7 July 2012

Financial Culture and Morality

Two recent news stories have brought the subject of corporate culture and financial morality to our attention.

Firstly there is the Barclays LIBOR-fixing scandal and the corporate culture that seems to have prevailed there. If individuals are prosecuted (and that is probably the right thing to happen) then it would be interesting to know whether those individuals were aware of the consequences of their actions - sufficient to make their own judgements about whether they were engaged in wrongdoing or not. I suspect that they were, although it's possible, I suppose, that they did not understand the full ramifications of their job.

But the larger responsibility must remain with their employer - Barclays, and perhaps other banks yet to be revealed - who gave them a globally significant job to do without sufficient monitoring and, more to the point of this blog, within a corporate culture which apparently did not include the appropriate level of ethics.

I suspect that there are many similar situations in the financial world, and only when something goes publically wrong or is somehow brought to light will we all be outraged yet again.

What is needed is a responsible and ethical culture. But that needs more than a quick training course, for example. It's a question of changing attitudes and culture. And that takes time. The sooner that individual financial institutions have less of an impact on all of our lives the better. They are currently hardly worthy of our trust.

And the second news story? That'll be my next blog.

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