Why did the banks sign up?
Cash for radio comments scandal
by Simon Longstaff
While the issues recently addressed by ABC Television's Media Watchprogram extend far beyond the boundaries of the deal between John Laws and the Australian Bankers Association, I suspect that this will come to be regarded as a celebrated case study in the field of business and professional ethics.
Walk into any organisation where a serious ethical breach has occurred and ask people to explain why things happen the way they do, and you will almost certainly encounter two dominant responses: “Well, everybody does it – don't they!” or, “That's just the way we do things around here!”
Unthinking custom and practice is a recipe for disaster – not least because it means that people tend to operate on 'automatic pilot' – failing to recognise or respond to the changing world around them. The antidote is to create an environment where people reflect on their conduct and act according to a well-informed conscience.
Maybe then the chief protagonists in this affair might have recognised the breach of trust that this style of commercial arrangement constituted.
Of course, it is entirely possible that Laws and his supporters are sincere when they say that they cannot understand what all of the fuss is about. Yet, sincerity is no excuse for unethical behaviour – especially if it could have been avoided by people thinking carefully about the issues at hand.
The trouble is that powerful people and powerful institutions often succumb to the false belief that they are responsible for defining what is ‘right’ or ‘wrong’. Having never met him, I can only speculate about Laws. However, I would not be surprised to learn that he falls into this category. After all, he has spent a lifetime calling other people to account for what he perceives to be their failings. In the course of doing so he has attracted support from ordinary folk in whose name he claims to speak.
Lionised and feted by his audience, Laws may really believe that what he says is right is right! If this is so, then he is not alone. Governments, big business, large non-government organisations, churches and ethics centres all risk falling into the same trap – with the same unhappy results.
Of course, in all of this we must remember that it takes at least two to tango. While most of the attention has focused on Laws (and other broadcasters drawn into the net), it is as well to remember the role played by the banks. The first thing to be said about the bankers is that they have a legitimate right to promote their point of view in the media. This is not where the problem lies.
The real issue is to do with some of the means employed for this purpose. For example, the majority of critical comment has been directed against the decision to manipulate public opinion by disguising commercial arrangements under the cloak of editorial independence. To seek to purchase that which should never have been for sale is ethically problematic – irrespective of who initiated the offer.
It is difficult to know why the banks should have made such a disastrous decision. Were they operating on autopilot, unable to perceive the ethical issues before them? Not if we are to believe reports of a split in their ranks over the deal. It seems that people were made aware of the relevant ethical issues – only to ignore the warnings.
Was it a matter of power? Did the banks think that the assertion of the justice of their case was enough to justify it? Or was it simply a matter of doing whatever was necessary to make the pain go away? Had the period of sustained attack pushed them to a point where the sacrifice of good judgement became a price worth paying for immediate relief?
There may be something in this last suggestion. The banks have been labelled as 'bastards' for more than a decade. In this time they have become the archetypal villain – perceived as rich, powerful, callous, unable to do any good. While the recent conduct of the banks may be less than endearing, we need to ask if whipping them from pillar to post is productive and will in the long term bring about change.
There comes a point where a community inadvertently creates a self-fulfilling prophecy. If we tell people that they are 'bastards' for long enough; if we respond to every new initiative with greater hostility, then there is a chance that those involved will eventually come to believe our rhetoric, stop trying to convince us that we are wrong and become the thing we say they are.
This leads me to suggest that we might usefully learn to condemn certain forms of behaviour without necessarily condemning the people concerned. Should we learn how to do this, then we might find many more people ready to admit that they have done the wrong thing; free from the fear that they will be torn to pieces for doing so.
Indeed, I wonder if this is a lesson that the likes of Laws might like to reflect upon – especially as he has had a chance to walk a mile in the other person's shoes.
At the time of writing, St James Ethics Centre received support from and provides assistance to a range of financial institutions, including some banks and the credit union movement.
discuss this articleDr Simon Longstaff is Executive Director of St James Ethics Centre.
This article was published in The Australian on 27 July 1999.
© St James Ethics Centre