Banking on ethics

It is now a mandatory requirement for 90,000 bankers in the Netherlands to swear on an ethical oath. In many countries, high profile media exposure of ethical scandals in the finance industry has undoubtedly undermined client confidence. Banks play a crucial role in our lives and Dutch banks are clearly demonstrating the importance of promoting high ethics standards as a way to underpin trust in services they offer.

The media made several positive mentions about the Dutch bankers’ oath:

  • “It’s certainly a move forward from an ethical standpoint” – Forbes
  • “…if (business) is only about making money — devoid of purpose or rules or ethical standards — then it doesn’t work nearly as well.” – Bloomberg
  • ‘…ethics must come from within…’ – Chris Buijink, chairman of the Dutch Banking Association, Quoted in New York Times

We ask Chris Buijink, Chairman of the Dutch Banking Association (NVB), a few questions about how the oath came about:

Why did the NVB start this project?

The banker’s oath can be seen as an evolution of the moral-ethical statement laid down by the NVB in 2009 in the Banking Code. The statement – a comparable text – was signed by board members and non-executive members in 2010. The oath is part of a wider initiative of all Dutch banks called ‘Future-oriented banking’. The initiative includes the Social Charter, the revised Banking Code and the oath related Code of Conduct. From 2008 onward, the Dutch banks were engaged in a process of change aimed at a more stable and less risky financial system.

The banker’s oath applies to employees of banks, committing themselves as individual professionals to the desired culture of service-oriented, sustainable and integrity-based banking practices.
The oath is taken during a meaningful meeting at the bank, for example in combination with a mutual discussion on possible dilemmas that bank employees in their daily work may encounter.

How have you implemented the oath?

The board of the NVB expressly opted for the widespread adoption of a banker’s oath.
The oath grew from a very transparent process, with each citizen and institution having the opportunity to provide input through a consultation. A separate working group from the Dutch Banking Association was formed where a representative number of banks worked jointly on the implementation.

Ultimately, a proposal for the implementation was submitted to and endorsed by all banks in the Netherlands. In addition and upon request of the banks, the Ministry of Finance prepared a legal framework.

What are the benefits to society?

There are clear benefits to society when every bank employee makes a commitment to integrity, customer-focus and a sustainable sector. Through the banker’s oath and the linked disciplinary measures, the bank employees can be held accountable. The results include greater stability, less risk and putting the customer at the heart of the banking business. Both individual banks and their employees can be held accountable.

We are aware that trust in the sector will return as customers and society use banks that meet their needs and serves their interests. In that sense, the oath is a tool.

Property investors commented:

President of Brazil’s Ingai Incorporadora, Claudio Bernardes:

“The ethical behavior, besides being one of the pillars for any developed society, is the key success factor for any entrepreneurial organization. The image of an ethical company is associated with successful and socially responsible organizations.
The initiative to create an international coalition to establish ethical standards at a global level was extremely timely, and no doubt it will produce an extraordinary improvement in the business environment, at a time when the operations become global. The presence of clear and consistent ethical standards in the organizational culture of companies will also greatly enhance the safety of business operations.”

Netherlands-based institutional property investor , Rene Hogenboom, CEO of Altera:

“Ethics are very much determined by matters of history, moment in time, cultural background, legal systems, religious backgrounds, democratic systems and the degree of prosperity.
Apart from differences between continents, countries and markets of the world are evolving into global markets. The real estate market is one of them. That requires not only global professional standards, but also equivalent and reliable professional business behavior. We cannot rely on different ethical qualities anymore. It is essential that global organizations of real estate professionals also strive for an applicable set of ethical principles. Actors in the global real estate field should be able to depend on mutual ethical qualities – anyhow, anywhere, any time – and to be accountable for deviant behavior.”