Ethics in Finance
19.01.2010

Why is it important to worry about ethics in finance? When you think about it, you realize that you put your hard-earned savings in the care of financial firms – asset managers, banks, insurance, and all kinds of funds – and you trust them to look after the money. Yes, you want the best return, but there is a balance between risk and reward. You need to feel confident that you can trust the finance professionals to act with integrity, in your interests.

The current financial crisis was largely triggered when trust in financial markets was destroyed by lack of transparency and evidence of the absence of ethical behaviour by many in the banking and financial business. The crisis has proved the relevance of the Prize for Ethics in Finance and Robin Cosgrove’s vision of the threat posed by lack of integrity, trust and ethical practice in banking and finance.

The winners of the 2009 global Robin Cosgrove Prize were a remarkable group of young finance professionals from all over the world, who submitted their thoughts on Innovative Ideas for Ethics in Finance. The first prize went jointly to Elise Pellerin and Marie Casimiro, both French, for their paper on “The need for order in the disorder of finance” and to Geoffrey See of  Singapore, who wrote on “Internationalism, Institutions & Individuals: Systemic Changes for a Systemic Ethical Crisis” . Meredith Benton, of USA, won the second prize with her paper on “Emotions, Personal Ethics and Professional Life – the lost link” .In addition, the International Jury of the Prize awarded a “Special Commendation” to David Sifah of Ghana for his excellent paper on “Financial Ethics”.

The new Ibero-American Prize, sponsored by MAPFRE of Madrid was won by

Leire San-José from Spain, who wrote on “Ethical Cash Management? A Possible Solution”, and the second Prize went to Felippe Araujo (a Brazilian working in Japan) who wrote on

“Ethics: the key to Credibility”.

All these brilliant young finance personnel recognised that most financial transactions have ethical dimensions. Whether it is a question of trust, methods of remuneration, conflicts of interest, or default on debt, ultimately you as clients need to feel that the professionals who look after your assets believe in ethical behaviour. It is not just a question of compliance, ticking the box to fulfil regulations. Good practice in the world of finance, as in most other aspects of human life, depends on people doing the right thing because it is the right thing to do.

The third edition of the Prize for Ethics in Finance – the Robin Cosgrove Prizes – will be launched in London in April 2010. Hopefully many younger clients and maybe staff of Guardian themselves will consider writing about their commitment to ethics in their financial lives. Yes, ethics matters. All around us we see the disastrous impact of the collapse of some of the biggest finance-related enterprises in the world and the knock-on implications in terms of loss of homes and jobs. Let us hope that the global economy will significantly improve in 2010 – and that everyone in the finance sector will remember the lessons that trust and integrity are fundamental for a sustainable recovery.

Dr Carol Cosgrove-Sacks

Director, Robin Cosgrove Prize

www.robincosgroveprize.org

Guardian Wealth Management is a partner of the Robin Cosgrove Prize for Ethics in Finance