BAI: 'Significant Disconnect' Between Leadership, General Staff on Ethics, Culture, Conduct Risk

MBA NewsLink Staff

July 16, 2019

BAI, Chicago, said its survey of more than 450 human resources risk and compliance leaders and general employees at financial services organizations found a strong disparity in cultural ethics.

BAI presented the findings of the survey in a recent webinar, BAI Banking Outlook: The State of Culture and Conduct in Financial Services. The research identifies the positive impact of Ethics or Conduct officers on an organization and the importance of built-in safeguards around incentive-based pay.

"Financial services leaders from community to large organizations should have a clear understanding of who or what drives the organization's ethical and cultural backbone. Our research found that having a Conduct or Ethics officer is an essential component of this process," said Karl Dahlgren, managing director of BAI. "Even in the absence of this role, financial services leaders need to ensure guardrails and ethics policies are clearly conveyed, followed and understood amongst all employees, protecting both customers or members in addition to the organization."

Key findings:

--91% of HR, risk and compliance leaders indicated that their organization has an Ethics Officer, but less than half (42%) of general employees said their organization had someone in this position.

--85% of financial services leaders surveyed feel as though their organization is doing enough to prevent unethical behavior, and 90% of respondents felt that ethical expectations are made clear within their organization.

--HR, risk and compliance leaders at regional institutions (47%) were less likely to rate the organization as highly ethical compared to large (79%), super-regional (71%) and community institutions (83%).

--Organizations that monitor engagement, such as reviewing employee feedback or engagement surveys, are more likely to have practices in place to ward off unethical behavior.

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