The Ethical Decision Making of Bank Managers’ and Corporate Financial Performance in Kenya

Abstract

Recent allegations of unethical decision making by leaders in prominent business organizations have jeopardized the confidence of stakeholders who regularly call for integrity, transparency and accountability. Therefore, the focus of this paper is to determine the effect of ethical decision making of bank managers’ on their corporate financial performance in Kenya. The measurement of ethical decision making was drawn from Managerial Moral Judgment Test (MMJT) and corporate financial performance from balanced scorecard to Judge a target population of 144 branch managers of various commercial banks in Kenya. The paper findings showed that ethical decision making had positive and significant effect on corporate financial performance. The results have important policy implications on corporate Governance in Kenya. In addition this paper organizes the existing literature pertaining ethical decision making and corporate financial performance highlighting promising directions for future research.

Keywords: Moral Judgments, Corporate Governance, Ethics, Ethical Decision Making, Corporate Financial Performance