Compliance can’t be in every situation all of the time. Every decision can’t be monitored, nor should we want it to be. The purpose of The Banking and Financial Services Oath (The BFSO) is to encourage self-reflection and values-driven decision making. There will still be situations where behaviour is not in line with the values of an organisation and it’s important to question when you see this. You just have to look at #ToiletPaperGate to see behaviour can be driven by self-interest, when the circumstances permit, whether we realise it or not.
The broader example of hoarding is an example of fear driving unthinking practice. The BFSO encourages individuals to ‘call out wrongdoing and support others who do the same’. However, situations will still arise, where organisations will rely on a whistle-blower speaking up. Bad behaviour still happens during a crisis.
We spoke to a whistle-blower from the financial services industry who explains why speaking up is as important as ever in these challenging times.
It would be wonderful to think that a global pandemic would bring out the best in all of us, that we might emulate the “we are all in this together” behaviour depicted by Hollywood’s cache of World War II movies. But for all the extraordinary ingenuity of people who are finding ways to help us emerge safely from Covid-19, there also are those who use the emergency to profit at the expense of others. For all the generosity of strangers and friends, there will be others whose actions betray their selfishness and a lack of care.
What this means is: this is no time to take your eye off ethics. Bad behaviour does not go on holiday during a crisis. You just have to cast your mind back to the “Pink Batts” affair during the Global Financial Crisis of 2009, when a Commonwealth Government job creation program became mired in fraud and compliance issues. Four young men lost their lives installing insulation into roofs and unsafe practises led to hundreds of house fires.
The whistle-blower warned that crises are often dangerous for truth-tellers. At times like this, a “whatever it takes” attitude takes hold and rulebooks can go out the window. It can seem unpatriotic or disloyal to voice objections when everyone is supposed to be working as a cohesive team. Witnesses are less likely to speak up because they don't want to risk their jobs as they see the unemployment rate climbing. “People become more risk-averse,” he says.
A New Zealand insulation industry figure tried to raise the alarm about the Pink Batts safety issues with Australian bureaucrats at the time, but was told to not “rock the boat”.
Loosening regulation enables banks to act fast. To cushion the economic fallout from the pandemic we are now facing, the financial services industry is being assisted by its regulators to speed up decision-making and offer lifelines to borrowers. This involves loosening some of the regulatory requirements that are designed to protect the public. The work being done by this sector is exceptional.
In March, the Council of Financial Regulators told the banks to prioritise lending to small to medium enterprises over following the letter of the law. This council includes the Reserve Bank of Australia (RBA), the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA).
“ … right now it is more important that banks, insurers and superannuation trustees – as well as APRA – devote their energy and resources to responding to the impact of COVID-19,” said APRA chairman Wayne Byres.
Among emergency measures was the decision by ASIC to suspend its close and continuous monitoring program, which had embedded watchdog officers into the workplace of the major financial firms. It also eliminated the need for financial advisors to provide a Statement of Advice when providing advice around early access to super. Emergency measures such as these mean that it is more important than ever to enable and protect whistle-blowing. It is no time to engage in groupthink or to try and silence the naysayers.
Ethical fading starts with small transgressions. It can be hard to pinpoint when behaviour starts to be troublesome. The process known as “ethical fading” begins with small steps, as high behavioural standards start to decline. In our personal lives, it can start with breaking rules that seem more like inconveniences.
The whistle-blower we spoke to challenged a friend (that he had considered a man of principle) about his hoarding and asked, what is more important, your family or society? He was surprised how quickly his friend vouched for his family. “If I don’t look after them, who will?” his friend replied. Self-preservation is a powerful instinct.
But we have to be on guard to ensure that our very understandable drive to take care of our loved ones and ourselves does not lead us to harm others. We need to ensure that small steps we take over ethical lines – sneaking out to socialise when people are asked to stay home – don’t accustom us to becoming rule-breakers. Because, if you hoard toilet paper, despite knowing you don’t need it and others do, what else are you prepared to do? If you will act unethically over the small things, what will you do when your job and your family’s security is on the line?
This pandemic is forcing people to have to make unusual moral decisions. Some of them are huge choices and others seem almost insignificant in comparison. But even in these days of anxiety and chaos, we need to pause to consider what is the right thing to do – not just the most expedient.