I was told I have to stand in the dot. When I came in here earlier. They said you have to come down these stairs, then you do your thing and then you should go up those stairs. And I tend as a speaker when I train or when I do public speaking, to walk around a bit and move my hands a lot. As I said, well can I move out of the dot? And they were like no you can't. And then I got a look which was because you're talking about ethics and compliance, so why can't you just comply? Just stand in the dot. So I'm going to stand in the dot.
Thank you very much for inviting me to speak. I know you've had a long day and ethics I think is the last thing perhaps that you want to talk about after a really sort of a lovely day of interesting talks variation of conversation and I'm going to ask you things about. What is your personal ethics? How do you value morality? How do you think about your value system? Would you work for an organisation that’s unethical? Would you work for an organisation that does things in a nefarious way and so it's a bit heavy for a Sunday night, so we're going to try and make it a bit lighter so that you enjoy it a bit. But I am going to ask you some questions and I want you to think about certain things in a certain way.
As I was introduced, I've worked across the world and I've worked in various sectors and industries and I've had a lot of fun doing it and I've been in compliance for a very long time. For those of you who are looking for jobs in a couple of weeks and months, for those of you who are in Business School, I think our friends from judge are here as well and various academics and students and sort of audience members around town. Ethics is something that affects you every day, actually, in your life, in your work, in how you interact with your colleagues, with your friends and as a job. It's a very tough job. I wouldn't say it's easy. I wouldn't say it's something that I would encourage you all to do because it questions you a lot. It sometimes puts you in a corner. No one likes you. In an organisation I've been called a handbrake I've been called a stop sign I wouldn't put that on your CV. I put that one on my CV and they didn't like it very much but I thought that's what I've been called that's my job title it wasn't a pleasant day but that was what he was. So it's a sort of feel that not everybody likes, not everybody thinks about, but it happens all the time in business and so what we're going to do is relate ethics and relate compliance and governance to your lives, into your business lives, and as it happens in next couple of years, and months and however long you have your career. I once went for a job and I thought I'll tell you this as an anecdote. Many, many moons ago, after I worked in Goldman's, I was asked to interview for a job in Geneva and I was flown over there. It was fantastic and it was a really lovely small little Swiss bank. And they said to me, listen, we would love for you to come here and show our clients how to launder money. And I said I think you mean anti money laundering. And he said no. I would love for you to show our clients how to launder money because they have a tonne of it and they don't want to pay tax and no one wants to know about it. And so I'm gonna ask you to help them launder it. And do you know, I'll tell you, I'll tell you very honestly, I was going to be paid a lot of money, a lot of money to do this job and I thought at the time if I did it. If I took it, I would never have to work again after I turned 30. And so it was an incredibly attractive offer. And I never, of course I never took it. But I thought at the time, there's a huge pot of money right here and then there’s jail. And you know, it's a tough gig, but I don't look good in orange. And as I say these days, orange is not the new black. But it was at a time and I thought that it can't be that this is how it's done. It can't be that this is how we think about business and ethics so easily. And so effortlessly as breaching ethics or breaching laws and making people launder money. It can't be this easy, but you know what it is.
And so a handful of the stories I tell you today are things that either happened to me or some of my friends who are in industry similar to mine or in roles or jobs that were similar to mine. But it happens all the time. And so when you go out in the world and you think about your jobs, if you guys start your own companies, if you are working for people, if you’re co-founders, if you're going to employ people, think about that. Think about how does ethics factor into your decision making, into your organisations, into how you build your teams, into how you recruit. When you hear of an incredible start up thinking, well she might not get any money because she's brown, she's Indian, you know, she's a techie, she's a data scientist, and no VC on the planet is going to give you money. If you've got to fill in 140 applications and no one's giving you any money for those things, how does ethics and morality and unconscious bias work in that situation? What happens to you as an individual? You're development, your culture. How do you integrate that into your organisations? And ethics actually is all part of that.
