Your IndustryNov 26 2015

The only way is ethics

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I wanted to dislike this book. My prejudice was rooted in the acknowledged lack of academic basis and belief that regulation, compliance departments and regulators are always purist agents for positive change.

Nuance, politics, unintended consequences and more malign influences are not allowed in Mr Jackman’s analysis of the regulatory landscape.

We can take issue with his unnuanced narrative of the development of conduct regulation in financial services in the same way we can for his consistent exhortation for “compliance” to do something without defining what compliance is (although I think we all understand, but it is still an irritating stylistic tic).

However, Mr Jackman’s explanations in the practical sections of his book of what a compliance department, and business, could do to improve outcomes for society and customers are excellent. Rooting conduct regulation in ethics and linking the two has clear advantages, and because Mr Jackman is also rooted in this area means he can give authoritative advice and tools for compliance and governance professionals to effect change in their organisations. His chapters on culture formation and governance should be required reading for all risk professionals (and boards).

Mr Jackman’s main concern is on increasing the ethical maturity of companies. This change in maturity is carried out through proper consideration of regulations themselves rooted in ethics which are then sensibly considered and acted upon as the entity becomes more mature. The latter discussions on community and the place of companies in it provide a positive normative model. Companies moving beyond compliance, using the corporate faith model Mr Jackman predicates is surely the ultimate goal of any ethical chief executive and regulator – to be able to dispense with the compliance department because each of the other corporate actors behave in an ethical and sensible way.

Mr Jackman also has an essentially positive, but unnuanced view of human behaviour in organisations. His description of ethical space that encourages the conditions that will mean that individuals are able to make the right ethical choices is aspirational, but problematic. If the causes of the great recession have taught us anything, it is that given a choice, not everyone will take the ethical route even if it is open to them. In theory terms, this book owes a lot to authors such as Christine Parker in the Open Corporation, but Mr Jackman also offers practical solutions and pathways to achieving more ethically mature companies.

Published by Wiley

Mark Spiers is principal, head of banking, investments and lending for regulatory consultancy Bovill