Ethics Training

by BOL Guru Barry Thompson

Internal fraud and embezzlement, from the teller line to the presidential suite, are gaining more attention. The media reminds us every day of the scandals surrounding Worldcom, Enron, Adephia, Global Crossings and, yes, even a name that has worked closely with the financial institution industry: Arthur Andersen. Today, more than ever, financial institutions must be prepared to conduct ethics training.

Many financial institutions have an "Ethics Policy," but very few actually conduct "ethics training." Ethics training means more than just reading the Ethics Policy and signing it at some annual meeting. If your institution is only performing this step, it's losing the chance to prevent problems in their infancy.

By conducting ethics training, we train staff on what steps they should take in situations we can't predict. If you have conducted training properly, your staff will not question when it should report a dangerous situation to management.

For example, say that your financial institution already has a policy in place prohibiting accepting gifts above a certain dollar amount. This is a good start, but you also need to teach your staff what this means in their daily life with case scenarios. Take, for example, the 80-year-old customer who wants to pay a teller $10.00 a week for helping her. We should ask ourselves and staff the following questions:

Does your Ethics Policy permit this, since the amount is below the policy limit?
Does this violate the ethics your institution wants to establish?
Should this be reported to management?

Another example would be a branch manager helping a senior citizen by purchasing his coin collection. At first glance, this may seem to be an acceptable situation. But then what happens two years later when a child of the senior citizen sues the financial institution because its employees took advantage of the "mentally-impaired" parent?

Every financial institution should conduct ethics training of this type. By discussing openly the questions posed above, staff can begin to understand fully what is considered proper conduct. Without working through these hard questions, staff will be reluctant to report wrongdoing, and a situation that could have been resolved quickly may grow into a major scandal.

First published on BankersOnline.com 3/24/03