FinanceProfessor.com

The Franciscan Tradition in the Accounting Classroom:
 

1. Introduce Luca Pacioli, the Father of Accounting & a Franciscan Friar.  (Consider showing the video, Luca Pacioli: Unsung Hero of the Renaissance.)  Be sure to explain that Pacioli did not write a book just about accounting; rather, he incorporated several references to ethics in this work.
2. Analysis of asset turnover ratios: Refer to Franciscan concept of poverty--don't use more resources than you need-this supports efforts to increase efficiency.
3. Discuss end-of-chapter ethics cases, where appropriate.  Mention Francis's concern with the issues of the day.  How would he approach the issue(s) raised in the case?
4. Conceptual Framework: Make an analogy between the conceptual framework & Luca Pacioli's summa both try to communicate to the business people of the time (Pacioli wrote in Italian so that his work would be accessible to the common merchant; the conceptual framework attempts to identify broad principles and guidelines so that practicing accountants & other F/S users can get the most out of F/S.)
5. Taxes: Horizontal & Vertical Equity can be discussed; specifically, Franciscan values are particularly concerned with vertical equity (fairness for the poor or marginalized relative to the rich).
6. Integrity is the cornerstone of an effective financial reporting system-likewise, the Franciscan tradition calls on us to show respect for all other people & all life in general-if we fail to act with integrity, we fail to respect others.

    Francis and Franciscanism lend themselves surprisingly well to a finance classroom.
 

1. Bankruptcy.  In many ways Chapter 11 bankruptcy, in which the borrower and creditor renegotiate the loan amount, is consistent with the work of Francis and his followers. (Anthony of Padua?---we need to check this!)
2. Debt forgiveness.  Does forgiving debt create a precedent?  Is it giving away fish rather than teaching to fish?  It can be said the most important thing the US ever did economically was when Hamilton forced all debt to be paid, thus setting the precedent that we would pay our debt and thus keeping "external markets" open to finance the US growth.  If we forgive debt, are we being kind or mean to the poor nation?
3. Free-Trade  Always a hot topic.  Is free trade good or bad?  It seems that Francis and his followers were onto the idea that free trade could indeed expand the size of the pie" enabling trade to be more than a win-lose proposition.  However, they would stress that just because you have an advantage, does not mean you should treat the other side unfairly.
4. Globalization-Usually dealt with in conjunction with Free trade.  However, there are slight differences.  Should a people be punished for being born into a region without natural resources or with a despot leader and poor economic system etc.  Pure economics would say the people should move to a land of greater opportunity, but often they can not.  What can be done?  What are the drawbacks?
5. Predatory lending is out.  Not only is the Fed against, but even Francis and Luca Pacioli would frown on lending to people at rates that almost guarantee the loans will be unable to be repaid.
6. Shareholder and stakeholders.  Stakeholders are anyone with a connection to the firm.  In finance we are constantly saying the shareholder is #1.  How can this jive with a Franciscan model of respect to all?  Quite well.  Shareholders are residual claimants (meaning they get paid last), thus only after all other stakeholders are satisfied
7. Short-term vs. Long-term.  Your reputation matters.  If you temporarily trick shareholders and other stakeholders, eventually it will come back to bite you.
8. Environmental economics--difficulty in pricing externalities, but this becomes easier if we are all one large family and thus incurring these costs rather than imposing them on others.
9. What is the correct model of Human nature?  In corporate finance we use a model of human nature that says people are REMs: Resourceful Evaluative Maximizers.  Is this robust enough to consider people who derive utility from helping others?  (BTW the answer appears to be yes)
10. Francis seemingly would agree that we should do what we do best.  If we have a competitive advantage in working in a certain industry or at a certain job, we should do it.  If this means we make much money, that is fine.  Making money using our gifts and doing so honestly is not a problem, however, what we do with the money can be.  (To whom much is given, much is expected.)
11. Socially responsible investing--while the short answer is no doubt, Francis would be in favor of it.  The real answer may not be so easy.  There are times when owning stock in companies such as Tobacco firms and gambling firms is the best way to influence change.  Simply not owning the stocks may be the easy way out.

The Franciscan Tradition in a Management Classroom

 
1. Just wages.
2. Treat people fairly.
3. Set reasonable working hours.
4. Practice compassion.
5. Promote a healthy working environment.
6. Be inclusive - do not discriminate against any employees.

The Franciscan Tradition in a Marketing Classroom
 

1. Ethical advertising (truth in advertising).
2. Should we sell a product because it is just or just because we can? (ex. cigarettes)
3. Do not oversell.
4. Fair pricing.
5. Maintain social responsibilities/Improve views of the public

**************************************************************

Due to several requests, the non-Financial Pages have been de-emphasized but remember Finance is supposed to be fun

so I will be keeping these "fun" pages online.

**************************************************************

History Links

Fun Links

Running/Fitness/nutrition/yoga links

Hiking/camping/environment and Gardening

Diabetic cat links

Reading

   FastCounter by LinkExchange

Copyright 2002, 2003 for FinanceProfessor.com