Corporate Ethics; The Chips are Down

The economic and social turmoil of the last few years has changed the corporate landscape. Tightening regulations and scrutiny of company practices has increased exponentially. Underlying all of the changes and at the core of the regulatory revolution lies the fundamental principles of business practice, and the more you look at it, the more it seems to condense down to one basic concept: ethics.

When we talk about ethics in business it has had a rather ‘fluffy’ and somewhat ephemeral nature, a ‘nice to have’ but not a ‘must have’ for most businesses. Some might wonder why I’m talking about ethics in the anti-money laundering arena, but at the end of the day, when the fat lady sings and the chips are down, and any other metaphors you care to add, who we are doing business with, and how we are doing business with them is vital to securing our company’s future.

The Arab Spring has shown the canker of corruption that can undermine entire societies. According to the World Economic Forum, corruption increases the costs of doing business globally by 10 per cent. Proactively engaging in the fight against corruption and embedding ethical conduct increases firms’ standing with their share-holders and attracts and retains employees. Firms with robust anti-corruption controls and strong ethical values also have less incidence of fraud. Sound corporate governance, robust internal controls, strong messages from the top that are woven through an organisation and reach every employee, are not only the best defences against fraud, but also cut costs. By firmly aligning the firm in the right direction an ethical business would not need major course changes with each piece of new regulation.

In the past risk management, the art of avoiding disasters, wrestled with the onerous title of being the harbinger of bad news. However, in reality steering clear of the rocks, is fundamental for firms, their employees, their reputations and their finances. The Concordia disaster was 'allegedly' caused by the captain not sticking to the planned route, the captain ignored the existing ‘systems and controls’ .  As we get older we may all become averse to change but the changes that are brewing in the world of finance are exciting and full of possibilities for a more transparent, accountable, fairer and ethical society.

If we are planning on staying ahead in our field, and let’s face it, criminals are evolving faster than we can, unencumbered by heaving bureaucracy and red tape, we have to match their processes. We have to think nimbly, address the risks, and consider the why’s and wherefore’s of how and with whom we are conducting our business.

Due diligence isn’t just about knowing where your client is from, but do they align with your goals, visions and ethics?

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