Ethics in Banking: Best Practices

Here’s an ethics story that isn’t about a scandal (though it does mention one):
Banking Matters: A strong ethics code and a thriving business (by By Karina Robinson in the International Herald Tribune)

Here is a short bit of the article:

The banking industry generally believes that internal behavior, like employee rules on hospitality, cannot be separated from external activity, like local community outreach.

Socially responsible behavior inside and outside a bank also translates into good business. So-called ethical funds, for example, are inclined to buy shares of financial institutions whose reputations do not distract from the core business of banking.

Every major international bank has a code of ethics, many of which have been tightened further since governance concerns have shaken the likes of Citigroup, which announced in October 2004 that it would shut its private banking unit in Japan after transactions violations.

But Standard Chartered, based in Britain, is arguably at the forefront of the industry in incorporating ethics, corporate governance, community relations and diversity into its operations.

I can’t think of any industry where ethics would be more important than in banking — partly because financial institutions are such a crucial part of the infrastructure of the entire world economy, and their trustworthiness is bound to have serious implications for countless individuals and institutions. Further, banks (like charities) depend almost entirely on trust to sustain their business — a bank that shows itself not to be trustworthy will very quickly find itself short of customers. Of course, unlike charities, the trust we place in banks is sustained in part by a pretty significant regulatory system.

Standard Chartered’s Code of Conduct
Standard Chartered: Our Beliefs — Leading the Way

1 comment so far

  1. […] (#6) appeared in a blog entry called “Ethics in Banking: Best Practices”, as well as in a more recent one called “The Pay Czar’s Ethical […]

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