No, this is not a blog about the importance of good underwear (I think we can all agree on that point). But in recent weeks, with first Standard Chartered and now HSBC senior executives finding themselves standing, in the manner of schoolboys before the headmaster’s desk, in front of committees on banking standards and having to admit their shortcomings, there has been a great deal written about the importance of “tone from the top”. In fact, according to HSBC, the US Department of Justice used those very words in its Deferred Prosecution Agreement with them in December 2012: “Management has made significant strides in improving ‘tone from the top’ and ensuring that a culture of compliance permeates the institution.”
But I am not sure that this is the whole story. Leading by example is certainly important – after all, it’s how children learn to speak and walk and behave. But once a child is talking and moving and interacting, the effort starts to shift from getting them to imitate you, to giving them the skills to make their own informed decisions. You teach them right from wrong, kindness from cruelty, value from price – and then stand back to let them apply it all. I don’t want to labour the comparison too much, or suggest that staff are like children, but for a financial institution it is too much to hope that a well-behaved senior management team will lead inevitably to a well-behaved workforce. I think ideally we need a combination: a good example at the top, and employees who do the right thing (whether that is conducting due diligence checks, or reporting suspicious activity, or turning down dodgy business or bribes) because they believe that it is the right thing to do.
Do you remember that primary teacher or Brown Owl or grandma that you did not want to disappoint? We all had one – and for them, we behaved like little angels. And do you know why that was? It was because they believed in you: they thought you were marvellous. And so you didn’t want to let them down. If we let employees know that we think they are doing a terrific job, and that we trust them to do the right thing – and, of course, tell them what that right thing is – they won’t let us down. With a good tone at the top and a firm foundation, we’ll be in better shape than Jess Ennis.