The Influence of Ethical Environment on Managers’ Opportunistic Behaviour

Abstract:

The broad objective of this study is to examine the influence of an ethical environment on managers’ opportunistic behaviour. The study specifically addressed the following, the influence of the ethical environment on the reliability and quality of financial information, the influence of the ethical environment on managers’ responsibility for corporate actions and whether a corporate ethical culture can boost investor confidence in the financial activities of the company. This study utilised a survey research design and the sample comprised ninety-four employees from selected firms. The data were analysed descriptively and the t-test was used to test the hypotheses. The analytical results showed that the ethical environment influences the reliability and quality of financial information; it also influences managers’ responsibility for corporate actions. Lastly, corporate ethical culture can boost investor confidence in the financial activities of the company. Based on this, the study recommends that corporations should create an ethical culture that encourages all corporate governance participants including directors, officers, auditors, financial advisors, employees, and others to do the right thing and understand that this is vital to the company’s sustainable financial performance. The promotion of ethics in accounting professions remains critical for maintaining high standards. The use of judiciary orders to discover, trace and freeze benefits accruing from bad conduct should be possible. There is a need for stricter monitoring of stockbrokers to ensure that depositors’ funds are protected. Investors should be enlightened on their rights and encouraged to seek redress where their rights have been violated.