The importance of ethics needs to rise to the top of risk managers’ radar with an unheralded sense of urgency, writes our editor Lauren Gow.
“Choices must now be made,” declared Justice Hayne in his final damning report from Royal Commission into the banking and financial sector. As the dust begins to settle on what ramifications will stem from the report, there is a growing acknowledgment that what went wrong for so many Australians at the hands of a few can neither be understood nor prevented from reoccurring without first examining what has gone wrong ethically.
The importance of ethics needs to rise to the top of risk managers’ radar with an unheralded sense of urgency. ‘Saying sorry and promising not to do it again has not prevented recurrence,’ Hayne said. ‘The time has come to decide what is to be done in response to what has happened.’
The role that the risk management community can and should play in this new world order begins with the systematic analysis of individuals and organsiations far beyond the financial sector.
Risk managers will now need to ask increasingly difficult questions of their organisations. If a firm preaches the value of its corporate sustainability projects alongside company values in annual reports, is there widely available proof available for shareholders and others to view? Are dealings with vulnerable customers being vigorously tested and correctly measured and monitored to the highest standards?
There is little doubt that the conversations which need to be had will be difficult and unpopular. As humans, we naturally pull away from situations which make us uncomfortable. But as risk managers, you should be used to asking what needs to be asked, saying what needs to be said and being the bearer of bad news. Is it fun? Probably not. Is it important? Absolutely. Now is not the time to shy away. Ethics is not about what businesses can and can’t do but what they should and shouldn’t do.
For more thoughts on ethics, check out this new piece from our Asia Pacific team.