The Role of Risk in the Banking Industry
When the report of the Financial Services Royal Commission was handed down more than a year ago, it was a shock to the system. But have practices in finance or any other sector actually changed?
Westpac was recently caught in a scandal, when people using child pornography used the bank to transfer money to overseas accounts. AMP opened new accounts for aggrieved customers, without their knowledge, then charged them fees.
In evidence to the Commission, former Treasury Secretary and NAB chair Dr Ken Henry pondered whether the cause of business misconduct might be capitalism itself. “The capitalist model is that businesses have no responsibility other than to maximise profits for shareholders,” said Henry. The consequence of this mindset, he argued, is that customers are treated in an instrumental fashion: as a means to profit rather than as human beings with rights and interests. This same might be said for the environment, or animals. If profit is King, who or what plays the role of serf?
Is ‘business ethics’ an oxymoron? If not, what would it take for business to be a morally transformative force in Australian society?
One of Australia’s most respected experts in business ethics, Professor Elizabeth Sheedy of the Macquarie University Business School has co-authored a new study of unethical behaviour in major organisations which won a major international award. In this discussion she talks about some of the systemic problems identified in the report, and the business cultures which allowed, and encouraged, problematic practices to flourish.
Listen to the full discussion here.
Via Radio National, 12 February 2020