A Chartered Insurance Institute study has shown managers more worried about rules than good outcomes for their customers.
The report includes data from a MoralDNA personality profiling of 24,000 financial services professionals, with new analysis revealing that managers rank in the bottom quarter of employees based on how likely they are to show the ‘ethic of care for others’ at work.
This means that managers are among the group of workers most likely to suppress empathy and are less concerned with the impact of ethical decisions on people compared to other employees.
The report also finds that financial services managers are more likely to be concerned about complying with the rules and consider principles in their decisions and behaviours, than they are about getting good outcomes for their customers, their stockholders and other stakeholders.
Sian Fisher, chief executive of the CII, said: “The new regulatory focus on business culture is an opportunity for individuals and firms to improve public confidence in the financial services sector.
“However, it is no longer enough for individuals and firms to simply ‘comply’ with regulators – we must aspire to ‘go beyond compliance’ and drive up ethical standards within our industry.
“As a professional body, it is important that the CII supports our members and the wider sector in developing ethical cultures”.
Ann Francke, chief executive of the Chartered Management Institute, said: “Mis-selling, rate fixing and rogue trading have tarnished the reputation of the UK’s world-leading financial services sector.
“We need leaders and managers to redouble their efforts to improve company culture. Leaders have to enable, empower and reward people to do the right thing, not just the thing that looks profitable in the short term.
“Without strong ethical cultures, regulation and compliance will never be enough.”
The report calls for financial services to provide ‘good leadership’ through 9 key steps:
1) Discuss and re-define the business’s values.
2) Ensure clear leadership on the values – set the tone from the top.
3) Upskill employees to help them understand what behaviours are acceptable.
4) Build a commitment to professional standards into staff development from the start of your career.
5) Engage with the spirit of regulation, rather than resentfully box-ticking.
6) Reward and recognise ethical behaviour.
7) Cultivate diversity through recruitment and promotions.
8) License people to discuss difficult issues without recriminations.
9) Constantly review and communicate ethical principles to employees.
The full report can be downloaded at www.cii.co.uk/44039.
