The bizarre contortions that the Church of England got itself into, over the protesters camping outside St Paul’s Cathedral are nothing compared to the tortured mindsets of many who work in the City of London.
The survey Value and Values: Perceptions of Ethics in the City Today was commissioned by the St Paul's Institute, an organization affiliated to the cathedral and carried out by independent pollsters ComRes based on an online survey of 515 managers in the financial sector between August 30 and September 12, 2011. The report was undertaken to mark the 25th anniversary of Big Bang, when massive deregulation arguably opened a Pandora's Box for financial markets.
Originally scheduled to be released in October, the research was not published until November 7, as a direct result of the church's botched response to the Occupy protests last month. St Paul’s Cathedral initially welcomed the protests on October 17 but then closed doors for a week in an attempt to shame the protesters into moving on. When the move failed the church came over all heavy-handed, threatening legal action alongside the more hawkish Corporation of London. However, the church has since recanted and reverted to its original, more tolerant stance towards the "99%" who are camped on its doorstep.
Opening the box
So what did the research actually find? Well, it revealed that most people in the City of London seem hopelessly confused when it comes to ethics, fairness and social justice -- and are also decidedly ignorant of history. In his commentary on the findings, Right Reverend Dr Peter Selby said the contradictions revealed by the research:
“certainly demonstrate a community profoundly at odds with itself.”
And in his introduction, Giles Fraser, who resigned as Canon Chancellor St Paul's as a result of the church's hostile stance towards the protesters, wrote:
"The fact that trading is now so heavily mediated by technology and less reliant on direct human contact may go some way to explain how a sense of moral obligation has come to feel less compelling."
The majority of practitioners admitted that pay in their sector is too high – saying that bankers, brokers, FTSE 100 chief executives, lawyers and bond traders are all overpaid. And three-quarters of respondents thought the gap between rich and poor was too large in Britain, with 70% thinking that teachers are underpaid. Despite this, 64% of respondents said their own salaries and bonuses are their biggest motivators. ‘Enjoyment of the work’, and ‘the work ethos’ were not primary motivators.In his commentary on the findings churchman Selby said:
“The report shows clearly the contradictions with which [City workers] seem to live ... to judge by the report, many are motivated by the financial rewards that go with their work while believing that those rewards are excessive ... the overlap is striking, and presents an intriguing ‘space’ in which engagement can potentially take place.”
Selby suggested that entrenched, inert and perhaps even unthinking behavior is a big obstacle to proper reform in the City of London:
“A mixture of fear for one’s own future, actual loyalty to colleagues, and the peer pressure that operates in highly demanding work situations represent significant obstacles to engagement that is effective in engendering change, rather than simply a rehearsal of faint-hearted guilt.”
This tallies with what I’ve heard about Royal Bank of Scotland investment bankers (who are said to have made some rather unfortunate derivative-based bets on European sovereign debt). I've been reliably informed that the sole motivation of most of the experienced traders in RBS's global banking and markets unit is to “cling onto their jobs” -- a frame of mind unlikely to encourage them to challenge the culture or question how things are done.
Ignorance is bliss
I was also very surprised at the levels of ignorance of Big Bang: 69% of respondents to the St Paul's Institute survey did not know it took place in 1986, and one in three did not believe it related to deregulation! Selby said he was taken aback that so many respondents believed deregulation is a positive, given that a majority also believed that it had undermined ethical standards in the finance sector. He wrote:
"So here we have it: a community of people as represented by the respondents supports deregulation and believes it contributes to declining ethical standards."
Selby was also surprised that most respondents were firm in their belief that their own firms maintained high ethical standards, even though they acknowledged that high ethical values are inconsistent with maximizing shareholder value.
“Given that the respondents believe that they are overpaid and teachers underpaid, and given their support for the deregulation which has made their affluence possible, we are surely faced here with an ethical incoherence well worth exploring if not exposing.”
This is valuable stuff. It appears that the St Paul's Institute has, perhaps inadvertently, shone a light on the hypocrisy and myopia at the heart of 21st century, laissez-faire capitalism. And yes, Rev Selby, this most definitely is a topic worth exploring further.
Further reading on the ethics of finance:
- It was not lack of regulation, but lack of ethics, that killed The Street by Ian Fraser
- The Credit Crunch Was Like an Atomic Bomb; It Will Profoundly Change How We Think and Behave by William Hopper
- The Investment Banks Are on a “Stairway to Heaven” by Philip Augar
- The Morals of Money—How to Build a Sustainable Economy and Financial Sector by Roger Steare
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