An Holistic Approach to Organisational Culture Trumps “Risk Culture”

My first day of work coincided with the advent of Margaret Thatcher and what I would refer to as an outright experiment with capitalism with a very low safety net to protect those unable to fend for themselves. As I have grown older, I have veered towards a gentler form of capitalism – a market orientated world that recognises that different stakeholders’ views need to be taken into account and respected. A world that tries to protect the environment, the employee, the investor and those that life has treated unfairly.

I have witnessed the GameStop saga in from afar in bemusement. Have we witnessed conscious capitalism at play, misguided investment or outright greed? Whatever happened in this circus it certainly does not correspond with my idea of appropriate behaviour. Let’s list what we saw: –

· Hedge funds trying to push companies fighting for survival down a plug hole in the middle of a pandemic.

· Message board coordinators trying to manipulate the price of stocks in some vain attempt to punish Wall Street.

· Retail investors trashing their savings to get onto the bandwagon and losing everything as the true value of GameStop and other similar stocks succumb to the laws of gravity.

·  Market makers paying for volume to attract a cut of the action.

·  Regulators commencing an investigation but already positioning the result – “its impossible to prove market abuse”.

The unhappy event caused me to reflect on some of the other behaviours I have witnessed in my industry over many years, including: – 

· Turning a blind eye to laundered money – would we have behaved in this manner if we knew the results of this action would directly damage our own children and those who are dear to us?

· Packaging wholesale products in London ready for misselling to retail investors in another jurisdiction with weak investment protection laws

· Not clearly disclosing to clients the way in which an advisor is remunerated in a language the client can understand

· Using credit derivatives to deliberately damage the credit prospects of a company

· Using the fear of job loss to push to ask employees to break ethical boundaries

At the same time, without the financial services industry I doubt that whole new industries would have flourished, trade would not have been facilitated and dreams would not have been fulfilled.

One practical suggestion – all financial services firms should be required to clearly articulate in the business plans who their key stakeholders are, and measures taken to protect these groups.

It’s not too late to move towards a kinder more respectful world.