OPEN LETTER: How to recapture our “lost generation”

An important letter to the Financial Times from 17 leaders of UK financial institutions caught the eye of SIMON THOMPSON. It committed them to “do all we can to foster and encourage a culture of professionalism and integrity”. Here’s his open letter in reply.

The letter from Marcus Agius and others in the Financial Times calls for the reinforcement of an enlightened culture based on professionalism and integrity in the financial services industry.

Rebuilding the industry’s human capital is as important as rebuilding financial capital if we are to regain public confidence and trust.

The wherewithal to make this happen already exists in the professional banking and financial services institutes still remaining in the UK. Recent independent research commissioned by the Chartered Institute of Bankers in Scotland, covering respondents throughout the UK and across age, gender and social demographics, shows clear public support for the re-introduction of professional banking qualifications.

Both retail and business customers value these as an external validation of precisely the sort of commitment to professionalism and integrity Mr. Agius and others would like to see.

Financial services leaders wishing to take personal responsibility for embedding a culture of professionalism and integrity should take the following steps:
1. ensure that senior executives show an ongoing commitment to supporting the higher ethical, professional and technical standards being set by the banking and financial services institutes
2. work with the institutes to re-professionalise the “lost generations” of bankers, now in middle-management positions, who were never given the opportunity to pursue professional banking qualifications and professional affiliation
3. demonstrate their support for and encourage the advancement of individuals gaining relevant banking and financial services qualifications and professional membership
4. make public their organisations’ plans for reprofessionalisation.

For many years, customers and staff have called on their organisations to promote professional qualifications and membership but, with some exceptions, these have not been widely supported by the industry.

Perhaps the knowledge and skills, values and behaviours inculcated were seen as being somehow old-fashioned. Yet, as we now know, these are precisely the attributes that are needed to support a culture of professionalism and integrity.

Simon Thompson
Chief Executive
The Chartered Institute of Bankers in Scotland

“Law and profit are not the only arbiters”

Extracts from the letter from 17 finance industry leaders, in the Financial Times, 28 September:

In the run-up to the recent crisis, it must have seemed to the public at large that, for many financial institutions, the only arbiters of economic action were law and profit...

At its most extreme, this philosophy undermines any concern for the best interests of the customer, and subordinates these entirely to the pure self-interest of the seller in maximising profit as an end in itself. It legitimates exploitation and, in the end, subverts the very basis of trust in the market on which all profitable activity depends...

Such a philosophy is and always has been at odds with best practice in banks and other financial institutions...

Law and regulation are there to protect people. But, of themselves, they cannot create or sustain the imperatives that motivate financial institutions and those who work in them. That can only come from the culture of organizations...

In all this, it is essential to restate and affirm the social purpose of financial institutions as well as affirming the personal vocation of those who work in the industry…….

...The recovery of a stronger sense of service through reinforcement of a culture of professionalism will both benefit the financial services industry and those who work in it as well as furthering the common good.

Ultimately, it is the responsibility of the leaders of financial institutions – not their regulators, shareholders or other stakeholders – to create, oversee and imbue their organisations with an enlightened culture based on professionalism and integrity.

As leaders of financial institutions we recognise and accept this personal responsibility… We therefore commit ourselves to do all we can to foster and encourage this culture both within our own institutions and more widely within the financial sector in the UK and elsewhere.

Signed by:
Marcus Agius (Chairman, Barclays); SirWinfried Bischoff (Chairman, Lloyds Banking Group); Mark Garvin (Chairman, JP Morgan UK); Chris Gibson-Smith (Chairman, London Stock Exchange); Richard Gnodde (Co-Chief Executive Officer, Goldman Sachs); Colin Grassie (Chief Executive Officer UK, Deutsche Bank); Stephen Green (Group Chairman, HSBC); John Griffith-Jones (Managing Partner, KPMG); Sir Philip Hampton (Chairman, Royal Bank of Scotland Group); Lord Levene of Portsoken (Chairman, Lloyd’s of London); Harvey McGrath (Chairman, Prudential); Mark Otty (Managing Partner, Ernst & Young); Stuart Popham (Senior Partner, Clifford Chance); Ian Powell (Managing Partner, PricewaterhouseCoopers); Lord Sharman of Redlynch, (Chairman, Aviva); John Stewart (Chairman, Legal and General); Sir David Walker (Senior Advisor, Morgan Stanley).

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