
1.8. Definition of terms
Ethics: The basic concepts and fundamental principles of decent human conduct. It includes study of universal values such as the essential equality of all men and women, human or natural rights, obedience to the law of land, concern for health and safety and, increasingly, also for the natural environment
Graft:Graft is the personal gain or advantage earned by an individual at the expense of others as a result of the exploitation of thesingular status of, or an influential relationship with, another who has a position of public trust or confidence. The advantageor gain is accrued without any exchange of legitimate compensatory services.
Fraud: Financial fraud can be broadly defined as an intentional act of deception involving financial transactions for purpose of personal gain.
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