So I will talk a little bit about that. And I thought the first thing we will do is say what is ethics? It's a very simple definition. It's the moral principles that govern a person's behaviour. And it sounds so simple and so when you translate it into your corporations, it’s things like rights and wrongs. Things like values, it things like codes of conduct or standards. It's the thing which I hate calling, which is policies and procedures. Whenever you hear policies and procedures it makes my skin crawl because it's just such a boring name for something that's so valuable to an organisation. But that's what it was. So when your compliance team or when you get, when you start a new job and they say to you, can you please do your compliance training? The amount of groans I hear are unbelievable. I've had some people say to me in an organisation if you do my compliance training for me, I'd really appreciate it. And I said, you know, I wrote it for you to do because you're a new employee and you're someone who has to understand the values of our organisation.
So it is something that happens all the time when you join a new company in any facet, whether you're in pharmaceuticals or technology or finance orany sort of industry, you will be doing this. You will be making sure that you do ethics training, you do compliance training and you have a governance programme and so therefore why does ethics matter? Why is it important?
I have heard in the last couple of weeks and these are things that I pulled up from slides and newspaper articles and I thought I'll show you something like this, The Panama Papers. All of you have heard of The Panama Papers? You know, arguably one could say well they were perfectly legal. They didn’t do anything wrong. Arguably, and other people say, but you evaded tax and you know you had all these shell accounts and all these shell companies and so you didn't pay the bazillion tax amount that you were meant to pay. But it's perfectly legal what they did, they didn't do anything wrong. But more morally, a lot people have so many things to say about it, so many things to argue about it.
You have things like Fox, for those of you who are in media or keeping up with media. Fox News was having heaps of scandals with women being sexually harassed and it was perennial. So every second week there was something coming out and then a handful of the men who unfortunately were harrassing these women were asked to let go. And I read some really bizarre stat the other day which said that about $75 million was paid out to settle all these cases and of the $75million, $20 million was paid to the women and $55 million was paid to the men who harrassed them. That's a bit of a weird stat. I mean, it seems the opposite way around, but that's what happened. That's kind of weird. FIFA for those of you who are football fanatics, FIFA was in number of bribery scandals across the world. Mr Blatter was asked to leave because he was apparently part and parcel of it. But what was most interesting is about earlier this year. FIFA hired an independent ethics counsellor, the hired a chief compliance officer. They had a board, many, many board meetings and internal audit teams looking at bribery and corruption in the organisation. They had a new CEO and a couple of weeks ago, if not months ago, he sacked the entire ethics office. And so an entire office that was designed and hired to clean up an organisation has just been sacked. So one could argue, I mean, are they ever going to clean up their act? Are they ever going to do something that's different?
And then you have people like Wells Fargo. So Wells Fargo is an American bank and it turned out that they have been creating multiple, hundreds and hundreds of thousands of fake accounts so that the sales people could beef up their commissions to get more money to take home. And you know I have friends who bank with Wells Fargo in America and when all this came out, the first thing they did. Was run home to find out if their’s was a fake account, if someone had stolen money from their account and moved it to one of these fake accounts. But that's the other thing to think about. When it affects you, it's very different than if it affects someone out over there because it's your bank account. Is your hard earned cash that someone stealing. It’s your hard earned cash that someone’s actually mirroring into a different account? But that's happened a lot. And here's the other interesting thing. The head of the retail bank who was in charge of this was paid a lot of money as a bonus, and under public pressure she was asked to return it. But she was paid it.
So we look at back to 2008 and 2007 during the financial crisis, where bankers I mean apologies to anybody who's in banking. I can say it I think. They were paid millions and millions of bonus for causing the financial crisis. And I'm being very facetious, but there is a cause and effect here. So that's kind of worrying.
