Are You An Ethical Banker?

1. The autocrat You are the risk director in a firm of wealth managers, whose chairman has pulled off a coup by poaching a high-profile chief executive from a competitor. The new CEO has made radical changes to the firm's business methods and culture sales have risen strongly, but so have complaints, while the firm's reputation has fallen You report this concern to the risk committee, which is chaired by the CEO, but he makes it clear your comments are unwelcome. Further problems arise involving a third party investment product, which received heavy public criticism for poor performance, resulting in its withdrawal. Your firm has been a major promoter of this product, which has generated significant income for the firm. You report again to the risk committee, where the CEO is, once again, hostile to you and reminds you 'everyone, including you, is on course for significant bonuses on the basis of this year's figures, so don't rock the boat'. The risk committee minutes, which are copied to the board, make no mention of your concerns, and you write a file note about this. You raise the accuracy of the minutes with the CE Owho says he has no intention of bothering the board with scare stories and 'you had your say at the risk committee, where you were in a minority of one'. You are convinced that inaction is storing up serious problems. What should be your next step?

You decide to have one last attempt to see the CEO but his PA says that he is very busy and will not be available for a month

You will discuss your concerns with the senior independent director before the board meeting in two weeks’ time

You resolve to mention this, informally, to your regulatory supervisor at the next scheduled meeting in 10 days’ time

The correct answer suggests that the next step should be to discuss the concerns with the senior independent director before the board meeting in two weeks' time. This is a logical step as the risk director has already tried to raise concerns with the CEO and the risk committee, but they have been dismissed or ignored. By discussing the concerns with the senior independent director, who is not under the CEO's influence, there is a higher chance of the concerns being taken seriously and addressed appropriately.

Explanation

The correct answer suggests that the next step should be to discuss the concerns with the senior independent director before the board meeting in two weeks' time. This is a logical step as the risk director has already tried to raise concerns with the CEO and the risk committee, but they have been dismissed or ignored. By discussing the concerns with the senior independent director, who is not under the CEO's influence, there is a higher chance of the concerns being taken seriously and addressed appropriately.

2. The tender dilemma You are a managing director. Your team has been asked to make a presentation to a client, and while sitting in the waiting area they discover a presentation pack left behind by their key competitor. You find out they have used the information in the pack to write their presentation. You find out what has happened. What do you do?

Congratulate the team for being so observant in this competitive environment

Inform the client you have 'in error' obtained a competitor’s book and revert to the original pitch

Apologise to the client and withdraw from the bid, then take disciplinary action against your team members

It's answer C - the integrity of your firm should always be paramount.

Explanation

It's answer C - the integrity of your firm should always be paramount.

3. The inflated CV You are the Chairman of a firm which employs Brian Poole, one of a number of successful fund managers in your firm who you wish to invite to join the board. His CV says he graduated in 1984 - but he has admitted that he didn't graduate. What do you do?

Minor matter, not material. Continue with launch, remove reference to his degree in advertising. Invite to join Board

Refuse Brian’s request to join the Board and ask him to resign. Amend launch material to remove him.

Sack Brian for being deceitful. Amend launch material to remove him.

It's B: it's important to be fair.

Explanation

It's B: it's important to be fair.

4. Inks You are a relationship manager at Knights, a boutique corporate finance house and are leading a bid for an important mandate from Inks plc., an existing customer, which manufactures printing ink and cartridges Knights has a reputation for high ethical standards and encourages charitable activities by its staff, including using its corporate email 'footer' to support nominated charities. The current charity, which is chosen by a staff committee over 11 months ago, has an environmental focus aimed at combating global warming and its email message includes the words: 'Do not print this email unless absolutely necessary' You receive an irate phone call from the managing director of Inks plc., who has taken offence at the wording on your email footer and threatens that if the wording is not removed by the end of the day, he will ensure Knights does not win the mandate Failure to win the mandate may result in one or two redundancies in your firm

Call a meeting of the staff committee and recommend the footer is removed

Alter the footer as requested so Knights is awarded the mandate

Tell Inks it is an internal matter for Knights and it is quite inappropriate for a client to influence internal company policy

It's A - staff have to be involved as it is their footer – but be realistic

Explanation

It's A - staff have to be involved as it is their footer – but be realistic