Ethics along with good corporate governance are essential to every successful company. Ethics are moral principles that guide the direction a business behaves. Behaving in an ethical demeanor encompasses deciding what is right from wrong and making the “right” decision. Ethics written into a companies mission statement assists in clarifying a company’s goals and intentions. In this case, Matt Dyson is the founder and president of an ethical bank primarily focusing on environmental sustainability. Matt is faced with the difficult decision between profitable business ventures or ethical ones. Matt began the Silver Lake Green Bank with an assembled board of directors out of concern for his hometown environment of Colorado. The image promoted was environmental stewardship. To solidify their image, a famous architect was commissioned to build an office that reflected environmental values. Solar-powered windows and a set of wind turbines are examples to showcase their environmental take. Articles and TV segments were marketing techniques used to gather support from local depositors and borrowers.
The ethical bank became successful in attracting clients who have grown tired of global banks, but to succeed financially, the bank needed clients that will take out big loans. Two big companies answered the bank’s calling but with a price. The bank’s opportunity to reap profitable returns came in the form of a gun manufacturing company and an engineering company specializing in hydraulic fracturing. As Silver Lake is an ethical bank, these two loan applications caused rifts among the directors. Guidelines about which loans to approve based on values and morals were not set prior to starting the business. Without clear ethics standards, the board of directors will find it difficult to make decisions for the company. Upon being presented with these two opportunities, the board of directors became instantly divided on the issue. There is no set standard for which the company should follow. One group of the directors insists on taking the loans to attract profitable returns, while others argue the company should make values-based decisions.
A strong mission statement clarifying the company’s goals and intentions should have been made before rushing into opening the bank. The company began with a strong position in marketing by promoting through articles and TV segments. However, its internal infrastructure is weak due to the opposing views of the directors. It is unclear where the company stands in gray areas. Matt needs to set clear goals and a mission statement to guide the growth of the company. Setting goals can help unify the board of directors and decide which strategies are best for the company. At this moment, the directors are only concerned whether the decisions of the company are in line with their own interests. Decisions need to be made to better the company as a whole. The indecisiveness of the board of directors can weaken the image of the company. Bigger banks that are financially more stable can take away these loans. Respectively, other ethical banks have the ability to attract their clients because they lack a uniformed front. Although Matt and his directors have established the bank as ethical focusing on environmental sustainability, it failed to set clear standards on who to deal business with. The company partakes in a weak control system, as they are not united together to make strategic decisions for the company. It is not recommended for a bank built on its ethical focus of environmental sustainability to support guns or hydraulic fracturing. Silver Lake began as a green bank to bring about what’s best for the neighborhood; its mission was to promote environmental stewardship. The company should not stray away from that position. The initial strategic process for the company should be maintained.
If the company shifts away from the image they have created, it will lose those initial customers they’ve attracted. Because this neighborhood have seen disastrous situations where guns have ended lives, it is not wise for the bank to support gun manufacturers. All the hard work invested into creating this eco-friendly image will be destroying when making these loans. The right thing to do would be to set realistic green guidelines and abide by them nobly. It is clearly stated the bank is growing at a “healthy rate.” This proves the company is not at a loss and the decision whether to accept the loan application is a matter between ethics and superiority. The bank’s mission needs to be prioritize over the determination to reap profits from gun manufacturers or fracking.