Window Dressing

“Window dressing” is a practice that has gone on inside companies for years. Due to the recent financial crisis however, more and more companies are making this practice a “norm” within their organizations. Although this is technically a legal process, it can mislead and deceive shareholders and potential investors of the company. Is this practice ethical? These companies seem to think it is ok to hide things for a short amount of time to make end of the year numbers look better, but what effect does that have on shareholder risk and the overall health of the company? The SEC has been following many cases of window dressing over the years, and has been trying to decide on whether or not limitations need to be put into place for this practice.
“Window dressing” is the practice of adjusting portfolios at the end of each quarter so that the best performing stocks in the market stand out in the quarterly report to shareholders. Therefore, the mutual fund may not appear as the actual performance of the stocks listed in the account. After reviewing the article, as well as my previous opinion of window dressing being unethical, I stand by my opinion of it being unethical. I believe that good ethics leads to good business, and that trust can go a long way in the business world. Eventually these things such as hiding underperforming stocks are going to catch up with you and your company. The argument for, is that nothing is actually done wrong, formulas and numbers are simply manipulated to show a different outcome. It simply doesn’t make sense to just sweep these bad things under the rug and not expect anything to come from it in the future. Reputation and public image are also large influences in the American society. Simple accusations of such practices could ruin your company, no matter how large before you have even been proven guilty of the accusations. In this case, running an ethical and honest business clearly invokes more trust form the customer, thus leading to