ACCA and CFA Institute partnered to celebrate Global Ethics Day. The debate, hosted by Sirpa Pietikäinen, MEP at the European Parliament in Brussels, discussed bringing back trust, ethics and professionalism in today’s and tomorrow’s financial markets.
Inspired by the success and resonance of Earth Day, and organised by the US-based Carnegie Council, Global Ethics Day provides an opportunity for organisations around the world to hold events, and to explore the meaning and role of ethics in our globalised world. This was precisely the aim of the event, jointly organised by CFA Institute and ACCA, in collaboration with Sirpa Pietikäinen, MEP.
In the wake of the financial crisis, trust in the financial industry has seriously declined. Speakers were invited to share their views on whether enough is being done to rebuild this trust, and how we can reconnect finance with society.
Sirpa Pietikäinen, MEP set the tone : “Ethics is a very acute topic. We should have learnt the lessons from the financial crisis, however a lot more effort is still needed. Is there something wrong with how we manage transparency that would lead to the wrong incentives? Climate change, how it affects people, the way SDGs are measured, ESG factors… how do we implement all this?”, Sirpa Pietikäinen questioned, opening the debate.
Discussion revolved around the role of policy makers, professional bodies and financial users’ organisations in helping provide clear ethical standards for finance professionals and enhance ethical behaviours, as well as encouraging finance professionals to take action when they face an ethical dilemma.
Helen Brand, OBE, ACCA’s Chief Executive said: “We are all seeing consumers and governments are sharpening their focus on ethical and sustainability issues. Buying habits are changing. Regulations are tightening and ethical business practice is no longer a nice to have, but on many aspects - such as human rights, waste management and climate change - it’s the law. And businesses are under more scrutiny than ever before about their impact on society from the media, consumers, governments and their own employees. Many professional qualification bodies like ACCA have thus a crucial role to play in raising awareness and training the finance professionals of tomorrow on ethical matters and professionalism”.
Tony Tan, CFA, Senior Head, Ethics Education and Professional Standards, said “To improve trust, look towards generating positive outcomes for your clients. This comes from being a trustworthy person. And the three key attributes of trustworthiness are: demonstrating competence, behaving ethically and caring for your customers by putting their interest first.”
Discussion revealed that it is important to keep pushing the boundaries of what we’re understanding about best practice in a fast evolving world, and despite being in an information age, more knowledge may not automatically means better decisions. For example for consumer credit, improving knowledge through greater financial literacy seems a reasonable way to proceed. On the other hand, the ‘nudges’ provided within a behavioral science approach may provide more dynamic and digestible prompts for consumers to do the right thing. And in doing so to start from a realistic acceptance, that consumers have certain behaviours, which may not always be rational or optimal. So the solution may be to incorporate behavioural science where possible while still laying the foundation of improved financial literacy.
Because digital advances - such as the use of AI - have introduced new ethical complexities, which businesses must identify and manage to survive, speakers also shared their views on whether work carried through by artificial intelligence should be subject to the same standards of ethics as employees, and whether companies were doing enough to ensure this.
Josina Kamerling, Head, Regulatory Outreach EMEA at CFA Institute closed the session in announcing the Award ceremony of the 7th Global Competition of the Ethics and Trust in Finance award - supported both by CFA Institute and ACCA - which will be hosted by the OECD in Paris on 18 November 2019, with a keynote address by its Secretary General Ángel Gurría. This global competition for innovative ideas on ethics, responsibility and trust in financial activities promotes greater awareness among young people throughout the world concerning the benefits of ethics in finance. It is open to young people, aged 35 years or younger, from throughout the world – professionals as well as young academics- , and invites creative papers setting out analyses or proposals for innovative ways to promote ethics and trust in finance.
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