Code to recovery

As part of its ongoing efforts to ensure high ethical standards among its members, the CISI has extended its Code of Conduct to apply 24/7 – a move that can help the financial services sector to repair its damaged reputation

The events of the past few years have underlined the importance of financial services professionals acting with integrity at all times. In order to reinforce this message, the CISI board recently confirmed that its Code of Conduct, to which members sign up, now applies 24/7 and not just in business hours. The move has received the backing of both the Financial Conduct Authority (FCA) and Sir Richard Lambert in his drive to raise standards in banking.

Andrew Hall, the CISI’s Head of Professional Standards, says: “We believe it is about behaving in the appropriate manner at all times.”

He cites the recent example of a hedge fund manager who had his authorisation revoked by the FCA after he was found to have travelled regularly on Southeastern trains without having paid his season ticket, dodging fares worth close to £43,000.
"We have a very low level of disciplinary cases relating to code breaches, which is reassuring” “People might question whether the regulator should ban someone from the industry if the indiscretion doesn’t affect their ability to do their job well, but society and attitudes have changed, particularly in light of the recent excesses of the banking industry,” says Hall. “Members of the public rightly ask: if someone behaves like that in their private life, how do they behave in their job?”

Raising standardsIn its drive to promote high ethical standards, the CISI has blazed a trail for the financial services sector in recent years.

In April 2013, the Institute became the first professional body worldwide to require new capital market entrants to pass an integrity test before sitting exams. The IntegrityMatters test has now been completed by more than 20,000 candidates worldwide, and has been adopted by many global financial firms. In addition, all new CISI members are required to pass IntegrityMatters, while all existing members are required to have either passed IntegrityMatters or undertaken the CISI’s Professional Refresher e-learning unit, Integrity & Ethics.

An education in ethics

From courses and case studies to publications and workshops, the CISI has developed a suite of products and services that enable members to learn about integrity and ethics and test their knowledge of the issues involved.

To access these resources, please click here.The CISI also promotes good practice through its Integrity & Ethics Committee, of which Philippa Foster Back CBE, Director of the Institute of Business Ethics (IBE), is a member. Foster Back thinks it is right that individuals working in financial services are expected to act with integrity, whether or not they are at work.

“What it boils down to is to whether the behaviour of an employee has brought an organisation into disrepute,” says Foster Back. “Employees have an obligation to their employer.”

It has been suggested in some quarters that the financial services sector ought to introduce a bankers’ oath to encourage ethical behaviour, but Foster Back questions whether such an oath would work. “Harold Shipman [a British doctor and one of the most prolific serial killers in recent history] took the Hippocratic oath, but that didn’t stop him,” she notes. “It’s better if it’s the company as a whole, and everybody who works for it, that is responsible for behaviour. That is more powerful than getting someone to take an oath.”

Open cultureOrganisations need to create an open culture so that should a company employee or member of an organisation act inappropriately, colleagues or fellow members feel confident enough to speak up, emphasises Foster Back.

“You want the individual to feel they’re not at risk, because it takes so much courage to come forward in the first place,” she says, but adds that many organisations have a long way to go to create such an environment for employees.

An open culture is key to the Institute’s enforcement of its own Code of Conduct.

It is something that the CISI has been encouraging organisations to create through its Speak Up campaign, which is designed to help employees raise concerns with their employer about potential or existing misconduct before the problem becomes entrenched.

“It’s meant to be self-policing, in that when members feel that a fellow member has behaved in a manner they consider inappropriate or unprofessional, they should report it to the Institute,” emphasises the CISI’s Hall.

Members do not necessarily have to have witnessed bad behaviour first hand to report it, he adds, giving the example of a local newspaper reporting that someone has been found guilty of drink-driving while twice over the limit. “A member could send a copy of a newspaper article to the Institute, or one of our regional committees, and then we would get involved.”

A panel hearing and disciplinary action might follow, and members found in breach of the CISI’s Code of Conduct could receive anything from a minor sanction to expulsion, depending on the severity of their actions.

Yet Hall happily points out: “Within our membership, we have a very low level of disciplinary cases relating to code breaches, which is reassuring.”

Such good behaviour should be rewarded, according to a new report from the IBE. The report, Performance Management for an Ethical Culture, concluded that organisations that celebrate integrity in the workplace find that not only do they retain employees committed to values, but they attract top talent too. Yet IBE’s 2013 survey exploring corporate ethics policies and programmes found that more than 40% of FTSE 350 companies do not include ethics in employee performance appraisals.

Social whirlIn 2014, those corporate ethics policies and programmes need to cover individuals’ use of social media.

A recent survey by Weber Shandwick and KRC Research of 2,300 employees worldwide found that 16% have shared criticism or negative comments online about their employer, while 14% have posted something about their employer on social media that they regret.

Individuals that tweet a bigoted opinion on Twitter or complain about their employer or colleagues on Facebook could find themselves in breach of the CISI’s – and, potentially, their employer’s – code of conduct.

“Social media can be something of a minefield for everyone involved,” says the CISI’s Hall. “You might say something that’s detrimental to your employer, and whether you’re identified as logging in from your work PC or you’ve done so privately, the same rules apply.”

Ben Williams, Employment Barrister at Kings Chambers, a leading UK barristers’ chambers, says there are no hard and fast rules about what is acceptable behaviour in employees’ use of social media. “Instead, the law calls for a fair and reasonable response to disciplining offending staff,” notes Williams. “But what exactly is reasonable?

“Straightforward social media policies that have been clearly explained to employees are always the starting point, offering employers some protection in the courts should they ever need to discipline an employee.”

Wherever they are posting on a social network, enjoying a night out or attending a business conference, individuals need to consider whether they are acting with integrity. Now, more than ever, meeting high ethical standards requires round-the-clock commitment.
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Published: 28 Nov 2014
Categories:
  • Integrity & Ethics
  • The Review
  • Features
Tags:
  • professional refresher
  • Membership
  • IntegrityMatters
  • integrity and ethics
  • disciplinary action
  • CISI

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