BID® Daily Newsletter
Mar 9, 2010

BID® Daily Newsletter

Mar 9, 2010

SWIMMING WITH SHARKS AND ETHICAL BANKING


The odds of an accidental death due to a shark attack are 1 in 91,530. These odds are even higher for a shark attack in a branch. While bankers are more likely to be hospitalized because of a stapler injury (odds 1 in 85k), sharks still scare us. If you see fins in the water, stay out.
This brings us to our topic of the day, which is about ethics and maintaining ethical behavior in banking. There are many definitions of ethics, but for most it means someone will act in a way consistent with personal, corporate and societal values. Not everyone is ethical and some seem to drift in and out of ethics as fluidly as a shark swims though the ocean.
Having a bedrock of principals is extremely important in banking and doing so begins with being honest and telling the truth. Having respect for others, maintaining personal responsibility, individual accountability and maintaining trust in all areas of the business and work relationships is critical. Everyone at the bank must share in a personal responsibility to protect a strong ethical reputation if the bank is going to ensure ongoing behavior is appropriate.
There are many ways to accomplish this, but some jump out for all banks to consider. For instance, bankers should remind staff to start with something as simple as doing the right thing for customers and each other. Next, make sure information is clearly communicated, truthfully and accurately throughout the bank. Treat others as you would like to be treated. Fourth, comply with all laws that govern the business or oneself. Finally, ensure everyone takes accountability for decisions and actions, including reporting concerns or potential violations at the bank. All employees, management and directors should be expected to act lawfully, ethically and professionally in the performance of their duties at all times. For that matter, management should ensure that any suspected acts of dishonesty, misconduct or conduct that is inconsistent with ethical standards are investigated in a prompt, fair and thorough manner.
Since ethics are crucial to maintaining a healthy bank, we suggest thinking about some key questions to ask when faced with a situation that may not be obviously clear. Start by asking whether what you are doing could hurt the reputation of the bank, is questionable, or just plain feels wrong. Then, consider whether such actions would look bad to friends, family or others, such as shareholders. Think about whether you could defend your actions in front of a court in context of polices or guidelines of the bank. While maintaining strong ethics is everyone's job, it is up to management to set the standard and make sure that ethics are the foundation for bank culture.
Unfortunately, these days, banking ethical standards are repeatedly being called into question by the media. While bankers have always maintained a high level of professionalism and ethics, even the hint or appearance of an impropriety can get the waters chummed. Given all of the sharks swimming around the industry these days, ensuring the bank's reputation is maintained is fundamental.
Subscribe to the BID Daily Newsletter to have it delivered by email daily.