Business must be about values

Ultimately, the finance industry is about trust. The regulators and government can bind up the gigantic finance industry with the tiny ropes of many rules, but like Gulliver, the finance industry will find new ways to free itself.  Business in finance must come down to good human decisions made every day. These simply are too many to be restricted and guided by well meaning government and regulators hovering nearby.

I was at a recent finance event held by CIBC for their partners in the lending industry and was struck by how many of these industry leaders lowered their voices and expressed their concern about the values, or lack of, spreading across the banking industry. This decline in values is a contagion that threatens the investment industry and our economic health.
In the Nineties, companies did spend a great deal of time - and money on expert fees - discussing "Values" and building Values statements. The process of having employees ponder what makes the bank successful over the long run is what counts, along with the interest and sincerity of those executives managing the banks. At the same time, top bankers had to understand numbers and financial instruments like swaps, but to climb your way to the top, you also had to have a strong sense of people.
Sadly, Values consultants got a hold of the concept and many turned a valid part of working together into phony processes not run by the leaders and the output were oily values statements - just adding to cynicism.
I have mentioned before that my uncle ran the insurance division of the Royal Bank of Scotland, and was appalled at the upcoming leadership as the men were purely financially driven. Their lips would curl at the suggestion of having a process for employees to talk about what is the best code of conduct for bank traders to hold in their hearts.
Knights of the Round Table stills fascinates a large audience of young people. What is it about this ancient tale of a Kingdom long ago?
Perhaps it is due to the loyalty of all the knights to help each other and that invisible moral code that bound them all but also made them the best in the land.
As we think about our financial leaders, do they have a moral code that guides their employees? How involved are they at demonstrating daily how to behave? How does each bank leader demonstrate how to make profits? What is the message given on treatment of all clients of the bank - including those faceless traders on the other side of the world who were sold those viral derivatives with mold infested mortgages.
Here in Canada, we are fortunate in our bank leaders like Gord Nixon and Ed Clark. They have risen through the bank hierarchy and are what my uncle would call "true bankers", not the fast thinking corporate finance types who financial engineer profits.
Can the banking and investment system lead the way back from the edge of this madness and build back the trust? How will they demonstrate that business - everyone's business - needs to be built on strong values.
The UBS trader is the most recent rogue trader bringing down the value of a bank. His friends say he was a nice fellow so what happened in his mind? What was it? Greed or pride? I would prefer the latter. On his final Facebook page he asked for a miracle. Could he have done with more emphasis on values?