Sure, financial services recognize the importance of ethics. Sadly, however, most of them follow ethics in a purely robotic and non-reflective manner.
Ethics can be deeply rooted in your company’s ideals only when leaders go beyond basic rule-based considerations. Your financial managers may have the skills to manage massive sums of money. But the question is, is skill alone enough?
In this article, we have lined up several ways to promote ethics among your employees. Right from hiring ethical employees to establishing a robust reporting framework – read along to understand how your company can create a long-lasting culture of ethics.
Ethics In Financial Services
To avoid any breach of ethics, it is critical for your company to establish a code of ethics. It must include principles like:
- Maintain honesty and integrity during every activity.
- Disclose both the positive and negative sides of relevant information to ensure your listeners aren’t misguided.
- Remove any possibilities of conflicts of interest when it comes to professional relationships.
- Comply with all laws and regulations when governing your organization.
- Never use or share sensitive company information for your personal gain.
- Always operate on moral ground and don’t let your self-interest interfere with your decision-making.
- Immediately report anyone who violates the code.
- Establish solid internal systems to remove any possibilities of unethical behavior.
Although your company’s code of ethics is important, simply ticking off all the boxes here is not enough. Read on to understand how you can deeply implant moral and ethical thinking in your employees.
Hire the Right Employees
Ethics starts with hiring. After all, opening your company’s doors to an employee who values ethics is far better (and easier) than painstakingly drilling the importance of ethics in an unethical candidate. Make sure you run an ethics screening on candidates when the hiring process begins. During the interview, it is critical to ask situation-specific questions to gauge a candidate’s “ethical muscle.”
Ask questions such as “What is your definition of integrity?”, or “how have you dealt with a mistake you made in the past?” You can even present an example of an ethical dilemma to the candidate and study the conclusion they arrive at. Often, countless nuances surround the very nature of ethical dilemmas and the way a candidate reacts to them can point out their ability to handle these dilemmas.
Incorporate Ethics in the Onboarding Process
Employee onboarding is the perfect time to introduce your company’s code of ethics to new hires. Guide them in terms of how they can react when an ethical dilemma knocks at their door. Your bank’s code of ethics would be the moral compass that must consistently guide your employees to do the right thing.
Leave No Room for Ethical Ambiguities
Communication of your ethical expectations is key to erasing all forms of ethical ambiguities in your workplace. Your code of ethics must state your company’s primary values. It must also outline the rules of ethics your staff is expected to abide by.
Focus on Ongoing Training Related to Ethics
Constructing a code of ethics is not enough. Managers in financial services must offer workshops, seminars, and other creative financial compliance training programs to reinforce the importance of ethics in the workplace.
Ethics training clarifies what types of practices are permissible and not permissible. Make sure your training strategies are specific to your organization. Offer detailed, concrete, and relevant knowledge instead of generic content. Training isn’t just a one-and-done activity that takes place during onboarding. It must be offered periodically to ensure employees are always at their best ethical behavior.
Remember, the effectiveness of your ethics training is directly linked to how engaging your training method is. After all, it’s not easy for anyone to retain a painstakingly detailed set of rules and regulations unless they are truly interested in it. Make sure your training sessions are highly interactive and engaging. Make use of videos, roleplays, games, or any other creative approach to get the message across loud and clear.
Reward Ethical Behavior
You may have strict policies to penalize unethical acts. But does your organization also have a reward system to appreciate ethical behaviors?
If an employee “does the right thing”, how would your manager react?
Would they acknowledge the employee’s ethical behavior, or would they simply walk past it like nothing new happened?
The point here is rewards play a massive role when it comes to encouraging ethical practices. When an employee feels acknowledged or rewarded for reporting misconduct, the rest of the staff would feel encouraged to follow similar behavior as well!
Recognize the Difference Between Ethical and Legal
Simply put, what’s “legal” may not necessarily be “ethical.” It is up to your company to spot that fine line between the two.
The legal department can always find loopholes to back up certain unethical acts.
To find the right resolution to an ethical dilemma, ask yourself, “does this decision align with the company’s code of ethics?” or “how would the world react if your company’s decision gets printed on the front page of your local newspaper?”
In addition, don’t hesitate to bring in the opinion of valuable employees who are known to uphold their ethical values.
Lead by Example
Ethics must flow in your company’s veins right from the top management.
This is because your staff members often observe the behavior of their managers to understand what kinds of behaviors are acceptable within the company.
You may recruit board members of influence of affluence. But don’t rush towards a decision if you don’t find substantial traces of wisdom and integrity in their portfolios.
Craft a Solid Framework for Resolving Ethical Hiccups
Sure, building an army of ethical staff is important. But without a thorough framework of misconduct reporting, investigation, and resolution, it can be challenging to maintain a consistent culture of ethics.
Create a company culture where employees feel free (and encouraged) to report wrongdoing by using a solid reporting framework.
Remember, employees will choose not to report misconduct if they sense any sort of retaliation or if they feel the management won’t take action. Your management must also offer employees a space where they can speak truthfully, freely, and without any fear of retaliation.
In a Nutshell
There are endless loopholes within the financial services industry when it comes to lining one’s own pockets. The repercussions that follow, however, cannot be undone. Wells Fargo, for example, took a massive blow when word got out that employees had opened many accounts without their customers’ consent to meet their sales targets.
Remember, prevention is always better than cure. From establishing a solid framework of ethics to churning out highly effective investigations and resolutions – make sure your bank is proactive in all areas of ethics!
Resources:
- https://smallbusiness.chron.com/business-ethics-finance-manager-20490.html
- https://blog.candid.org/post/five-ways-to-promote-ethics-in-your-organization/
- https://sfmagazine.com/articles/2021/june/cultivating-ethics-in-business/
- https://online.alvernia.edu/articles/ethics-in-the-workplace/
- https://execed.kelley.iu.edu/the-importance-of-ethics-in-finance/
Author Bio:
Giovanni Gallo is the Co-CEO of Ethico, where his team strives to make the world a better workplace with compliance hotline services, sanction and license monitoring, and workforce eLearning software and services.
Growing up as the son of a Cuban refugee in an entrepreneurial family taught Gio how servanthood and deep care for employees can make a thriving business a platform for positive change in the world. He built on that through experience with startups and multinational organizations so ComplianceLine’s solutions can empower caring leaders to build strong cultures for the betterment of every employee and their community.
When he’s not working, Gio’s wrangling his four young kids, riding his motorcycle, and supporting education, families, and the homeless in the Charlotte community.
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