Banking StandardsLetter from Colin Tyler, Chief Executive, Association of Corporate Treasurers
We have been prompted to write to you in regard to the idea that bankers (or, at least, bankers in some types of work) should belong to a body with an ethical code and a disciplinary system.
Our members working in banking are concerned that it may be proposed to set up a special body for bankers, to which they are required to subscribe.
For bankers who, for whatever reason, do not already belong to an appropriate body, this may indeed be a suitable requirement However, many bankers already are members of suitable professional bodies—including The Association of Corporate Treasurers.
Like other professional bodies, membership of the ACT is usually by examination. And all members, including students studying for one of the several tiers of examined qualifications, are subject to the ACT’s ethical code and disciplinary process.
While our raison d’être is corporate treasury, many bankers have taken our exams and joined the ACT either because of the overlap of the required content (bankers working in a bank treasury or in advisory roles, perhaps) or because it gives the opportunity to see the world through the eyes of the customer (relationship roles). And, of course, some who work in the treasuries of corporates later work in banks—and vice-versa. For example, at HSBC, the chairman, CFO and Treasurer and 193 others are subject to our ethical code.
There can be a reluctance of employers to pay for more than one professional body membership for employees and, of course, the Inland Revenue normally only allows as tax deductible one professional body membership for those individuals paying for themselves.
We urge that the Commission avoid suggesting that membership of a specific professional body be required for bankers. But recommending that certain bank staff should be required to be members of a suitable body with an ethical code we do think would be a useful step. For bankers who are not prepared to undertake the extensive studies needed to join a UK chartered professional body, perhaps a bankers “club” with membership based on type of employment and interview and some other screening might be necessary to give the completeness of coverage required. Obviously, such a scheme should be included the HMRC list of bodies whose membership is tax-deductible.
However, we do not think that membership of a suitable body is likely to be sufficient of itself.
Governance
The ethos of a professional body, running through the professional formation of its members and their continuing professional development, can be influential. But within any particular organisation it can be difficult for an individual who is one among only a small number of members of suitable professional bodies in a division or department to influence behaviour. Individuals can face great pressure, even on their own behaviour. For individuals to consider their ethical position can be difficult and support can be lacking within the firm. The professional bodies can help: for ACT members, in addition to the support of the ACT itself, ACT members have access to the members’ confidential ethical advisor (Justin Welby, Bishop of Durham).
However, once a critical mass of employees in decision making roles being members (or aspirant members) of suitable professional bodies is achieved in an organisation, an appropriate ethos can more easily be created or sustained.
In terms of bank governance, the Board or its appropriate committee can establish a policy of ensuring an appropriate representation of professionally qualified staff in good standing with their professional body—through recruitment and training/development and support practices—at each level in the firm. The actual professional bodies considered appropriate does not need to be narrowly drawn.
Certainly, a firm should require job applicants and employees and consultants too to notify them if they have been or are expelled for cause by a suitable professional body.
Practice in this regard within a firm would seem to be an appropriate matter for a prudential or conduct regulator to take into account in its dealings with the institution.
7 December 2012