Accounting professionals aim to rebuild trust
The reasons are obvious, says Chris Joy, executive director of the Hong Kong Institute of Certified Public Accountants (HKICPA), the statutory licensing body that is also responsible for professional training, development and regulation. The institute has about 28,000 members.
"Ethics is absolutely central to the accountancy profession and to all of our members, and it certainly features very strongly in our support and training programmes," he says.
"Ethics [and compliance] are important in all business industries and activities, but especially so in banking because you've got an industry that deals with money, assets and the public, and trust in that system is therefore very important."
Ethics is not an easy subject to teach in a classroom environment. Within the HKICPA, an adherence to ethics is built into the institute's culture, Joy explains, and forms an integral part of the institute's training programmes and standards. "We issue professional standards across accounting and auditing, but we also have our code of ethics," he adds.
"Ethics is a difficult area to regulate in the sense that most people think about regulations, but we do look at what our members do, we do follow up on complaints, we do take disciplinary action."
The institute's latest method to help make ethics an integral part of members' professional lives is by setting up mock real-life situations and giving suggestions about how to react to ethically difficult situations.
"That I think is very helpful, particularly for members who work in business who may come across certain ethical dilemmas in the course of their work," Joy says.
One positive result of the recession and the global crisis of faith in the banking and financial sectors has been the emphasis they brought to the importance of ethics and compliance.
"The main current issue in the banking and finance industries on a pretty macro level is recovering the trust that was lost after 2007-08," Joy says. "I think everyone would agree and has faced up to the fact that risk management, systems control and compliance with procedures are actually very important."
The recession and its aftermath have also done a service to accountants by highlighting their high level of commitment to ethics and compliance, he says.
"Some of the issues that were brought to the fore at the time of the crisis have reinforced with employers the value of employing qualified professionals in these key areas so that corporate governance gets the emphasis that it's really due," Joy says.
Companies seeking ethics and compliance professionals can find good candidates among CPA members, he adds. "The professional strengths and attributes of a CPA would make them particularly suitable to work in this area."
Leaders must set the right example
Companies that want to demonstrate their dedication to fostering ethical behaviour sometimes point to the size of their headcounts in compliance and risk management positions. But that’s not enough, says Stephen Shih, head of MBA career
services and corporate management at the School of Business Management at Hong Kong University of Science and Technology (HKUST). To be effective, he adds, a real commitment to ethics must come from the top.
“When it comes to ethics and compliance, the primary issue is always about leadership,” Shih says. “The key job of a leader is to define values and align a company’s culture to support ethical behaviour. Risk management and compliance functions are critical, but they require the support of top leadership to be truly effective.”
Shih’s role as head of HKUST’s MBA career services gives him an overview of the mindset of future leaders on the topic of ethics and compliance. He says the feedback he has received shows that students are staunchly behind these issues.
“Our MBA students are very interested in corporate social responsibility, not just in banking but in other industries as well,” he says. “For example, we have an active ‘Net Impact’ student-led club that explores ways for business to have a sustainable impact on society and the environment, not just profits.”
Students are not only learning about corporate social responsibility, they are also taking their ideas off-campus to try them
out in the real world. “Some of them are consulting to innovative organisations in this area,” Shih adds. “For finance professionals seeking to make a positive impact on ethics and compliance, I’d encourage them to remember that they have the opportunity – and obligation – to do this in any job, and that they don’t necessarily need to join a compliance team to make an impact.”