Little has changed in the banking industry since the crash of September 2008, emphasised Paul Moore, the former head of group regulatory risk at HBOS, when he spoke to a group of bankers and others, convened by Caux Initiatives for Business in the London centre of Initiatives of Change on 10 November 2009.
Moore, who became known as the HBOS whistleblower after testifying before a Treasury Select Committee in Parliament, said that the Financial Services Authority had been allowed to reconstruct itself, continuing much as before and no one had been held to account. This was despite calls from all the political party leaders for an investigation. The influence of the City of London, including on party political funding, was proving too great and was a huge obstacle to constructive change, he said.
The highest business echelons operate outside the ethics which individual executives may still feel in other areas of their lives, Moore said. He quoted from the Enron whistleblower, Sherron Watkins, who had become convinced that a ‘faith-based’ change was needed to alter the ethics and mentality of the financial sector.
Moore made several suggestions for change:
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Create an ethical framework for the financial services industry, including a possible code of integrity or a Hippocratic Oath for bankers;
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Formalise ethical training for staff which should be more intensive for higher echelons;
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Remove individuals who personify a dangerous culture from positions of power;
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The subsidiarization of business so that it is not allowed to self-regulate;
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Business schools should also improve their teaching of ethics.
He emphasised that there was no conflict between ethics and business success. But the industry’s bonus culture, cut throat competition and a cosy club networking all conspire to remove ethical principles from decision making and focus solely on profit generation. Profit had become the end and not the means.
Moore admitted he would not have spoken out if he hadn’t been sacked by the then HBOS CEO, James Crosby, for having raised challenges to the Bank’s sales-focused strategy. Those with a job or reputation to lose often believe the risk of speaking out is too great. The experience of being sacked freed him and allowed him to reflect on what was right.
He concluded that the financial crisis should be seen as an opportunity for global change.
Tim Evans
English