Ethics in Finance – Survey
IN JULY 2016, the Governance Institute of Australia’s inaugural Ethics Index — the first survey of its kind conducted in Australia – was launched.
Significantly, the research found more people view company chairs, CEOs and senior executives as being unethical rather than ethical. (The research didn’t miss journalists either with 4o% of those surveyed rating my vocation as unethical. But I digress.)
Accountants fared pretty well, professionals considered the most ethical professionals in the banking, finance and insurance sector. This highlights the important role of chartered accountants in creating ethical corporate cultures.
A robust corporate culture can be a driver of best practice, or ethical conduct, declared Greg Medcraft CA, chairman of the Australian Securities and Investments Commission (ASIC), in a speech delivered at the launch of the Ethics Index in Sydney.
“Ethical conduct can help organisations move beyond minimum standards and ‘tick a box’ compliance practices to best practice standards and compliance practices that protect stakeholders and which are commercially valuable,” he said.
“If your culture genuinely reflects `doing the right thing’, this will be rewarded with longevity, customer loyalty and a sustainable business:’
Ethical standings
The Ethics Index surveyed more than 1,000 people and found that while Australians regard themselves as “somewhat ethical” with an index rating of 39, large corporations and the banking finance and insurance sector didn’t score so well, which probably isn’t really a surprise given the bank scandals in Australia in recent years.
The banking, finance and insurance sector scored the lowest Ethics Index score among all sectors (-5), though n. all the occupations within the classification have been tarred with the same brush. Accountants, for example, lead the sector by being seen as ethical by 1 in 2 respondents, while the lowest rated in the sector, mortgage brokers, are seen as ethical by 1 in 3.
By organisations, superannuation funds are seen as the most ethical ( 41-47% ethical score), retail banks and life insurance companies score poorly (29% and 26% ethical score respectively), and industry bottom feeders the Pay Day lenders recorded the worst rating of all sectors surveyed (a 63% unethical score).
In the banking and finance sector the data shows Australians regard incentives as being very important to ethical conduct. Incentives and remuneration are key areas of focus for ASIC, according to Medcraft.
“We have also recently commenced a review to examine the mortgage brokering market to determine the effect of current remuneration structures on the quality of consumer outcomes,” he said.
| Occupations (%) | Unethical (Net) | Ethical (Net) | Net Score |
| Accountants | 17 | 47 | +30 |
| Tax Agents | 24 | 40 | +16 |
| Bank Managers | 28 | 38 | +10 |
| Financial Planners | 30 | 37 | +7 |
| Fund Managers | 31 | 32 | +1 |
| Mortgage Brokers | 32 | 31 | -1 |