The Centre for the Study of Financial Innovation held a round table yesterday to debate this question: “are consumers getting a fair deal in the insurance market?” The overall conclusion were mixed – ‘good effort in places, but needs to do more’. Two problems holding back the insurance market were the presence of both “good insurers and bad insurers”, and the difficulty CEOs often have turning their own personal commitment to ‘doing the right thing’ into something that pervades their whole organisation.
A lot of attention is certainly given to that ‘tone from the top’. I mentioned in an earlier post that an important feature of ethical leadership to set an example and be seen to follow through on it. Let’s quickly breakdown tone from the top into its two ingredients.
The ‘tone’ is the signal sent out about the types of behaviour that a firms wants to see emulated, and about the types of behaviour that will not be tolerated. And ‘the top’ is often thought of as the chief executive or perhaps the executive team as well.
Yet while we should expect the executive team to set the right ethical tone, we shouldn’t expect that example to be set only by them. In reality, the reference to ‘top’ in tone from the top includes anyone who has responsibility for others. So we need to think not just about the tone from the top, but about the tone from the middle as well.
So that means all of us with some form of responsibility within a firm. In accepting those responsibilities, so we accept the need to set the right example in the behaviours we admire and the behaviours we won’t tolerate. So how can each of us organise a personal commitment to show ethical leadership? Here are four steps that we can all take:
- build a baseline understanding of ethics – both the CII and PFS have their on-line own ethics courses, available for free to all of their members. They’re both tailored to the insurance market, so what you’ll learn will fit your work context.
- find out what types of ethical risks you’re likely to come across in your particular line of work. You can then focus on that particular bit of ethics that influences your work the most.
- become familiar with the obstacles you might sometimes face when trying to include ethics in your decision making. Remember that most corporate misconduct is not done by bad people – it is done by good people who make bad choices. So if you’re able to recognise the thinking that leads to those bad choices, you’re in a much better position to be able to stop and reflect on where greater care needs to be taken.
- learn how to avoid making that bad choice next time round. The best way to do this is to prepare some tactics in advance for counteracting those danger areas.
I’ll look in more detail at the thinking that can lead to bad choices in a later post. In the meantime, roll up your sleeves as an ethical leader and think of one situation coming up next week in which setting the right tone could make some difference, however large or small.