Assessing an Employee on Ethics

Firms are now expected to be able to demonstrate, both to their boards and to regulators, that they have a system in place for assessing the integrity of individuals. So how might this be done? What topics need to be covered and what questions needed to be asked? And perhaps most importantly, what sort of answers should you expect to hear?

This toolkit looks at six topics that will help firms ask good questions and weigh up the strength of the response. It is written around the assessment of a new recruit to your firm, but can easily be converted into an assessment of existing employees.

Users of  this toolkit could include line managers for appraisals, HR people for recruiting and compliance people for regulator purposes. Equally, you could always use it on yourself, to explore your capabilities around ethics.

The toolkit is broken down into six sections, evenly split between the personal dimension and the corporate dimension:

• the person
• their professionalism
• their knowledge of ethics
• the ethical challenges in their role
• the ethical culture in a firm
• the ethical challenges that lie ahead.

If there is one skill that it looks for in a candidate more than any other, it is their ability to communicate knowledge and commitment in relation to ethics and values in insurance. Being able to ‘give voice to values’ is a key skill that anyone with responsibility for people in insurance needs to have. Ethical challenges, both present and future, can only be properly addressed by bringing them out into the open and demonstrating leadership in their resolution. If someone is unable to talk about ethics, then their ability to manage the ethical risks associated with their role is in doubt.

About the person

Ask about whether they’re a person for whom ethics is important:

• what you’re looking for is less whether they say yes or no (although if they said no, that would be informative!) and more about their ability to put that importance into words. Being able to communicate the importance of ethics is important for anyone who has responsibility for others.
• their answer will probably focus on personal reasons, but it is also important that they make the connection over to their work, for ethics isn’t something that they should leave at home on work days.

Ask about what influences their views on ethics:

• this could be a person (e.g. “I often think of what X would have done”), an institution (e.g. their professional body) or family or friend.
• what is important is to hear where they get their ethical cues from. Are these clear? Are they consistent with the work this person will be doing for you?
• they are likely to talk in  terms of values, but this is likely to be in terms of personal values. You could ask them about the ethical values of the firm they’re coming to you from – can they recall them?

Ask about how they reflect these ethical influences in the decisions they take:

• they should be able to express how they make that all important step from ‘being ethical’ to ‘acting ethically’, in terms of the decisions they make at work.
• you could expand this question by asking about how they make sure this happens – how do they remind themselves to take account of the ethical dimension of a difficult decision?
• you could turn that question round and ask them about the advice they would give to someone who approached them for help on being more ethical in the decisions being taken.
• you could ask for their views on the main hurdles that people in insurance face when trying to factor ethics into the decisions being taken.

About their professionalism

Ask about the part that professionalism has played in their career development:

• do they mention keywords such as standards, ethics or integrity?
• do they mention any sort of code of ethics?
• what you’re looking for is evidence that they recognise the link between professionalism and ethics.

Ask about the support or resources they’ve used from their professional body on ethics related issues:

• are they able to identify the support that a professional body would normally give on ethics? You’re looking for any mention of training material, guidance papers or journal articles.
• do they mention having used that support?  For what reason? With what outcomes?
• what you’re looking for is evidence that they’ve in some way tapped into some form of external support. The reasons for doing so are less important than the fact they’ve recognised its availability.

About their knowledge of ethics

Ask about any ethical learning they’ve undertaken in the last 24 months:

• what topics did it cover and how did they chose those topics?
• did they find it useful, and what characteristics of the ethics learning made it useful?
• how were they able to use what they learnt in their day-to-day work?
• this is designed to find out what ethical topics interests them, and the connection between ‘learning’ and ‘doing’.

Ask for their opinion on making ethical CPD compulsory for insurance people:

• do they think this is needed in the UK?
• what would be the upsides, and the downsides, of doing so?
• compulsory ethics CPD for insurance people is common in North America and in several European countries.

Ask about whether they’ve had their knowledge of ethics assessed in any way:

• if yes, then how useful did they find this?
• if no, what is their opinion on such assessments?
• not all compulsory ethics CPD is assessed – it can sometimes be monitored simply through attendance.
• ethics assessment is a developing trend in financial services and this question is just as much about how they express their opinion of its usefulness, as about how they got on with it.

About the ethical challenges associated with their role

Ask about the main ethical issues associated with their line of work:

• does their answer show that they recognise that they will face ethical issues in the work they’re going to be doing for you?
• how good are they at expressing the nature of those ethical issues and connecting them with key tasks that the role entails?

Ask about how they keep up-to-date on the ethical issues associated with their line of work:

• does their response show a connection with what was mentioned earlier, on professionalism and on ethical learning?
• does their response show any degree of active enquiry about those ethical issues? This would indicate the level of active engagement with those issues, which in turn points to how they would manage them on a day-to-day basis.

Ask about how they manage those ethical issues as part of their regular responsibilities:

• get them to talk in very practical terms. It’s all well and good ‘knowing’ about them, but ‘doing’ something about them is what really counts.
• does their response point to a personalised response or an organised response? In other words, do they overly rely on their own personal qualities, or do they make use of their skills as a manager?

About the ethical culture of a firm

Ask about what they know about the ethics and values of your firm:

• is the response very generic, or does it point to some specific views on your firm?
• have they thought about how your business goes about its business before applying? This would point to an ‘ethical / values fit’ having some significance for them.

Ask about what they’d be best at in terms of making a contribution to the ethical culture of our firm:

• this is less about what exact contribution they’re thinking of, and more about the extent to which they realise that making a contribution is part of everyone’s role.
• their response would also point to what they think they’re good at in terms of ethics and decision making.

About the ethical challenges that lie ahead

Ask about the main ethical challenges that could face a firm like ours over the next three years:

• this addresses where they think that performance on ethical issues is going to count. Here they should mention at least one of the ethical challenges that would be typical for the role they’re applying for.
• whether they pick the right main issues is perhaps less important than how they talk about challenges and how to address them.

Ask about what they think is driving those ethical challenges:

• recognising where an ethical challenge is coming from, and why, is a key part of understanding how best to respond to it.
• how they respond to this question could point to their views on the merits of those ethical challenges. Do they seem them as an imposed problem, or an opportunity for improved performance?

Ask about the resources they would expect to make use of in managing those challenges:

• this asks them to voice their expectations about the support your firm would be giving them to meet these ethical challenges. You’d expect to hear references to checks and balances, protocols, training and most importantly, leadership support
• perhaps the one resource they need to mention is leadership support. They would want to know that they have clear and visible support from senior executives on tackling those ethical challenges. A gold star would be earned if they then asked you for examples of how such leadership support had been given in the recent past.