An alarmingly number of financial services executives have admitted that strictly adhering to ethical standards inhibits career progression at their firm.
A survey of 382 financial executives across the world, including Australia, found that 53% said that career progression at their firm would be difficult if they were not “flexible” on ethical standards, and just 37% believe their firm’s financials would improve if the ethical conduct improved.
However, according to the survey, financial executive do believe that it is important to create a stronger ethical culture since the financial crisis. Ninety-one percent of survey respondents placed equal importance on ethical behaviour and financial success.
The study, A Crisis of Culture: Valuing Ethics and Knowledge in Financial Services,
conducted by the Economist Intelligence Unit and sponsored by CFA Institute, also looked at the critical issue of knowledge in the industry. While 97% of respondents said that they are well qualified for their own role, 62% admit that their colleagues know very little about what goes on in departments beyond their own.
Paul Smith, Asia Pacific MD of CFA Institute, said: “CFA Institute sponsored this study in order to take the temperature of the financial services industry as we begin to emerge from the financial crisis. The results show that the industry has further to go on its journey to drive up ethical standards and embrace professional education.
“It also shows signs of a shift in culture by recognising the benefits of global ethical standards and industry knowledge, and addressing agency issues. If we are to move the industry forward it is incumbent upon everyone within the industry to align their personal and organizational values with those that serve client, shareholder and societal needs. Aspiring to adopt these values will create more resilient firms and a stronger future for finance.”
The study also found that 61% of financial executives highlight gaps in employees’ knowledge as a significant risk for their firm; 59% agree improving knowledge of the industry as a whole would help make their firm more resilient; and 12% say they are confident in their knowledge of the global regulatory environment.