And I look at something like Uber, we use it every day. I love it. I love Uber, I love using the product. But for those of you who are keeping up with what's going on in Silicon Valley and keeping up with technology, Uber has had a horrible year this year. Whether it's, you know, an engineer, say there's been sort of repeated harassments and abuse in the company, or they've had a driver being abused by the CEO and that's been recorded. Or they have all these actually these technology sort of data points within their software to track where you are or they've got another sort of technology, software built in, built into the app that masks where, how to get around all their data points. I mean that's kind of crazy and that's happened repeatedly only this year. It's a $60 billion company and there are quite a few people I know who love to work for them I'm pretty sure in this room. But again, would you work for a company like this? Would you work for a Wells? Would you want to work for FIFA, if this is the type of organisation and leadership they have?
Finally very close to home we've got Tesco. Tesco was fined $29 million for overstating accounts by £326,000,000. And you know you guys when you look at regulation you hear this thing called sarbanes-oxley and you hear of accounting standards and you hear of non conflicts of interest and the independence of an auditor - you haven't overstated by 10 bucks. £326 million. And that's not a decimal just flying around somewhere. That's a lot of money. So again, this is all tone at the top and ethical considerations of an organisation. How do you think about it? What does it mean? How do you integrate ethics and compliance into organisations?
The other thing I learned when I was thinking about this talk is whenever you hear scandal in the headline, that's not a good day, that’s a bad day. When you hear the words cover-up, that’s not a good day. But in my world in compliance, it's my job to kind of help fix these and that's really tough. I've had situations or friends of mine have had situations where they have been told you will need to bury something to bury a problem because we just don’t want to think about it. Why? Because it’s going to hit my bottom line. But this is going to cause problems. It’s going to cause problems maybe for my staff, for my suppliers, for my team. Well you have to bury it because if I don’t hit my numbers this quarter it doesn't matter about this ethics issue. It doesn’t matter at all.
I was studying an executive MBA at side business school, and we’re in the process of finishing actually thank goodness. One of the things we realised on this course, that we've been there, we haven’t had at all a session on ethics. And so you'd hope, you're not taught that, you’re not taught ethics in school. You’re not taught it at business school or universities. you know you look subscript fixes not taught it at about audit of the universities the universities. And so you have to discern what your ethics and your values are from your friends, your families, your parents, your siblings, your culture. And you integrate that into your organisation because for sure an organisation is not going to do it.
And so we had to do an exercise recently where it rated in terms of what's important in an organisation. Where does ethics fall? And you'll see tonnes of surveys actually about this. Compliance, governance, ethics, internal audit, having codes of conduct is almost at the bottom. And and and the first thing that gets culled in an organisation when times are tough is guess what? Me.
So I don’t think that’s bad, but I don’t think that’s great because it says that whoever’s at the top doesn’t care, is really not important. We don't want to change the organisation. We don't want to change our culture. So therefore as an individual how do you reconcile your personal values and your ethics with an organisation that doesn’t want to? That’s a really tough thing to think about. You could be working for Wells Fargo. You could be working for Uber and this is what they’re doing. If they’re systematic harrassment of female engineers, which is not the case but if it was, would you be able to stand by and let that be OK? If you all the team that has to clean it up, how would you clean that up? That's a really tough thing to think about.
So one of the things I wanted to ask you is why does ethics matter? A couple of years ago you might have heard, those of you who work in fashion or textiles, a couple of years ago there was a factory in Bangladesh that collapsed. It was a high rise building was about seven or eight floors and and it was full of women and men and I think to some degree children or well young young people so in clothes and textile manufacturing industry sewing garments for people like Primark and Benetton and all these sort of High Street companies. And obviously you go there, it’s Vietnam and Bangladesh and India and Mexico and all these emerging market economies which are supplying cheap labour. So the building collapsed and about 1100 died and when we look at the investigation of what happened, it turned out that the building was built on a pond. The construction materials that were used were sub-par. The time taken to construction was a lot shorter than it should have been for a building such as that. There were three extra floors to the building that should not have been there. And all the structural engineering and the auditing done to check the safety of the building had been bypassed. So you read between the lines and you can get what I'm saying, which is people were bribed along the way to make this happen faster so that all these people could get into the building to design and sew all these clothes for the High Street.
