GillianLee will be morally accountable for the decision to trade on insiderknowledge. Gillian has moral responsibility in this. As an employeeof GPE working under Jerry, she is a moral agent of the company andis assumed to make the right choices that will benefit the company.Where trading on insider trading is, concerned, legality comes in andcasual responsibility may apply since the decision to trade oninsider knowledge will carry the implications of blame[ CITATION Bai11 l 1033 ].Causal responsibility will make Gillian accountable for theconsequences of the decision unlike in moral responsibility,which has more to do with making the right or wrong decisions.
Decisionsin a company should be made in consideration of all the stakeholdersof the company. Based on the stakeholder theory the shareholders of acompany include the shareholders or owners of the company, customers,employees, creditors, suppliers, and largely the community where thecompany operates[ CITATION Ras89 l 1033 ].Byputting all the stakeholders of the company into consideration whenmaking decisions , a company’s decisions can be considered asethical in their decisions and in their dealings in general.
Tradingon insider trading will present ethical consideration that will leaveGillian in an ethical dilemma[ CITATION Bai11 l 1033 ].Gillian should consider all the stakeholders who will be affected byher decision to trade on insider trading. First, Gillian shouldconsider theeffects of her decision shareholders of GPE whom she owns fiduciaryresponsibility to as an employee of the company. Second, Gillianshould consider the effect of her decision to Jerry and to all otheremployees at GPE. Finally, she should consider the implications ofthe decision to the company’s image and this is where thecustomers, suppliers and the community in general come in. Gillianshould consider how all these people will view the company should theshe be found out and the news gets to them.
TheUtilitarian and Deontological approaches can best be applied to theethical issues surrounding trading on insider knowledge. TheUtilitarian approach is mainly concerned with the consequences ofone’s actions and in this case Gillian while the deontologicalapproach places more weight on the way actions are carried out orthe way decision are made rather than their results. The twoapproaches hold that action or decisions made are judged as good orbad based on the consequence and actions or decisions made should befor the good of the majority causing more good than harm[ CITATION Gav10 l 1033 ].The consequences of the decision to trade on insider knowledge mayfavor Gillian but the decision will not be for the good of themajority and will cause more harm than good. Based on the twoapproaches insider trading with therefore be considered as anunethical practice.
Virtueethics hold that actions or decisions made are judged by thecharacter of the of the actor or decision maker rather than on theirbehavior or on the consequences of the action or decisions made[ CITATION Gav10 l 1033 ].Gillian’s character and virtues will thus play a key role indetermining her ethical and moral behavior. The decision to trade orinsider knowledge or not will be influenced by Gillian’s virtuesand character and not on community obligations and corporatecharacter. The morality of this decision is determined by an analysison factors such as consequences and intentions of the decision.
Ethicsof care hold that sensitivity and emotional responses to situationspresented to one provide significant guidelines to morally acceptabledecisions and actions. Gillian had formed relationships with the GPEcommunity and had many friends in the company she also had a goodrelationship with Jerry, her boss. Gillian therefore had a moralresponsibility to look out for the interest of her friends in thecompany in her decisions thus exercising the ethics of care.
Gillianhas a duty to fulfill the interests of GPE’s shareholders and aduty to be trustworthy to Jerry. Based on Kantian’s theory, Gillianshould fulfill the interests of the shareholders and be trustworthyto Jerry even if these duties are not as beneficial to her as insidertrading. Gillian also has a prima facie obligation to fulfill theinterest of the company’s shareholders and to be trustworthy toJerry, this duties yielding to more pressing duties to the two.
Theautonomy principle is used to determine if an action or decision ismorally right or wrong[ CITATION Ras89 l 1033 ]. While individualare free to make decisions, and in this case Gillian, the decisionsthey make should be morally right and should therefore result to moregood than harm. Gillian must therefore subject herself to the morallaw as she is a moral agent of GPE and Jerry as well. The autonomy inGillian’s decision-making should only be infringed if her decisionswill harm other people as suggested in the harm principle. The harmprinciple holds that an individual’s decisions or actions should beonly be limited to prevent the harm of other individuals[ CITATION Ras89 l 1033 ].Gillian’s decision to trade on insider knowledge will cause harm toother individuals and should therefore be limited. In addition,Gillian has the contractual right to make decisions of her ownindependent from those of the company, or those made by her immediateboss Jerry though she should make decisions that will not harm ofjeopardize the company and its shareholders.
Wherejustice is concerned, retributive justice best applies in this case.The retributive justice theory holds that individuals who commitwrongful acts, particularly criminal ones like insider trading,should be punished for this wrongful acts even if punishing them forsuch acts will produce no other good. Based on this theory, Gillianshould therefore be punished for insider trading even if punishingher will not produce any other good like compensation to theshareholders[ CITATION Bai11 l 1033 ].
IfGillian decides to trade on insider knowledge, she would be doing sobased on ethical egoism, which holds that a moral agent should act ormake decisions in their own self-interests. By acting in herself-interests, Gillian ignores the fact that a moral agent has anobligation to others – Jerry and the company’s shareholders.
Theutilitarianism theory holds that the best course of action is the onethat maximizes the utility of the action, which is maximizing thetotal benefit accrued, and reducing the negatives[ CITATION Gav10 l 1033 ].Based on this theory, Gillian would not participate in insidertrading as the action will not maximize benefits and will causesuffering to many. Utilitarianism has a moral foundation and Gillianshould therefore not consider maximizing her benefits, as they willcause harm to many. The concept of indirect utilitarianism comes inwhere there are policies and rules laid down to regulateinsider-trading activities.
Finallyconsequentialism theory holds that a morally right or wrong actdepends on the consequences of the act[ CITATION Ras89 l 1033 ].Basedon informed-preference consequentialism, Gillian’s insider tradingcould be considered as a morally wrong act due to the great harm thatit would cause to the company and its stakeholders. The best decisionfor Gillian would therefore be not to trade with insider knowledge,
Bainbridge, S. M. (2011). Insider trading. Edward Elgar Publishers.
Gavai, A. K. (2010). Business Ethics. Himalaya Publication House.
Rashdall, H. (1989). Moral choices: ethical theories and problems. West Pub. Co.