The mega debate on business ethics is always evolving and diversifying to cover more perspectives. Ideally, the debate has never been greater than today in history. Simply put, being ethical entails learning the right and wrong things and striving to adopt the right ones. However, in the business world, the right things are not always straightforward. This is highly evident in business ethics literature. Firms are usually confronted with ethical dilemmas which do not only involve simply “Should I lie to my manager?” The common assertion that there is always a right thing to do based on moral principles is always in contestation with the argument that the right thing is highly dependent on the current situation (Goel & Ramanathan, 2014, p. 54). Following the contesting ideas on specific ethical dilemmas, News Houses publish an endless series of articles either giving explanations on the different perspectives or even advancing the preferred moral stands of reputable individuals. In a publication dated August 17, 2018, published in The New Daily, Isabelle Lane advances the claim that the business sector is currently the most unethical sector in Australia. The main aim of this paper is to put forward the key arguments in the article, derive and analyse the main ethical issues and give recommendations on the most appropriate ethical decisions.
In her article, Banks, mortgage brokers, real estate agents considered least ethical: 2018 Ethics Index Lane starts by stating that the Australian citizens voted mortgage brokers, real estate agents and bankers the most distrusted professionals. These revelations were adopted from a recent study by the 2018 Ethics Index. The Governance Institute of the organisation suggested that the citizens in the country are worried about the unethical behaviour evident within the financial institutions. This distrust sets in just in the wake of numerous scandalous revelations affecting even the top banks in the country. The Australian society is gradually growing less ethical compared to the previous years
Lane advances the fact that ethics are very key to the Australians. She alludes to the comparison made by the research team on the criticality of being ethical to the deteriorating ethical behaviors demonstrated in various organisations and occupations. Overall, many Australians (87 per cent) admit that ethics are a good foundation for an ideal, well-functioning society. Majority of the respondents implied to be selfless and ready to safeguard the lives of others. According to Lane, the corporate sector topped in the list of the most unethical industries. The sector dropped from the previous year’s ranking from -3 to -9 (Lane, 2018).
Additionally, the professionals working within the business sector, more specifically the bankers and real estate agents, were labelled the most unethical. These statistics reveal a huge drop from the 2017 rankings. The unethicality of the financial sectors is majorly drawn from the executive salaries, corruption and bribery, poor customer treatment and executive bonuses.
Apparently, the rankings are an exact copy of the prevailing activities in the corporate sector. The CBA only in this year alone has been in the limelight for all the wrong reasons. Citizens have withdrawn the trust that they once had for the institution. The top banking company was twice exposed for major issues touching ethical misconduct. In one incident, the bank had been charging the dead advice fees even with the information that they are no more. The top institution was aware that it was charging dead people but only stopped the practice after various exposures (Neil, 2018). Although the institution promised to refund all the fees that was deducted incorrectly, this should not have happened. In the other case, perhaps the most recent and scandalous incident, the bank admitted having been breaching the counter-terrorism financing and money laundering laws. This caused a massive flow of money through drug importers (Eyers, 2018). The bank agreed to pay the huge fine, the biggest in history ($700 million), imposed on it following the charges.
The two cases discussed above are just a mall section of what transpires in many Australian financial institutions. These and other cases create the implication that financial institutions charge the citizens unnecessarily without offering any services. The case of charging dead people was neither the first in history nor the last. The institutions have always betrayed the trust of their customers. The Australian citizens always have to move their funds from one institution to another following fraudulent activities. These allegations not only destroy the reputation of the bank in the public arena but also the trust of the entire sector. The dishonest behaviour portrayed by the modern day banks makes clients question their decisions to entrust a certain institution with their money.
Reasonably, banks are expected to be the custodians of their client’s but not launderers. The money saved in the account should not be utilised for selfish gains. Furthermore, the greatest responsibility of the financial institutions is to help people grow financially. The aspired growth will never occur if all that the banks can do is to launder the proceeds or even allow suspicious activities to go on unquestioned. The citizens owe the banks much more than just being their money custodians. Australians expect the high ranking financial institutions to be truthful. The witnessed gross ethical misconduct and laundering of client’s funds reveals that the Australian banks have failed in their corporate social responsibility. If the banks do not meet the most basic responsibilities, it is very obvious that the other accountabilities have been ignored.
The high standard expectations are very far from being met. The citizen’s faith in the biggest financial corporations has been on a test in the past months following the turbulence experienced in the banking and insurance industry. The numerous corporate breaches are an indication that corporate governance is not being carried out effectively. For instance, the CBA bosses admitted that the corporation had not been operating ethically while it is their duty to ensure the highest form of order within the institution. The inconsistencies should have been identified and addressed long ago before appearing in the public eye (Ipsos, 2018). Realistically, the top employees in the financial institutions collude with the violators to breach the ethical conduct in order to benefit from the proceeds. This collusion necessitates the need to question the professional ethics of the financial institutions’ workforce. Particularly, it is important to identify whether the employees get the contracts justifiably or not. A breach by the top managers contributes to gross misconduct even among the subordinate staff members. The senior workers should, therefore, lead by example and curb any perceived misconduct as soon as it is noticed.
