Integrity and fairness thus emerge as
core business principles. We contend that firms and individuals must always
place these principles above profit if they are to be ethical.
If this statement seems challenging,
then simply consider in what situations you are prepared to compromise these
principles?
Are you happy to share these instances
with your customers, employees and investors?
Fairness in practice
Financial Services can only build an
ethical foundation if, in the same way as a profession, the members complete a
journey that leads to a personal understanding of fairness and integrity.
Only when understanding becomes an
assumption shared throughout the organization, then they are able to uphold the
rights, duties and values that define fairness and integrity within Financial
Services.
The rights of all Financial Services
stakeholders are described in the law, particularly the FSMA, and in FSA
regulations. All Financial Services practitioners should be aware of these and
an understanding of them is an essential part of professional training.
These laws and regulations state the
minimum expectations of standards and compliance.
Yet it is the contention of this paper
that fairness may require more than this. Practitioners have a duty to uphold
not only defined rights but also other basic needs. For example, employers have
not only a duty to treat employees fairly but also a duty to deal fairly with
competitors.
Similarly, Corporate Social Responsibility
is another way of companies discharging their duty to the wider community. Such
duties go beyond regulation and compliance.
Integrity in practice
Integrity is often difficult to grasp in
itself because it is a synthesis of values but if we look at some core values,
the reality of integrity becomes clearer. We can explore these values in a very
simple but powerful way, using the traditional concept of “virtues and
vices".
According to Classical philosophers,
there are four virtues: Prudence, Fortitude, Temperance and Justice. In contemporary
business, Prudence and Justice are still widely used and understood. Fortitude
and Temperance are more commonly called Courage and Patience.
To these, Christian philosophers added
Faith, Hope and Charity, Charity in this sense a synonym for
“Care”. These may seem unusual in a
business context but they are still very relevant. For example, do people have
faith in the meaning of their work? Are service industries supposed to provide “customer
care”? Do employees view their career with cynicism or hope?5
To this list of traditional virtues, we
wish to add three core values that frequently appear in corporate mission
statements. These are Excellence, Honesty and Trust. (There are many other
values which can be added to this list, for example Creativity, Humility or
Tolerance. If integrity is about understanding shared moral values, then we
believe that people have the freedom to add other values if that helps them to
define integrity in their own personal and working lives.)6
Some
examples of values and vices in practice
Courage: It sometimes takes great courage to “blow the whistle”, when we
see someone doing wrong. We struggle against the cultural perception of being a
“grass” or “telling tales”. It also requires real courage to place principle
above profit, especially if a bonus or even your job might be at stake.8
Justice: (or Fairness): When making a mistake,
companies should not hesitate in admitting the error, should apologize and then
make recompense. It should not have taken politicians and the regulator to
identify and rectify the pensions mis-selling scandal. In this respect, for example,
even the automotive industry seems to act with higher ethical standards when
they “recall” cars to rectify faults.
Care: Customer Care, Health & Safety,
and Corporate Social Responsibility are contemporary areas where the importance
of this value is obvious. Less palatable for financial services is to recognize
and address the vices of greed and envy. For example, regulation does not
address the issue of greed.“Fat cats”, speculative investors, commission-driven
salesmen and even consumers can become connected in a vicious circle of greed.
Prudence: informs us that if
we sell or are sold the prospect of exceptional rewards, then we must assume that the risk is equally exceptional.
This requires not only the salesman to communicate this in “big print”, but
also the consumer to recognize when a proposition is reckless.
Excellence: is a value which reminds us that “if
something’s worth doing, it’s worth doing well”. If we can apply our talents to
our work with a passion, then the quality of our work will delight our
customers. In this respect, this principle always comes before sustainable
profits.
Honesty
and Trust: are values which are obviously vital to financial services. Yet,
recent and continuing scandals have seriously eroded the reputation of
financial services. One way of reversing this erosion, is for society to
witness a serious and convincing commitment to integrity by everyone in the
industry.
Editor's note: This is
the 3rd of 4 articles from a paper called "Integrity in Practice" for
the British Financial Services Association. I want to thank both Father
Christopher and Roger Steare for permission to print their article. You
can retrieve the complete copy of the article from Roger or you can contact me
at principledynamics@gmail.com
and I will send you a copy
About the Authors
CHRISTOPHER JAMISON Worth Abbey
Father Christopher is Abbot of Worth, a Benedictine
monastery in Sussex. The Abbey runs a School and a Centre for Spirituality. He
has recently co-founded The Soul Gym with Roger Steare, to help business people
‘work out what’s right’. Born in Melbourne, Australia in 1951, Father
Christopher holds an MA from Oxford in French and Spanish and a BA from London
in philosophy and theology. He is co-author of “To Live is to Change”
describing the process of change that the Catholic Church has gone through in
the last thirty years. He was appointed headmaster of Worth School in January
1994, and has managed two major Development Plans, while participating in
“Action Learning for Chief Executives” at Ashridge College. He was elected
Abbot of Worth in July 2002.
ROGER STEARE Ethicability
Roger Steare is an Executive Coach and Business
Ethics Consultant with a practice in the City. He studied History of Philosophy
at London University with Lord Russell, son of the philosopher Bertrand
Russell. With Christopher, he participated in “Action Learning for Chief
Executives” at Ashridge and established Roger Steare Consulting in 1998. Roger
is a Fellow of the Recruitment and Employment Confederation and an Advisor to
the Talent Foundation. He has been a frequent media commentator on workplace
issues.
Background
In October 2002, the FSA published Discussion Paper
18 “An Ethical Framework for Financial Services". In his introduction to
this paper, Professor David Jackman stated that the FSA wants “to establish a
clear and explicit, shared understanding about what integrity means in
practice." Integrity in Practice was commissioned by the FSA in order to
explain the foundations of ethical behaviour and the implications for Financial
Services in practice. The FSA’s business ethics portfolio has now moved to the
newly-formed Skills Council for Financial Services and this paper is published
as a contribution to the Ethics Forum established by the Skills Council.
Comments