26 Mar 2014
On my oath, I love banks
Banking is fundamentally about trust. Without trust we don’t have customers, we don’t have a business. And as we saw in the financial crisis, when this failure of trust spreads to the financial system, entire economies come under threat.
When that crisis hit in 2008, I had mixed emotions. On one level, I was pleased that our Australian banks had proven more secure and reliable than many overseas. On the other hand, however, I was deeply embarrassed that the industry I had committed so much time to, and institutions I had held in such high regard, had proven to be so fundamentally flawed at their core.
That systemic crisis began with the decisions of individuals and so it is at the individual level we have to rebuild trust. We each need to contribute to an ethical system and for leaders in the industry, like me, ethics is a different ball game. We are charged with making the big decisions that shape culture and we are publicly accountable.
It is not enough that we in Australia survived the crisis, we haven’t always, as an industry, done the best by our customers and society, something we are frequently reminded of in public life. We can do better.
For me, a formal commitment to that essential ethical element of banking is called for and that is why I subscribed to the Banking and Finance Oath. You may not have heard of it and perhaps it strikes you as fanciful.
But the oath is an industry initiative which is being championed by a number of industry leaders and organisations. Like the Hippocratic Oath, where medical practitioners pledge to practice in an ethical and honest manner, the Banking and Finance Oath affirms respect for the position of trust society gives to banking and finance workers.
It doesn’t suggest the financial system is wholly altruistic. Rather, if it is to serve its purpose in supporting real jobs in a real economy, it must be ethical. This is not antagonistic to profit, indeed I believe the institutions which do this well will have the most sustainable profits.
They will have deeper ties to more loyal customers and they will be less likely to have governments and regulators impose higher costs on them in an attempt to safeguard the financial system.
I am a strong supporter of the simplicity of ANZ’s “Our Values” statement. Our values are about 'doing the right things well'. In agreement with the Oath, our values describe where we will not compromise in any situation - with our customers, our shareholders, the community and each other.
At the front line, that translates into ANZ’s ICARE proposition, our values in action. ICARE stands for integrity, collaboration, accountability, respect and excellence. Our staff have these ethical principles reinforced in training and their everyday activities.
“We each need to contribute to an ethical system and for leaders in the industry, like me, ethics is a different ballgame. We are charged with making the big decisions that shape culture and we are publicly accountable.”
To me personally, the oath is an extra reinforcement of those values, an important and very public way in which people in the industry can stand up and say there is a better way. The behaviours that marked the worst of the excesses (such as the LIBOR rigging and the obsessive culture around bonuses) need not be a part of a healthy functioning finance industry.
I’ve been working in banking for a little over thirty years. You don’t do that unless deep down there’s something that you love about the industry. It means something to me that banks lend money to people to build businesses, to buy a home and to manage life’s ups and downs.
So it is very important the Banking and Finance Oath is an individual pledge, and not driven by organisational accountability. Too often we look to organisations to adopt policies and targets and make boards accountable for a multitude of outcomes. This creates the notion that it’s someone else’s issue. The Oath is different; it asks individuals in the industry to stand up and be counted.
It puts a special onus on people in leadership positions. Firstly, leaders have to lead by example. We sign the Oath and our participation signifies a ‘green light’ to our people that this is simply right.
Secondly, we are in a position to help shape the way our organisations work. We set the rules, the incentive structures, the whole culture. It is very difficult for our people to endeavour to conduct themselves ethically in all their dealings if the organisation sends conflicting signals through the people we promote and the behaviours we reward.
Lastly, leaders and their actions are visible. If we make a commitment to behave ethically and don’t adhere to that standard, our actions will stand out much more for people further down the organisational hierarchy.
In this spirit of public accountability, I have posted a version of this blog on the Banking and Finance Oath website. You can follow me via my Twitter handle @PhilipChronican.
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.