Seven years after the collapse of Lehman Brothers and the onset of the Global Financial Crisis, we are witnessing yet another series of financial scandals. Is it possible to teach ethics, professionalism and accountability in the finance industry? What are the virtues of finance? These questions are the focus of this #think public lecture:
Professor Thomas Clarke, Director of the Centre for Corporate Governance at the University of Technology Sydney and a Professor of Management with UTS Business School points to the ways in which the Global Financial Crisis still affects us.
“Finance has continued to expand in an unforeseen way,” he says. “The purpose of finance…is to service our economy, but something seems to happen when the financial economy becomes apparently larger than the real economy, and the real economy is servicing the financial economy.”
The result of this, he says, is an immensely complex financial system that penetrates every aspect of our lives as businesses, governments and households - the “financialisation of everything”.
While in in some ways this can makes our lives easier, for example with mobile money, it also subjects us to financial forces that are sometimes dangerous and unpredictable.
This is a systemic, multi-dimensional problem that requires a multi-dimensional solution encompassing legislation, regulation and surveillance, as well as professionalism, ethics and a culture that encourages and rewards this behaviour, Professor Clarke says.
He asks the question: Can there be ethical leadership that matches what the public wants, or is the ethics agenda simply a logic to recover the reputation of financial occupations?
Dr Ace Simpson, a key researcher on The Virtues of Finance Project and member of the Centre for Management and Organisation Studies turns to virtue as a response to ethical issues – “what would a person of character do?”
The Virtues of Finance Project seeks to distil what key people think are the main lessons from the GFC and what they regard as important "virtues" of the finance sector.
"We want to tease out the lessons for personal and leadership practices, standards and beliefs," Dr Simpsons says. "The finance sector is woven into the fabric of our lives at all levels, it's critical to our society and our institutions, so we want to explore what are the virtues that are considered important, that are considered relevant."
Dr Walter Jarvis, Professor of Management with UTS Business School, questions whether ethics in finance can actually be taught.
Teaching “Business Ethics”, he says, is just teaching ethics that have been uncritically appropriated by business. Instead of teaching ethics, we need to help young people learn ethics. How do we go about this?
“You’re not going to do it through case studies; you’re not going to do it learning from books; you’re not going to do it in any other way, in my conviction, than through experience – to experience the issues that managers and leaders will face.”
This looks like learning through intensive personal engagement, Dr Jarvis says, in “everyday” workplace experiences, so that students can appreciate the reality of situations they may find themselves in and the value of ethics education.
Further Reading:
Moral dilemma when money’s at stake