So when I think about ethics and when I think about cause and effect and response and repercussions. Corruption and bribery and illegal activity and unethical behaviour caused 1100 people to die. It's not just, oh you know, orange is not the new black. It's not just that, it's people can die because of it. And when you’re in an organisation that might have to employ people in Bangladesh to make your clothes and you do an audit of your labour practises and your team says, well, they’re cheap labour. You know India and Bangladesh have 1.2 billion people. China has 2 billion people. So what if 1100 people collapse in a building? And it's your job to clean it up. It's your job to think about, well, how do you reconcile your moral values and your ethical values with a company or an organisation that doesn't? And how do you integrate that into solving the world's problems? How does that have an impact? So ethics matters.
I don't have an answer for you today as to what and how it looks for you, because your ethical spectrum is very different to mine. But when you join an organisation, when you go into the world and whether you start or end or you’re an employee in an organisation, these are things that come up and so you have to by some default, bring your own ethical standards to the organisation that you work for. And you might be surrounded by people who don't think like you and don't have the same moral compass that you have, but you still have to hold your own.
I've had occasions when, you know, the Geneva occasion is such a wonderful one for me because I just thought, oh, I'll never have to work again forever, but it's against every single value I hold as a human being. Everything. And so I didn't want to do it, and there's no way I was going to do it. But those are things that I think about in my job every day. And so, you know, people say oh compliance must be so lonely as a rule or governance must be so lonely. Being the person who says to someone oh you can't do this must be such an awful job. And I think for those of you who actually work in banking, I'm almost certain that you hate your compliance teams because they tell you what you can't do. But it's not in certain industries we tell you what you can't do because that's the law and in some other ones it's something that you have to do.
So I just thought, I'll give you an example and just quickly want you to think about something. You work for an organisation you've been in ethics your whole career, you’re good at it, you love it, you love what you do, you love the teams you work with and you work with people that are great and fine. You're learning a lot, you like the company, you like the mission that it has, you like its values. So far so good. So far everything is going well and you think it’s great. So I'm going to ask you for a show of hands. How many of you would work for this company? Yeah quite a few. Quite a few. That's really great. It's the NHS. Not because you're going to be paid a lot of money, but this is what happened very recently at the NHS. A lot of data. There was a data leak. Those thousands of people have been put at risk. Thousands of people’s data has been put at risk. The person who's responsible disappeared for 28 hours to 48 hours, the minister was nowhere to be seen. And now you have to clean it up. And that's a really tough gig. So think about that. Think about how that works for you.
And then finally, I want you to ponder this. Bribery is a perfectly acceptable business expense. And in some occasions it is. A friend of mine many, many years ago was the crisis manager. He used to be Head of crisis and and global threats for an oil and gas company. And he said to me, we used to train our employees on kidnapping because when they were in nefarious locations, there was a threat of kidnapping. And so once he recorded a border and I’m not going to say which border in which country. But they recorded a border and someone at the border said to them, if you don't pay us $100,000, we're gonna kidnap this executive. Now in that instance, you know what, you're not going to call your compliance officer. Let me just speed dial the compliance lady or the compliance guy who sits in New York or London and see if I'm authorised to make this $100,000 or whatever bribe that I have to pay. You're gonna do it, but it is a bribe. it is an illegal payment you do it and so therefore there is this huge sliding scale of ethics and morality and what's good and what's bad and when is it OK and when is it not OK but it affects you whether you know it or not every day in your life and so my leaving thought for you is when you think about an organisation when you think about your companies, when you start them or you’re part of them, figure out how to integrate it into your company. Bring your own ethics and bring your own morals to the company, because that's vitally important. And most importantly, if you figure out that tone at the top is non-existent, be the change you want to see. Because if you don't, do it, no one's going to do it and that's really really important to think about and you're not going to learn that in business school. So be those people. Thank you.
Why do ethics matter? | Shefali Roy | TEDxOxbridge video
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