How Finance Professionals Can Help Rebuild Trust!
How Finance Professionals Can Help Rebuild Trust
Trust is among the most important commodities in the world, and it is in increasingly short supply. The 2020 Edelman Trust Barometer, a yearly survey that takes stock of levels of trust in business, government, media, and nongovernment organizations, unfortunately found that none of these entities command trust from most people. It may be too early to gauge the impact of the ongoing global coronavirus (COVID-19) crisis on trust, but there is skepticism about some of the decisions leaders are making during the pandemic. In this environment, it is helpful to examine how institutions and individuals can help restore trust and, even more specifically, what role finance professionals can play.
Finance professionals are responsible for not only keeping track of an organization’s money; they also must accurately account for it, as well as for future projections of revenues, profits, and losses. Being responsible for finances requires not just technical competence but the highest ethical standards for conduct. Those professionals who work in finance and accounting can and should be leaders in promoting ethical practices within their organizations. In doing so, they can provide a shining example to others that fraud, waste, and illegal conduct will not be tolerated.
The supreme importance of ethical conduct has been a hallmark of the IMA (Institute of Management Accountants), which is why the organization has a statement of ethical professional practice enshrining “Competence, Confidentiality, Integrity, and Credibility” in members’ professional behavior. And while certain behaviors are easy to recognize as ethically compromised, the challenge sometimes comes when finance professionals who consider themselves to be ethical are unsure of when a practice is truly in violation of ethical guidelines. That is why IMA prioritizes ethical education and has made it a core competency of the CMA (Certified Management Accountant) curriculum.
Finance leaders, however, can further take the lead on ensuring ethical behavior in organizations—and in the process, help rebuild trust in institutions—by doing the following:
- Understand which practices are unethical. Some practices, such as fraud or embezzlement, are not only blatantly unethical but illegal. But what about misrepresenting information to influence shareholders or other stakeholders? What about withholding crucial information to prevent a backlash? What about failing to be transparent with all information, financial or otherwise? These actions may sometimes be illegal, and may other times not be illegal, but are still unethical. Knowing the difference between what is simply legal and what is both legal and ethical is key for all finance professionals, and this distinction should be articulated in financial education as well as organizational policy.
- Help build ethical corporate cultures. It is important for leaders in an organization to promote ethics. Leaders need to ensure that codes of conduct filter down through the entire organization. There are instances where someone may not know that their conduct is unethical because they have not received proper training on how to recognize and navigate ethical dilemmas. Serving as role models, finance leaders can put ethics front and center, insisting on full compliance with ethical guidelines throughout the finance function. This is ultimately an investment in the finance department and whole organization, because an ethical corporate culture will be far less hospitable to those who would commit fraud, mislead others, or compromise on transparency.
- Acknowledge and address the consequences of unethical behavior. Sometimes professionals can do something unethical without realizing it. Yet once an act has been deemed unethical, professionals need to be fully transparent about what happened, how it happened, and what they will do to prevent it from happening again. Leaders should take violations of ethical conduct seriously and address the causes and ramifications while working to rectify the situation.
Courtesy : Susan E. Bos, CMA, CPA, CFE, is the deputy treasurer of Washtenaw County, Michigan, and a member of IMA’s Committee on Ethics.
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