Around 53 per cent of financial services executives think that career progression in their firms would be difficult without being flexible on ethical standards, according to a recent study.
The study, commissioned by Chartered Financial Analysts (CFA) Institute, found that though the majority of financial executives realised the importance of ethical standards, there is still a significant gap between the belief and industry practices.
Despite the importance placed on creating a strong ethical culture since the financial crisis, only 37 per cent believed that their firm’s financials would improve if the ethical conduct of the employees improved.
The study also looked at the issue of knowledge in the industry. Around 97 per cent of the respondents said that they are well qualified for their own roles but 62 per cent of them said that their colleagues know very little of what goes on beyond their own departments.
However many respondents believed that the lack of knowledge could affect their firms. Around 59 per cent of financial executives agreed that improving knowledge about the industry as a whole would help make their firm more resilient.
“If we are to move the industry forward it is incumbent upon everyone within the industry to align their personal and organisational values with those that serve client, shareholder and societal needs,” said John Rogers, CFA, president and CEO of CFA Institute.
“Aspiring to adopt these values will create more resilient firms and a stronger future for finance.”
Nitin Mehta, CFA, managing director for Europe, Middle East and Africa, at CFA Institute said: “Economic growth rates, competitiveness and employment levels in the Middle East region could all be raised further by higher investment in human capital.
“Local investors and investment professionals understand that a focus on ethical conduct and high quality educational training is required to strengthen the foundations for stronger, sustainable growth.”
Adherence to ethical practices in the financial sector is increasingly becoming a cause for concern following the financial crisis.
A recent London Business School report revealed that chief executive officers with a strong record in corporate social responsibility are more likely to engage in less ethical treatment despite maintaining an appearance of morality.