Ironically, it seems like one of the ethical issues faced by people in the banking and finance industry is whether or not to take The Banking and Finance Oath (BFO). Trent identifies two central dilemmas. Firstly, that the Oath is taken with the right motivation or intent; and secondly, whether or not The BFO will actually have a positive effect – on the individual and on the wider industry.
Ironically, it seems like one of the ethical issues faced by people in the banking and finance industry is whether or not to take The Banking and Finance Oath (BFO). There appear to be two central dilemmas. Firstly, that the Oath is taken with the right motivation or intent; and secondly, whether or not The BFO will actually have a positive effect – on me as an individual, on my immediate colleagues and on the wider industry.
The primary enemy of good ethics in financial services is not simply the practice of ‘bad ethics’, it’s the unchallenged acceptance of the things we do, the way in which they are done, and the motivations underlying both of these. Healthy cultures are characterised by healthy challenge and we should bring that same mindset of challenge to any decision regarding taking the Oath. Coverage by the Australian Financial Review indicates that the Chairmen and CEOs of the four major banks are doing just that.
To some extent I am both a reluctant signatory to The BFO and a proponent of its relevance and benefits. It should not be necessary – in a perfect world. However the reality is that the Australian banking and finance industry is imperfect. Imperfection is part of the enormous complexity of decision-making, the asymmetry of knowledge, established reward and remuneration practices, and the balancing of stakeholder needs, to identify just a few.
Imperfection requires not a theoretical response, but a practical one. A good starting point for ‘practical’ is in personal practice – and that’s where the Oath has relevance and benefit.
Let’s look at a few of the issues that people raise about The BFO, some of which were also mentioned in the AFR’s recent articles:-
It’s an unnecessary affirmation of good character. This is a two-part argument that indicates that an oath is unnecessary when (a) we can just state our intentions in plain language; and, (b) we are better judged by our deeds. Both these points are useful ways to test the need for the Oath and are understandable objections, especially for Chairs and CEOs who are frequently on the public record and judged by stakeholders. Taking the Oath may be a crude vehicle for conveying a personal commitment and no substitute for ethical behaviour, however it presents an opportunity to clarify and unify what is important at all levels of the industry and to set that tone ‘from the top’.
The Oath is about honesty. To date The BFO has not been well known and when people first hear the word ‘oath’ they can latch onto the concept of the type of oath taken in a courtroom which, in lay terms, is a simple oath about honesty. But The Banking and Finance Oath is not simply about honesty. In fact the word ’honest’ does not appear in it. It would be impossible to take the Oath without committing to honesty, but it is much richer and more well-rounded than simply a commitment not to tell lies.
The Oath could be tokenistic or a PR exercise. That’s a fair enough reason to pause and consider the motivation for taking the Oath. It’s certainly incumbent on those of us who have signed it to make sure that it isn’t used to blow a bugle. No doubt some people will take the Oath with greater seriousness than others – I suspect that happens with all oaths and commitments – but in and of itself, it’s not a reason to dismiss it. This sounds more like a hypothetical objection, rather than a practical one.
The Oath implies that the signatories must have to correct some aspect of their character. It’s understandable that some people will feel that The BFO is a late imposition on their established career and that it does not recognise an individual’s track record of ethical behaviour. But the Oath is not an award – it’s not bestowed as an extrinsic indicator of worth or goodness. It’s a statement of future intent where the harshest judgment will be our own conscious reflection on the degree to which we have put the Oath into action each quarter, each year, each project, each role. Are we admitting that we have to correct some aspect of our character? Yes and no. We are at least committing to be responsible for our actions and that requires the humility to examine our values, motivations, decisions and the impact of our actions.
Other things are in place that precede The BFO and have a similar effect. When I entered the banking and finance industry more than 25 years ago my no-nonsense manager was very clear that there was one guiding principle above all others to which I had to commit – ‘there are no degrees of honesty’. Misappropriating a postage stamp was as dishonest as misappropriating a million dollars. It was a good foundation but perhaps too simple. Over time organisations have developed much clearer statements of purpose and values, we recognise the important role of team culture, we evaluate behaviours as well as performance, and we have stronger notions of accountability and responsibility. Yes, many things complement the Oath.
So why do we need an industry-wide oath? Let me offer a suggestion that requires a separate debate:- there is no target-state culture for the whole industry, nor a model that describes the deep personal capabilities (‘virtues’ to use a philosophical expression) that we want to support in every financial services organisation, regardless of an individual’s role. The Banking and Finance Oath is a good start to that debate and a good start to personal, practical action, even if it should not be necessary.
Trent Moy has an extensive background in financial services and is a Senior Consultant for The Ethics Centre and Director of Halide Pty Ltd.