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> The author seems to have made up his mind already. The reason banks don't allow marijuana companies to setup accounts is regulatory and risk management relate

by exelius 12y ago

> The author seems to have made up his mind already. The reason banks don't allow marijuana companies to setup accounts is regulatory and risk management related, not ethical. I seem to keep having to say this, but I'll do it again: companies are not bound by ethics or morality. Applying them to a company is inherently wrong because companies cannot have any goal other than shareholder value maximization long-term. Here's why: 1. Companies are not people, despite what the Supreme Court may say. They are legal constructs built around a set of rules. 2. Everyone who could potentially represent a company - a board member, an executive - plays a role and can be replaced at any time should they fail to perform their role adequately. 3. Executives are appointed by the board with one responsibility: to maximize the value of the company. This is the extent of a company's moral obligation: companies have a moral obligation to their shareholders to make money (or at least try in good faith to do so). 4. Should the board of a company appoint executives with a different goal than maximizing value, the share price will reflect this in the form of a lower value. 5. Assuming this is a public company, activist investors will accumulate voting shares of a company that is not maximizing its value (or undervalued). The activist investor will then either replace the board members with board members who will appoint executives with the goal of maximizing shareholder value, or they will pressure the existing board to do so themselves. Once the share price has recovered, the investor sells its shares and makes a profit. And the cycle continues. So the reason banks don't allow marijuana companies to set up accounts is purely risk and regulatory related. If it was a moral decision, well, morals and ethics are different from person to person, so SOMEONE would do it. Or some activist investor would take over a smaller bank and force them to do it. Individuals can have morals and ethics. If they control a company and choose to enforce their values through their company, well, that's their choice. But if the ownership of the company changed, so would the values.

kybernetikos 12y ago
> companies are not bound by ethics or morality..... There are three mechanisms that can cause companies to prioritise ethics and morality. 1. The voting public encourage their representatives to change the regulatory environment based on their morality. This is one reason why a whole host of unethical companies don't exist. Companies on the margins of morality suffer from extra risk that the regulatory environment will change too. 2. The customers exercising their personal morality are reluctant to buy from an unethical company, or boycott it, thus affecting the value of the company. 3. Key individuals find that there are moral and ethical limits to what they will do in pursuit of shareholder value, and they provide enough value in other ways that replacing them would be a net loss for the company (or activist shareholders actually share their views). Deliberately selecting your leadership team for poor ethics is likely to have some downsides too. > Individuals can have morals and ethics. If they control a company and choose to enforce their values through their company, well, that's their choice. But if the ownership of the company changed, so would the values. Exactly, and individually speaking, in my ethics, in role of voter, legislator, customer, shareholder, employee or executive of a company, morality and ethics certainly do play into my decisions. I believe that it is right that they should, and I expect the same of everyone. In particular, you say > [maximising value] is the extent of a company's moral obligation Which is an assertion without evidence that I simply disagree with. Maximising value might well be what is promised to the shareholders, but it's obvious that just as with all promises there is a context and limits to that. No shareholder would expect the CEO of a company to sacrifice their life if it would increase the value of the company by a cent. Everyone understands that the trust we have that the management of a company is trying to make money for the shareholder exists in a context, and one of the large parts of that context is morality. Your earlier statement almost seemed to imply that we shouldn't hold companies to standards of morality beyond the law, but that is just giving up. Expecting immoral behaviour from people in particular roles is a self fulfilling prophecy, and poisons the context.

by exelius 12y ago

kybernetikos 12y ago

> companies are not bound by ethics or morality..... There are three mechanisms that can cause companies to prioritise ethics and morality. 1. The voting public encourage their representatives to change the regulatory environment based on their morality. This is one reason why a whole host of unethical companies don't exist. Companies on the margins of morality suffer from extra risk that the regulatory environment will change too. 2. The customers exercising their personal morality are reluctant to buy from an unethical company, or boycott it, thus affecting the value of the company. 3. Key individuals find that there are moral and ethical limits to what they will do in pursuit of shareholder value, and they provide enough value in other ways that replacing them would be a net loss for the company (or activist shareholders actually share their views). Deliberately selecting your leadership team for poor ethics is likely to have some downsides too. > Individuals can have morals and ethics. If they control a company and choose to enforce their values through their company, well, that's their choice. But if the ownership of the company changed, so would the values. Exactly, and individually speaking, in my ethics, in role of voter, legislator, customer, shareholder, employee or executive of a company, morality and ethics certainly do play into my decisions. I believe that it is right that they should, and I expect the same of everyone. In particular, you say > [maximising value] is the extent of a company's moral obligation Which is an assertion without evidence that I simply disagree with. Maximising value might well be what is promised to the shareholders, but it's obvious that just as with all promises there is a context and limits to that. No shareholder would expect the CEO of a company to sacrifice their life if it would increase the value of the company by a cent. Everyone understands that the trust we have that the management of a company is trying to make money for the shareholder exists in a context, and one of the large parts of that context is morality. Your earlier statement almost seemed to imply that we shouldn't hold companies to standards of morality beyond the law, but that is just giving up. Expecting immoral behaviour from people in particular roles is a self fulfilling prophecy, and poisons the context.