Clare Payne, Board Member of The BFSO and Consulting Fellow with St James Ethics Centre, asserts the significance of The BFSO in working towards a self-regulating, ethically conscious industry. She writes of the need to recognise that ethics and banking are not incongruous terms and should never be considered in common discourse. In light of this, Clare encourages signatories to use The BFSO as an opportunity to spark that conversation.
Surely the ultimate goal of the Responsible Investment movement, or ESG (Environment, Social Governance) as it is otherwise known, is to not exist at all. For if one type of investment is responsible then what are they saying of the others? All irresponsible?
Just like medical researchers and philanthropic foundations work to find the cure to eradicate a disease or social ill, making their services obsolete, so should the Responsible Investment community.
However for now the mandate and the work of the Responsible Investment community is needed, because we’re not there yet. However, whilst Responsible Investment grows in market share it is vital to ensure that it is not entrenched as so separate to other forms of investment that it never becomes the norm.
As important as it is to provide a range of services, advice, investment vehicles and opportunities focussed on Responsible Investment it is also important to continue to work with and attempt to influence other parts of the markets. The Responsible Investment community needs to work with the whole market, embed practices within the hardest businesses, inch them, however slowly towards other ways of thinking, different considerations – the considerations of Responsible Investment such as environmental impact, exploitation, well-being and health of people now and in the future.
This is where the Banking and Financial Services Oath (The BFSO), a Hippocratic Oath of sorts for those in the banking and finance industry, can help. The BFSO gives every individual in the Industry a lead-in to start a conversation. The BFSO is the ultimate segway; ‘Someone has told me about this personal Oath and I’ve signed it, I’m not sure how that deal would fit with it’ or if someone is concerned about a proposal, ‘Is anyone on this deal singed to The BFSO?’ It would most likely be met with the following; ‘The what?’ and you can go from there.
If I’m sounding like I’m peddling something well I am. I’m peddling ethics in the banking and finance industry. Some would say I’m peddling up hill in one of the toughest stages of the Tour de France, and they were right once but in 2014 we’re seeing a different landscape. There’s more open road, there’s more people on the road going in the same direction, there’s more interest from the sidelines and there’s less resistance. We may think we’re already wearing the leaders jersey but that would be a matter of opinion not fact, for it depends which race you’re in.
There’s no silver bullet to ‘fix’ the banking and finance industry of all its woes. As with any complex system there are many things that need to happen at once, in coordination and respect of each other for it to function efficiently, fairly and for the good of society – the way it was originally intended.
Reasserting the ethical foundation of the industry, giving its members a way to start a conversation through The BFSO is just one part, but a very important part. The BFSO is not the beginning of ethics in banking and finance; it’s an articulation of it. It’s how many people operate and how the rest should.
The banking and finance industry is subject to much regulation. Each scandal, whether it be financial planners or ‘rogue’ traders is met with increased regulation, however we all know that regulation and laws cannot account for all possibilities. Markets innovate, new products become available, things start to work in ways never intended and cultures can get corrupted, however big or small. We need to accept these realities and have a language on how to address these issues so that rather than talking of fines, penalties, investigations and inquiries we speak of ethics, morals, society, social contracts, respect and expectations. We need to expand the language of the industry so that these words become commonplace in organisations, at conferences, in teams and in everyday business.
Graduates are now entering the banking and finance industry with these concepts clear. I teach business ethics at two Australian Universities and it is covered at many more. I hope that when my students join the banking and finance industry they’re happy with the career choice they made, that it will satisfy their social conscience, and that they will see that ethics and banking are not incongruous terms. As seasoned members of the industry we should make sure these young people are heard because they may just be the ones that have the stamina and foresight to ensure Responsible Investment really does get that yellow jersey on its back.
Read more by Clare Payne as she explores the ethics of redundancy