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The language used within the banking and finance sector – whether it be in a company’s annual report or face-to-face during a business transaction – is becoming increasingly technical, abstract, and morally and ethically neutral.
Terms like Collateralized Debt Obligation and Global Financial Crisis are more frequently referred to by their acronyms CDO and GFC, stripping them of their meaning and emotional undertones.
People are referred to as ‘resources’ and the use of terms like ‘cost-benefit-analysis’ and ‘economic drivers’ has made it acceptable to base decisions on financial gain rather than ethics.
Clare Payne of the Banking & Finance Oath points out “The limited vocabulary of economic and financial terms not only actively excludes the language of ethics but also tends to present absolutes, making complex arguments appear simple – overly simple”.
Clare Payne, Director, Banking & Finance Oath; Consulting Fellow, The Ethics Centre
“Compelling graphs and models coupled with ethically neutral language can strip decisions and actions of the human element of business and can expose businesses to unforeseen risks that might otherwise have been blindingly obvious”.
Payne highlights the case of Ford Pinto in the 1970s where a cost-benefit analysis was undertaken, assigning dollar values to a product redesign, potential lawsuit and even lives of potential victims. The analysis concluded that it would be cheaper to compensate claimants than make the necessary repairs to the hazardous product. The company were subsequently charged with negligence and reckless homicide.
Payne argues that this case does not appear to have served as a sufficient red flag to the industry and that finance executives still often exhibit ‘moral muteness’, that is, choosing not to voice or obey their moral sentiments when involved in business decisions.
So how should the industry move forward?
Clare Payne will present a paper at the Banking & Finance Ethics conference next month in Sydney, highlighting how the language of ethics can assist with eliminating moral muteness and restoring ethics and trust within the banking and finance sector. Drawing upon a number of examples she will detail how using words such as ‘right, wrong, respect, care, and community’ and minimising the use of terms such as ‘cost-benefit-analysis, return-on-investment and business case’ can help establish an ethical foundation within the industry.
Learn more and book your place here.
