Two studies have highlighted the need for firms in the financial services sector to start paying serious attention to ethical objectives. The first study was published in February 2013 by PwC and set out the findings from interviews with 92 chief executives of insurance companies from across 39 countries. It found that 62% of those CEOs were looking at how to strengthen their firm’s culture of ethical behaviours.
“This includes defining the right behaviours, as well as reinforcing mechanisms such as changes in hiring practices, organisational design, development programs, performance management, and rewards. However, many insurers are finding it difficult to translate these objectives into discernible changes in how people think and behave in their everyday activities. Culture will only deliver the organisation’s key strategic goals (e.g. innovation, integrity or sharp customer focus) if it is second nature and firmly part of the habits and routines of staff at all levels”
So the need for change is understood, but not the means by which to achieve it. The second study gives an indication of just how far the insurance sector has to go. Published in October 2012, this survey by CSR Europe and KPMG of five European insurers and five European banks found that 80% had no ethical objectives or targets of any kind, while only another 10% had a qualitative target. Admittedly, it was a small survey, but it clearly showed that ethical objectives and targets remain a challenge for insurers.
With the UK’s financial services regulator showing continuing interest in how firms can nurture and sustain a culture of ethical behaviours, now is the time for the insurance sector to turn that ‘80% without ethical objectives’ into an ‘80% with ethical objectives’. The benefits of so doing are made clear in the PwC report: they help you deliver on innovation, integrity and customer focus.
I’ve created a guide that takes senior and middle managers through the process of setting and implementing ethical objectives and targets within their firm. The steps are straightforward and clearly laid out, with examples to illustrate how things look in practice. The guide is available for subscribers to this blog and you can download the guide and sign up to the blog by clicking on this link.
You might also find this recent post to be of interest: Having a business objective for ethics says a lot about your firm’s ethical culture