Adhere to high ethical standards
- Governor tells banks, financial institutions
Story: Isaac AIDOO, Accra
GOVERNOR of the Bank of Ghana (BoG), Dr Ernest Addison, has tasked managers of banks and financial institutions in Ghana to “prioritise ethical leadershipat all levels,” as part of lessons learnt from the banking crisis, which reflected poor ethical values based on weak governance structures and internal controls.
The crisis, Dr Addison noted highlighted the need for renewed emphasis on ethics and responsible behaviour in the banking sector.
Adhere to high ethical standards
Addressing bankers at the launch of the 60th anniversary of the Chartered Institute of Bankers (CIB), themed ‘Redefining professionalism in banking through ethics’
in Accra, Dr Addison demanded that all boards, executives, and line managers of banks “set the tone at the top by adhering to high ethical standards and then promoting those same standards throughout the organisation.”
According to Dr Addison, a key lesson drawn from the crisis was that the lack of ethical standards within the banking sector puts all stakeholders at risk, especially shareholders and depositors, and ultimately destabilises the entire financial sector, with spillovers on the economy.
Calling on banks to invest in ethics training and educationfor all employees, Dr Addison stressed that bank staff must understand the importance of ethical behaviour, the consequences of unethical actions, and how to make ethical decisions in complex situations,
Develop codes of conduct
He charged bank managers to develop clear and comprehensive codes of conductthat outline expected behaviours and ethical guidelines for all employees, noting, “these codes should be readily accessible and regularly updated to reflect changing industry standards and regulations.”
The BoG boss called for the establishment of robust whistle-blower protection programmeswhich that are well-publicised within the institution and easy to access, to encourage employees to report unethical behaviour without fear of retaliation,
Dr Addison charged the bankers to promote transparencyin financial transactions and decision-making processes, adding that “individuals must be held accountable for their actions and decisions, and unethical conduct must be promptly addressed and rectified.”
Management of banks must incorporate sustainability and responsible banking principlesinto their operations.
“Considerations of the environmental, social, and governance (ESG) must be factored into investment and lending decisions to promote long-term economic and social stability. Here, I would take this opportunity to encourage banks to ensure compliance with the Ghana Sustainable Banking Principles,” Dr Addison added.
Adhere to regulatory requirements
He advocated strict adherence to regulatory requirementsand collaboration with regulators to maintain a strong and well-regulated financial industry, supported by higher ethical standards,
Dr Addison urged bankers to reward ethical behaviourthrough performance evaluations and incentives. Banks should recognize and promote employees who consistently demonstrate ethical conduct and contribute to the organization’s ethical culture,
It is important to regularly evaluate and update ethical frameworks and practices. Ethical standards should evolve in response to changing societal values, technological advancements, and emerging risks; and, most importantly,
Rally all stakeholders, carry them along
The BoG Governor further charged bankers to consider the interests of all stakeholders, including shareholders, employees, customers, and the broader society, when making business decisions. “Ethical banking recognizes the interconnectedness of these stakeholders’ interests,” he stated.
The theme for the celebration, the Governor described as one that provided a unique opportunity to rethink the core measures that would help build a more sustainable and trustworthy financial industry.
According to the Governor, by redefining professionalism in banking through ethics, financial institutions could regain the trust of customers, investors, and the public. This will not only enhance credibility but also contribute to a more stable and resilient financial system that serves the best interests of society.
While assuring the BoG’s commitment to providing the supportive frameworks to ensure ethical and sustainable banks, the Governor announced it had commenced development of a Business Model and Viability Analysis Framework to enhance its supervisory practices for assessing the sustainability of banks’ business models.
“BMA allows supervisors to identify banks’ vulnerabilities at an early stage and ensure safety and soundness,” Dr Addison added.
