Would a 'Banker's Oath' tame some financiers?

By Jena McGregor

A nonpartisan organisation based in London has released a report which offers suggestions for reforming the financial industry including a "Banker's Oath". Photo / Thinkstock
A nonpartisan organisation based in London has released a report which offers suggestions for reforming the financial industry including a "Banker's Oath". Photo / Thinkstock

Could a Hippocratic Oath for bankers make the financial industry's titans behave?

A British-based think tank believes so. ResPublica, a nonpartisan organisation based in London, has released a report titled Virtuous Banking, which offers suggestions for reforming the industry. Among its recommendations is a proposal to have financiers swear by what it calls the "Banker's Oath," akin to doctors' Hippocratic Oath.

"I will confront profligacy and impropriety wherever I encounter it," reads part of the suggested covenant. "If I do not violate this oath, may I benefit from the prosperity that comes from serving customers well," reads another.

The concept - bankers swearing like Boy Scouts to be good - made for an easy target.

The publication Management Today created its own satirical version: "I will not try to manipulate rates, even when others are begging me to; I will leave this operation to be performed by central banks."

The idea may have seemed preposterous, but it's hardly new. In 2010, a Scotland fund manager suggested that financiers take an oath "to treat my clients at all times as I would wish to be treated."

Starting this year, Dutch banking employees will have to honour a pledge and will be subject to fines, blacklists or suspensions if they fail to uphold it: "I swear that I will do my utmost to preserve and enhance confidence in the financial-services industry," the code reads. "So help me God."

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And a Colorado-based writer and poet, Markus Stobbs, bought the Web address Bankers Oath in 2012 and penned his own version.

"I will keep myself from intentional ill-doing mindful of the seduction of wealth to cloud good judgment," his code reads. Stobbs says he passed out hundreds of copies outside office buildings on Wall Street in 2012, with reactions ranging from disinterest to intrigue from one banker who walked back from the subway to talk to Stobbs for more than an hour.

Stobbs's quest hasn't gotten much traction. "I never really saw website traffic," he says. "But I just keep plunking away."

The concept of a professional oath for business managers - if not bankers - has gotten some real attention in America in recent years. In a 2008 Harvard Business Review article, HBS professors Rakesh Khurana and Nitin Nohria (now the school's dean) called for a Hippocratic oath for managers.

Interests of society

In the article, they argued that when business schools were launched a century ago, the purpose was to ensure that corporations "would be run in the interests of society by turning the occupation of management into a bona fide profession, with the educational underpinning, certifications and code of conduct that go along with it."

Since that never really happened, they said, management could benefit by becoming more like a profession such as medicine or law. Nohria and Khurana went on to be founding board members of the Oath Project, an organisation that seeks to professionalise the practice of management. Its "Hippocratic oath for business" has been integrated in some form by at least 78 business schools, and more than 52,000 people have signed it.

Culture change

Yet convincing students of the value of such a code could be a lot different than selling it to bankers with dollar signs in their eyes. "My guess is that if hot-shot-20-something-fresh-faced-banking-recruits were asked to swear an ethics 'oath,' it would be taken about as seriously as the doorman wishing they 'Have a nice day,' " said John Dobson, a professor of finance at California Polytechnic State University.

In other words: An oath will hardly be effective on its own. Regulations have to work. Financial rewards must be overhauled. And in some cases, the culture and leadership of organisations will need to change.

Robert Steven Kaplan, a Harvard Business School professor and former Goldman Sachs executive, warns that an oath won't do much at a firm where people are afraid to raise tough issues or the culture isn't consistent with the content of the pledge. "The oath by itself won't do the job of leadership or change a dysfunctional culture," he said. "Leaders have to do that."

- Washington Post

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