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To whom should we be fair? Ethical issues in Balancing Stakeholder Interests from Banco Compartamos Case Study

Arvind Ashta () and Marek Hudon

No 09-036.RS, Working Papers CEB from ULB -- Universite Libre de Bruxelles

Abstract: In the world of microfinance, interest rate ethics is an important issue, thrown into the limelight by the Initial Public Offering of Compartamos which resulted in millions of dollars of gains, some of which found their way into private pockets. These high gains were based on high interest rates, raising ethical questions. The paper then uses a stakeholder analysis to explain the interests of different stakeholders in this case and present that fairness to one group of stakeholders is often at the expense of another group. We take the position that in this case, specifically, the firm objectives could have been met without such ethical trade-offs. The specifics of the case are then generalised to all NGOs participating in for-profit firms.

Keywords: Agency problem; business ethics; fairness; governance; microfinance; stakeholder (search for similar items in EconPapers)
Pages: 34 p.
Date: 2009
New Economics Papers: this item is included in nep-mfd
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