More parliamentary inquiries and regulation won’t help leaders operate more ethically
No regulation or parliamentary scrutiny will stop people from behaving unethically if they don’t see it as that.
The LIBOR scandal (caused by interbank rate fixing emanating out of the city of London) is but more evidence that something is amiss with banking culture, not just in the UK. Attempts by traders to fix this rate used by all banks to help set lending rates for mortgage customers, potentially resulting in higher costs for the public, is an abuse of trust – a form of cartel behaviour. It is not clear at this stage how much real pain (not just financial) the LIBOR scandal has caused its business or retail customers but time will reveal this more clearly.
Bob Diamond’s statement last year, to a parliamentary select committee that the “time for bank contrition is over” in hindsight now looks like the height of arrogance. The “greed is good” arrogance in banking however plays out in much more nuanced and subtle ways.
What is required is a calmer more considered approach to culture change. This is not going to be generated through more parliamentary committees, more regulation or more customer demonstrations on the street.
In our work on Values Based Leadership, real conversations about real choices that leaders have to make in their organisations everyday is an important start. The inability for some to think about the consequences of their decisions on stakeholders, even to recognise who their stakeholders are or think more integratively across the company’s value chain is a skill issue – one lost through a generation of short termism, something even market analysts and other watchdogs are clearly not innocent of. Business complexity today blurs the line of sight so trying to get clear vision about impacts down the line is much more challenging, but not impossible for clever banking minds. Important also are conversations about what happens when two values of a bank itself pull in different directions, what moral compass does a leader turn to then? Until banks recognise that transformative work is needed at a ‘micro-culture’ level to help intact teams learn to make principle centred choices, real change will not come about or be sustained.
Telling someone that they must stop doing something they don’t believe is wrong is a very short term fix. And so is the rolling out a new set of corporate values.
Written by Meena Thuraisingham, Director and Principal, TalentInvest
For more information on the Values Based Leadership approach contact firstname.lastname@example.org
Written by Meena Thuraisingham
Director and Principal, Talent Invest
Meena Thuraisingham is a consultant, author, executive coach and thought leader in the area of People and Culture. An organisational psychologist by training, she founded TalentInvest, a niche consulting practice, advising global clients in the UK, Asia and Australia in Capability and Culture. Meena is also a regular speaker internationally on leadership effectiveness and culture change.
Her published books are The Secret Life of Decisions, Careers Unplugged and Derailed!. Get Your Copy Today