Top Executives of Banks Are More Responsible For Downfall in Ethics

Sting on 3 private banks: Managers fail ethics test if CEOs don’t talk ethics---By Anand Mahadevan---- Economic times

There are some fine CEOs running the very banks whose officials were caught on camera, allegedly agreeing to help a walk-in customer launder money, flout know-your-customer norms and stash black money in oversized lockers. It is unthinkable that any of these CEOs would ever promote such behaviour under any circumstance.

How, then, does one explain the footage from the Cobrapost sting — which if it is indeed authentic — does seem to suggest that branch managers offered "edgy" assistance to help a walk-in customer wanting to convert black money into white?

There can be only one explanation: there is a gaping ethics hole among middle managers in India Inc even in companies where the top managements are spotless.

Many CEOs, especially the CEOs of these banks, without any doubt, live and work by the highest standards of ethics. There has never been even a hint of suspicion of any impropriety on their part. Equally true is the fact that most CEOs, not just these, also drive their employees to deliver the best performance, and then, better it. And they are extremely good at this.

What is often lost in translation is that ethics can never, ever be compromised in order to boost performance. But the Cobrapost sting suggests that all middle managers may not share this conviction that exists at the top.

The footage from the sting has no evidence that any of these managers asked for any personal gratification to help the reporter posing as a customer to launder money. If indeed they violated any laws, the only motive would be more business for the banks they work for and, obviously, better performance against their name.

One is, therefore, tempted to surmise that these branch managers saw their quarterly targets, and they also saw the code of ethics at these banks and the laws of the land, and chose to take some liberty.

This is their failure. But, in some sense, it is also a failure of those above them.

In the brutal reality of doing business in India, such dilemmas between business targets and ethics are played out every single day. Only the very naive will doubt which of the two prevails more often. Just that every time ethics are compromised in order to achieve a business goal, a sting operation is not standing by to capture it on camera.

At the middle manager level, if ethical conduct is to have any chance of withstanding the strong pressures that arise from the unrelenting demand for more growth and better performance, the CEO has to lead the battle.

The CEO is responsible to set and communicate business targets. The CEO is also responsible to promote clean and ethical conduct at all times. Unless the CEO communicates the latter with as much gusto as the former, India Inc and its middle managers will never be able to live up to a higher moral code.

Far too many CEOs do not do this enough. As a result, far too many companies never manage to take the essence of the values dutifully enshrined in their codes of conduct and infuse it into the daily work and business culture of thousands of employees.

http://economictimes.indiatimes.com/opinion/guest-writer/sting-on-3-private-banks-managers-fail-ethics-test-if-ceos-dont-talk-ethics/articleshow/18981558.cms