The report states that if team members at Deutsche Bank score less than 80% in a mandatory online test on compliance, they are red-flagged to their team leader and their career could be affected. And at Goldman Sachs, senior bankers have to spend hours debating a fictional case study about a big player on the brink of collapse.
At Barclays, CEO Antony Jenkins set out the bank’s “Transform” program after the Libor scandal. Sessions for senior leaders "take place in a room at headquarters styled like a Roma agora to encourage open discussion". Staff members start watching this clip (take a look at it). Then, they engage in case studies sessions which echoes the sort of dilemmas they face daily. They are also asked to vote on the best action after watching video scenarios like the ones we examine in class. Barclays’ workshops are reportedly led by 1,500 “values leaders” trained by a faculty of outside experts. Besides training, they need to change the structure of incentives and the organizational culture. They should measure "good conduct" and they should give it weight in bonus decisions, for example.
Mr. Jenkins argues that “I’ve been clear that [this] is a five to 10-year journey, so this isn’t sprinkling a bit of PR magic and life suddenly gets better.” Humm...
I think bankers definitely need ethics training, but I do not think that large scale online programs are an effective method. In my opinion, the best way to train employees on making ethical decision making is to create a company culture based on making ethical decisions. These programs will do little, if anything, to deter unethical behavior if senior management is not following the ethical standards they expect their employees to follow. If anything, these online ethics training programs are creating accountability - if an employee makes an unethical decision, management can point to the training program and say that he violated the company's code of ethics. However, calling these programs "ethics training programs" is idealistic.
ReplyDeleteThe steps being taken to attempt to instill business ethics in banks are positive actions, but I feel that in the long run they might not work. These banks have been working for a long time in what seems to be an unethical way, so the chances these workshops and classes for employees will not have much of an effect. These banks are used to a harsh, competitive, survival way of doing business, which is hard to change. In order for this to be successful everyone would need to be aware of the goals and start working in more fair ways. This I just can’t see happening because it would be too much work for the banks, and could possibly be detrimental to the business.
ReplyDeleteThe ethical training programs put in place by the banks are complete nonsense. These are public relation schemes executed in order to appease public perception and opinion. The truth of the matter is employee conduct will be driven by how they are rewarded and incentivized. It is clear that employees at banks are rewarded based upon the revenue they generate for the firm. Bank employees are rewarded huge bonuses based upon the revenue they generate for the firm. Alternatively, those that do not generate the expected level of revenue are fired. The work environment is extremely competitive. Therefore, employees are incentivized to do whatever necessary to make money for the firm, not only to justify their salaries, but also to maintain their jobs. Overall, all though these ethical programs may be in place their is no incentive for employees to act in a manner according to them. The article points out that the employees are expected to pass a certain test - yet it is important to remember that these are very smart, well educated individuals working at these banks. There is no denying that these people can pass these tests with ease. The true question is whether or not these employees will act ethically on a daily basis. Overall, the truth is that there is no incentive for employees to act ethically. The incentive is to generate revenue for the firm by any means necessary.
ReplyDeleteI think ethical training is necessary for bankers, but the methods/ training need to be implemented effectively. Online programs will not solve much, ethical training needs to be implemented in the company culture. It all starts from the top thus upper management should be targeted first. Then the company should incorporated real scenarios in order to train the employees. Online programs are only effective up to a certain point.
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