Here’s a quote:
Good corporate governance practice is an important ingredient in creating and sustaining shareholder value, and ensuring that behavior is ethical, legal and transparent.
Nothing special there. Much the same turns up in most value statements. Roughly translated, it says “lets make our business succeed rather than fail, and let’s do that by playing fair”.
Most would agree. So much so, that I’m not sure why people insist on stating it in lofty terms and enshrining it in fancy bold type. It’s like saying maybe we are not really like that but we’d like to be.
In the case of this particular quote, that turns out to be the case. It comes from the Barclays Bank website. It’s attributed to Chairman of the board.
This month, the bank was fined almost half a billion dollars for manipulating market interest rates to it’s own advantage. As markets are generally a zero sum game, that means to someone else’s disadvantage – in this case, clients, customers and counter parties.
The practice is not what you’d call “fair”. It’s definitely not ethical. A court of law would probably consider it illegal because they didn’t tell anyone. So much for transparency. And as for “creating and sustaining shareholder value” a half a billion fine doesn’t help.
Barclay’s manipulated, LIBOR, virtually the official benchmark for huge numbers of financial products. If you have a big trading position in one of them, a fudge of a few basis points can turn a dodgy decision into a million dollar win – something not lost on bonus-conscious traders.
Do values really need to be stated?
Think of someone you respect. Do they stand up and say “Hey, I’m really ethical.” Unlikely. The people and the institutions that you respect and trust are the ones who act that way.
How do you honor this in the breach? Rigorous honesty is not always humanity’s default position. This is not a Barclay’s problem. Business is riddled with conflicts of thought and action. So is daily life.
The place to build values is at the coalface – how you treat your colleagues, your customers and your community.
It’s not that hard.
You don’t need to reflect on grandiosity. Just look at your behavior: “Is it fair?” It doesn’t mean you are not tough, focused or hardworking. It just means you can be trusted. If everyone does it, it seeps into the essence of your business. That attracts customer loyalty and eventually manifests in shareholder value.
Trust is a big word, but it is built by small actions that build values over time. They are an outcome of behavior, not a starting point.
Dan Ariely, in his book on the trouble with staying honest, puts it very succinctly. Here's another quote:
a small, triggering nudge at the moment of temptation… is more effective than an epic sermon meant to permanently transform your soul.
