When one-quarter of an industry’s leaders admit, in a survey, that lying and cheating is a prerequisite for advancement in that industry, what good things can you possibly say about it? Would you trust it with your life savings? Probably not, but the joke’s on you: you already do!
Labaton Sucharow, a law firm, released a study about corporate integrity on Wall Street and Fleet Street (London’s equivalent), and the results were anything but heartening. The survey, which drew from 500 financial services professionals, found that 26 percent of respondents “had observed or had firsthand knowledge of wrongdoing in the workplace. And 24 percent stated that “financial services professionals may need to engage in unethical or illegal conduct in order to be successful.”
Of course, this sort of cheating would only be considered OK if all the other guys were doing it, too, and to that end, the survey doesn’t disappoint: 39 percent of respondents said that their “competitors are likely to have engaged in illegal or unethical activity in order to be successful.”
This jives well with a recent story by Gretchen Morgenson in The New York Times, in which she spoke with a Barclays executive who drew a laughable distinction between the sort of manipulation his company engaged in — artificially lowering its reported borrowing costs to lower LIBOR — and what others do. “We’re clean but we’re dirty-clean,” he told her, ”rather than clean-clean.” Apparently there’s a difference.
There exists a wide gulf between being totally above-board and being a total dirtbag. This is true in virtually any job, but with the complex products and regulations that come with working in finance, the gap between good behavior and bad can be quite complex. It should come as no surprise that many bankers feel comfortable dipping their toes into that gulf so long as they believe their competitors are just diving right in — especially when you consider how much money is at stake.
And that is part of the problem, without a doubt: a substantial number of bankers feel that there are incentives for cheaters built into the way they get paid. A full 30 percent said that they believe their compensation plan “create[s] pressure to compromise ethical standards or violate the law.”
Violate the law. Think about that. These are the drivers of our economy, the well-respected institutions that we trust with every dime we earn. Understandably, they don’t trust each other, or themselves. Where does that leave us?