Nearly all Australian banks have been plagued with one scandal after another in the past few years. Rationally, it is a bit hard to figure out how these banks are still able to remain relevant in the industry even after grave mistakes. From just a mere look, it is possible to identify the fact that the decisions made by the concerned authorities are not effective or serious enough to send a warning message. Furthermore, several bank institutions have repetitively been appearing in the public eye for similar mistakes. Conclusively, the Australian banks will continue levying the dead and lying to the masses if a different course of action is not adopted.
Ideally, fines have proved unviable for the past cases and should not be relied upon to clear the mess within the financial industry. The money accumulated from the fraudulent activities s obviously much more than the imposed fines. As a result, the financial institutions can always pay the fines over and over again as long as their mischievous activities are in progress. Similarly, forming the institutions to refund the looted funds will not help in any way. The corporations have already laundered too much such that compensating just a few would not cause any harm. After all, there are so many fraudulent activities that go unnoticed. The revealed cases can always put the banks at the top of the financial ladder.
The financial institutions usually owe the clients and the general public the greatest responsibility (Chau & Clark, 2018). Once the citizens lose their trust in the banks, it can hardly be regained. Simply fining the corporations or making them compensate the affected hardly offers a closure to the public. Although the clients could still continue using the financial services offered by the affected bank, they may still feel oppressed. In such an extreme the affected customers stay just due to lack of better options as most financial institutions can hardly be trusted (Irvine, 2018). Ethically, every firm should be able to satisfy all the set responsibilities for it to be termed as ethical. Reasonably, an institution that has not and is not ready to meet its obligations to the public should not be given any operational permit.
Transparency and accountability need to be restored within the financial institutions (Hooton, 2018). Basically, trust forms a solid foundation for building confidence in the economy. Firstly, profit should not be earned from fraud. Secondly, it is the high time that the bankers recognise that corruption is not a norm or even an easy route to success. They should reconsider their moral values and reevaluate their adherence to the professional ethics. In my opinion, banning the most notorious financial institutions is the best way to go. Although the step could be too severe not only to the banks but also to their clients, the results will be worth the sacrifice. Other banks will take caution and adhere to the conventional ethical practices. I believe that banning the most notorious institutions will not only save our country but also serve as an avenue of closure for the affected parties.
Additionally, cleaning up the corporations could also help in restoring the reputation of the corporate world (Soos, 2018). The workers should be constantly assessed to determine their moral standing and clarify whether they are fit to work in the institutions. Those who do not pass the moral test should be dropped with an immediate effect.
Conclusion
Conclusively, the Australian community should reconsider the morals of the entire motion. Although the financial institutions topped in being the most unethical, there are definitely accomplices in the other sectors. The moral decay in the corporations is just a report of how ineffective our educational systems are. As much as we strive to impart knowledge to our learners, the need to grow better and morally upright adults should not be overlooked. The root causes of unethical practices have their roots in the entire population and should not be blamed on a single sector.
References
Chau, D. & Clark, E., 2018. Banking royal commission: How did we get here?. [Online]
Available at: https://www.abc.net.au/news/2017-11-30/banking-royal-commission-how-did-we-get-here/9210248
[Accessed 21 September 2018].
Eyers, J., 2018. Money laundering scandal: what CBA admitted to, and why it happened. [Online]
Available at: https://www.afr.com/business/banking-and-finance/financial-services/money-laundering-scandal-what-cba-admitted-to-and-why-it-happened-20180604-h10xm3
[Accessed 4 June 2018].
Goel, M. & Ramanathan, P. E., 2014. Business Ethics and Corporate Social Responsibility – Is there a Dividing Line?. Procedia Economics and Finance, Volume 11, pp. 49-59.
Hooton, A., 2018. Why good people do bad things. [Online]
Available at: https://www.smh.com.au/money/banking/why-good-people-do-bad-things-20180716-p4zrq5.html
[Accessed 21 September 2018].
Ipsos, 2018. Australians lose faith in corporate ethics in wake of banking scandals. [Online]
Available at: https://www.ipsos.com/en-au/australians-lose-faith-corporate-ethics-wake-banking-scandals
[Accessed 21 September 2018].
Irvine, J., 2018. Breach of trust: how Australian banks went bad. [Online]
Available at: https://www.smh.com.au/business/banking-and-finance/breach-of-trust-how-australian-banks-went-bad-20180420-p4zarc.html
[Accessed 21 September 2018].
Lane, I., 2018. Banks, mortgage brokers, real estate agents considered least ethical: 2018 Ethics Index. [Online]
Available at: https://thenewdaily.com.au/money/consumer/2018/08/17/ethics-index-2018/
[Accessed 21 September 2018].
Neil, M., 2018. Commonwealth Bank promises to refund dead superannuation members’ fees. [Online]
Available at: https://thenewdaily.com.au/money/finance-news/2018/08/16/commonwealth-bank-refund-superannuation-fees/
[Accessed 16 August 2018].
Soos, P., 2018. Banking inquiry has already exposed shocking corruption – but it needs more time. [Online]
Available at: https://www.theguardian.com/australia-news/commentisfree/2018/mar/22/banking-inquiry-has-already-exposed-shocking-corruption-but-it-needs-more-time
[Accessed 21 September 2018].
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