Kristin R. MoyerRick DeLotto here. Reputation management concerns are spurring banks to label lawbreaking by executives and employees as “ethical lapses” for errors in judgment, and label “errors in judgment” as mere miscalculations. Corporate ethics is past the point where mere careful consideration of its “dictates” is required. Complete, total, enthusiastic and auditable acceptance of and compliance with corporate policies and common community standards are necessary to reduce reputation risk and increase the perception that use of the bank enhances the social stature of the client. Ethics enforcement will serve as the preferred method to tie corporate social responsibility, regulatory compliance and strategic planning into a manageable bundle.
Because of this, we make the following Strategic Planning Assumption:
By 2010, 50% of U.S. banks will investigate adoption of “ethics management” technology to detect and remediate staff deviations from corporate policy.
See Predicts 2009: Banks Must Confront Reputation and Performance Issues for more details and advice.
Like any good prediction, this needs to be unpacked at least a little. Operationally, ethics should be construed quite broadly- first, you need to be operating as a “virtuous person” yourself in your enterprise’s set of social contexts-your staff will mirror your behavior. Next, you need to provide explicit, ongoing guidance to your team as to what proper behaviors are, where the operational guidelines can be found, and what they need to do if faced with an ethical quandary.
I have the real fear that reliance on reporting systems and highly specific management systems to accomplish this leadership function will degenerate into a simple, easy to conduct, report and audit yes/no checklist.
Like this, for example:
- Accepted bribes, gifts or other considerations to influence my behavior.
- Shared bribes, gifts or other considerations with team.
- Offered bribes, gifts or other considerations to influence someone else’s behavior.
- Claimed reimbursement for use of bribes, gifts or other considerations to influence someone else’ behavior but kept it for myself.
Ideally, an “ethics management” system will enable a way of proving that the “tone from the top” on ethics and compliance issues was set, distributed, tracked and tested to make sure it was understood, that appropriate instructional materials and classes were provided, and enable managers to ethically assert that malefactors “knew they were breaking the rules” and went ahead anyway. I will be researching the tools for this shortly, and let you know how it comes out.
Comments Off
Category: Executive Decisions operations Uncategorized Tags: banking and investment services, corporate social responsibility, ethics management, regulatory compliance
