We live in a global economy where businesses, especially in financial services, often have operations throughout the world.

Therefore, to get an insight into how ethical developments and concerns vary globally, country heads of the CISI, in the final part of our series on business ethics, have given their thoughts on ethics and integrity in the regions in which they work.

Building trust in Singapore

Stable trust levels mean businesses can focus on ethics training for individuals.

Tavia Chua, CISI country head, Singapore, says there has been a much greater focus on integrity and ethics in Singapore during recent years, with a growing number of workshops being made available to individuals working within financial services.

In addition, in January 2016, the Institute of Banking and Finance in Singapore introduced an annual requirement of four ethics-related continuing professional development hours for financial advisers.

Tavia says ethics are an important part of doing business and that a company’s reputation is key for continuing success, as reputation “is very difficult to rebuild if lost”. 

It is therefore encouraging that in this year’s Edelman Trust Barometer survey, Singapore is the fifth most-trusted nation for the second year running, and while in other countries trust in business was seen to fall dramatically, in Singapore it only suffered a two-point decline.

The key to maintaining trust in organisations in Singapore lies with individual employees rather than senior managers. The 2017 Edelman Trust Barometer notes: “CEO credibility fell double digits (14 points) to 36%. Board of directors followed closely with a 10-point drop.”

The survey says: “Compared with a company’s CEO or senior executives, its employees are now more trusted in Singapore to communicate about a company’s financial earnings and operational performance, treatment of employees and customers, and even business practices and crisis.”

Philippines goes back to school 

Businesses realise the importance of doing things ethically but there is still work to be done, starting with improving people’s financial literacy.

Ethics is an important part of doing business in the Philippines, according to Anton Mauricio, CISI country head, Philippines. However, he says: “It is still a long road before anyone can claim the country is a bastion of integrity in the finance sector.

“While there exists many systemic and regulatory safeguards to protect the financial community and the investing public, the execution, implementation and observance of these systems are far from ideal.”

Corruption is a serious problem in the Philippines. The country is ranked 101 out of 176 in Transparency International’s Corruption Perceptions Index 2016, and has an overall score of 35 out of 100 (where 0 is ‘highly corrupt’ and 100 ‘very clean’).

According to Mauricio, the top five ethical concerns among firms in the Philippines are:

• casual employment, where contractual hires are prevented from becoming ‘regularised’ employees and gaining access to costly employee benefits
• avoidance of minimum wage compliance
• tax evasion and tax avoidance
• choosing preferential suppliers, either because of bribery or vested interests
• appointment of relatives and friends within firms despite lack of qualifications.

Mauricio says: “While the regulators are moving surely but slowly in trying to make the systems more responsive to ethical abuses, the issues still continue. Financial scams are a function of the lack of market education, financial literacy awareness and investment education in particular.”

As a result, there is a serious need for greater financial education in the Philippines. A large percentage of Philippines households not only remain unbanked (69% in 2015, down from 79% in 2012, according to the World Bank) but are also uninsured (1% insurance to GDP ratio, compared with 4.8% in Malaysia and 6.1% in Singapore). 

In January 2016, the CISI began its Financial Integrity Initiative in the Philippines. As part of the scheme, it has delivered several workshops and has contributed to the improvement of financial literacy in partnership with the Chamber of Finance Associations & Professionals, the Finance Educators Association and the Junior Confederation of Finance Associations – Philippines. 

India sets the standard

India is the country that bucks the trend. Trust is increasing, while at the same time businesses grapple with corruption.

Ganesh Iyer, CISI’s country head, India says: “Ethics is the most important topic in India for almost every industry, but particularly for financial services, which connects all the people and businesses in an economy.”

This is especially important for India because the combination of having “a developing economy and the largest democracy in the world means ethics plays a pivotal role in building India’s global image against the backdrop of a lot of foreign firms establishing their shop here”, according to Ganesh.

Banks in India have been tightly regulated, which was a saving grace for investors during the 2008 financial crisis, which otherwise might have had more of an impact in the country.

Ganesh says: “To a large extent, banks and bankers have been trusted by their customers in India.”

This is backed up by the 2017 Edelman Trust Barometer survey, which notes that despite the veritable crisis in trust the world over, “India is among the countries where trust is still riding high”. In fact, the survey goes on to say: “Bucking every trend, India has seen a seven-point rise in the trust index in the year 2017.”

Nevertheless, Ganesh believes that in India, businesses still grapple with instances of corruption (India is ranked 79 out of 176 in the Transparency International Corruption Perceptions Index, with a score of 40 out of 100). There is a fear of whistleblowing and misselling, where the actions of the few spoil the reputation of the entire industry.

Yet there have been some developments, including the government working jointly with regulators on new legislation and self-regulatory initiatives by industries themselves to bring in best behaviour.

Furthermore, Ganesh says: “The CISI in India is able to deliver integrity workshops that reinforce our commitment to propagate global best practices to professionals and, most importantly, to would-be practitioners (students) to ensure they are able to behave ethically when they encounter tricky dilemmas in the workplace.” 

The original version of this article was first published in International Adviser. Published here with permission.