Application of Transparency Principle in Business Ethics

Medium Principle Questions Apply Principle

In a recent development regarding ethical business practices, a prominent organization has adopted the principle that transparency in financial reporting is essential for maintaining public trust. This principle asserts that organizations should disclose all relevant financial information to stakeholders in a timely and accurate manner. Adhering to this principle ensures that the organization operates with integrity and accountability.

Based on this principle, consider the following scenario: A corporation is found to be withholding information about a significant drop in profits from its investors, with the intention of avoiding a negative impact on the stock price. If this corporation were to apply the principle of transparency, what would be the most appropriate action for them to take?

Continue withholding the information since it may cause panic among investors.

Publicly announce the profit drop in a comprehensive report to its stakeholders.

Only share the information with major investors but keep it private from the public.

Issue a press release claiming that profits have actually increased.

Delay the announcement until after the next quarterly report is issued.

Hint

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