The announcement by the FCA that disgraced ex-Co-op Bank chairman Paul Flowers is banned from working in the financial services industry, should come as no surprise.
It has all the elements of a salacious tabloid story, a scandal in the very real sense of the word, involving sex, drugs and incompetence.
We may feel confident that this kind of behaviour couldn’t happen in our companies, and certainly that we wouldn’t be the perpetrators.
While Mr Flowers’ behaviour may be an extreme, it is an example of how sometimes those at the top feel that the rules don’t apply to them.
There are perhaps more typical examples – of the boss who parks his Jaguar in the disabled parking bay because it’s more convenient for his office; or the executives who enjoy a box at the Cup Final, despite their company’s ‘no hospitality’ policy; or the senior adviser who massages the figures “just this once” to meet a target.
The behaviour of those at the top sends a clear message about what is or isn’t acceptable.
The ethical lines get redrawn until the behaviour is not seen as unethical or wrong at all.
The fact is that people follow their leaders. It doesn’t matter whether those leaders are chief executives or team managers.
True leaders have high expectations of themselves and of those around them. Their ability to influence can be both a positive quality – because they can lead on ethics – but it can also represent a risk if they do not live up to the ethical values.
Their actions can create a say/do gap – “Do as I say, not as I do”.
What can financial services managers learn from this?
Firstly, that ethical business leadership goes beyond compliance with the law.
Some of Mr Flowers’ behaviour wasn’t illegal. But it was behaviour unbecoming to someone who should have been operating at the highest ethical standards.
Reputations are based, not only on a company’s delivery of its products and services, but on how it values its relationships with its stakeholders. Few will deny the importance of trusting relationships with customers, employees, suppliers and the community. Indeed, the success of any organisation depends on it.
Financial services managers – like any professional – need trust in order to operate.
You are being trusted to have integrity in your dealing, free from conflicts of interest, and to conduct yourself with professional ethics, especially as you are often dealing with investments of people’s hard earned savings.
In this post-truth era, trust is a precious commodity.
Having a reputation for honesty and ethics can differentiate a business, and make it more successful in the long-term by enhancing reputation and increasing customer loyalty.
Developing ethical acumen is not only an essential personal skill, it is also a vital business skill. Customers are attracted to companies whose managers offer the very best, both professionally and ethically.