Experts in the banking sector have called on financial institutions to observe ethical codes of conduct for thriving businesses. The clarion call was made by Dr. Tumubweinee Twinemanzi, Executive Director of Supervision at the Bank of Uganda.
Speaking during the dialogue on Conduct and Ethics in the Financial Services Industry at Protea Hotel, Tumubweinee said ethics is central to how banks but build trust. “If you don’t have ethics, you can’t build trust. The banking sector doesn’t sell loans but trust, If you don’t have ethics in how you handle customers and how you use their money, you lose trust.”
“Ethics is so important because it sets the tone for the governance culture in a financial institution. Imagine a situation where you don’t have ethics, you are going to fail on two fronts of governance component and trust,” he said.
He said if you look at the economic circumstances where economic recovery is slow, we have all these factors buffeting the economy, inflation, geopolitical tensions, Russia, Ukraine, and M23 in Congo. Amongst all these problems, the shareholders of these institutions are putting pressure on institutions to generate revenue and in that the employees may violate working ethics.
“We work closely with employee relations where we take employee relations with us in some positions, and we transparently share the investigations and the themes and what has happened to some of the employees. The only way to build trust is you need to be transparent in our behaviors.”
Mumba Kalifungwa, Managing Director, Absa Bank Uganda said banking is a relationship of trust; “the need to show our customers that their deposits are safe and we stand for high ethical standards. We aim to create awareness about the importance of ethics in our institutions as bankers as well as in the financial services industry.”
He said there will always be pressures where people are put in a position of compromise. But the importance of having ethical guidelines and speaking to the topic of ethics is to bring awareness to say that when there is no adherence to ethical guidelines where you choose to compromise, there will be consequences which may result in imprisonment, people losing their source of livelihood, and all sorts of negative connotation.
“The financial services industry is built on the trust of stakeholders. When Senior Management and Board set the right tone, it builds trust and value with customers, employees and other stakeholders which in turn leads to a thriving business. As they say, forewarned is forearmed. And that is the whole essence of why we are taking the lead to support the dissemination of the importance of ethics in creating a sustainable business,” he said.
He said organizational justice is tracked within the organization because it improves the speed of culture and it reduces retaliation.
He urged banks to have communication mechanisms such as Whatsapp to stimulate speaking up, and whistle-blowing and make sure that there are interventions or treatment plans to deal with the type of pleasure that is feeling in the sector that they are in and integrated ethical decision-making into hiring processes.
