“My word is my bond” – why ethics matter in Financial Services
Introduction
“My word is my bond" is the Latin motto, Dictum Meum Pactum, of the London Stock Exchange.
The motto signifies a commitment to integrity and trust in financial markets. This centuries-old principle encourages members of the exchange to uphold their promises and maintain high standards of honour in business dealings, reflecting the traditional values of the City of London. The City of London, also known as the Square Mile, is the financial district of London. It is the ancient core of the city from which the rest of London developed.
The motto reflects a time, particularly in the early 19th century, when stock exchange members would make and seal deals with a handshake and a promise, rather than lengthy written agreements. The motto, along with the exchange’s coat of arms, was formally adopted in 1923, further embedding it as a core value of the institution.
The Chartered Institute of Securities and Investments (‘CISI’), formed out of the London Stock Exchange by exchange practitioners in 1992, has also adopted the motto under its Royal Charter honouring the shared history of the London Stock Exchange and the common values of CISI.
Australian guidance on Ethics
In Australia, financial services professionals can seek guidance regarding ethics from The Ethics Centre. The Banking and Financial Services Oath (‘BFSO’) was founded in 2013 by The Ethics Centre and is a unique industry-led initiative that provides those working in financial services with a mechanism to reflect on what it means to behave ethically, and with integrity. With an aim of building trust and encouraging ethical behaviour, the Oath contains a set of commitments that individuals adopt and apply as personal principles in their work.
Simon Longstaff, Executive Director of The Ethics Centre, states “The BFSO was born out of the dark days of the Global Financial Crisis and the need to affirm the ethical foundations on which people working in banking and finance ultimately stand. It reminds us that, at its best, banking and finance can be a noble calling”. The Oath also reflects the history of the London Stock Exchange’s focus on ethics as the last part of The Oath is, “my word is my bond", Dictum Meum Pactum.
The Oath
Trust is the foundation of my profession.
I will serve all interests in good faith.
I will compete with honour.
I will pursue my ends with ethical restraint.
I will help create a sustainable future.
I will help create a more just society.
I will speak out against wrongdoing and support others who do the same.
I will accept responsibility for my actions.
In these and all other matters;
My word is my bond.
Why ethics matter
In the investment management sector of financial services where I provide governance services, investors rely on financial experts to generate returns on their investments and to have these investments managed diligently by the investment manager. Simple guidelines under the Corporations Act include for example, that the investment manager must:
act honestly;
exercise care and diligence;
act in the best interests of the members; and
avoid conflicts of interest.
These ethical standards are the bedrock of the investment and management sector and the financial services industry more broadly.
Banking and Financial Services Oath signatory
As BSFO signatory number 4582, I am committed to always executing my duties in the financial services industry ethically and in line with The Oath.
The Oath contains the set of commitments that I adopt and apply as the personal principles of my corporate advisory work at Yarmouth Group and governance work at AndrewSMcNeil.com.
Conclusion
Ethics are the foundation of a properly functioning and trustworthy financial services industry.
If you would like to discuss how I can assist your company with ethically enhancing your governance frameworks so that you can better protect your company, customers or investors, please contact me for an obligation free discussion. I can assist your company with:
Advisory board services;
Responsible manager positions;
Compliance committee;
Company director;
Compliance review; and
Governance committee services.
I look forward to the opportunity of working with you.
https://www.andrewsmcneil.com/
https://www.yarmouthgroup.com/
https://www.cisi.org/cisiweb2/
https://ethics.org.au/banking-financial-services-oath/