A code of ethics is a critical concept in the operations of any business. Companies that have established proper codes of conduct perform very well because these codes of conduct give strict rules about the behavior of professionals working in such organizations (Brooks & Dunn, 2015). Therefore, when people apply these codes of conduct, the integrity of the organization is improved and customers can trust the products or services of the organization. The banking industry is the area that requires the utmost customer trust for it to develop because before a person can trust the bank with his money and wealth, its level of integrity must be very high.
Banks that have clear and comprehensive ethics can attract more customers, and with the current competition in the banking industry all over the world, every bank strives to improve its ethical values. The World Bank is an international banking institution that gives a superb example of a company with proper moral values. Through the Office of Ethics and Business Conduct (EBC), the World Bank has been able to implement all the relevant ethical values governing its employees across all its branches (World Bank Group, 2009). The World Bank has ensured that all its employees understand that individuals are responsible for their actions, and they have developed programs that ensure continuous monitoring and evaluation of the employees’ moral conduct. For example, the World Bank holds regular trainings on business conduct and programs that support greater professional transparency. The ethics helpline established by the World Bank helps any person to report any staff misconduct, which has allowed upholding of ethical behavior within the World Bank very successful. On the other hand, Qatar National Bank, being one of the leading banks in the Middle East, has developed some core organizational values such as integrity, excellence in its operations, teamwork, and transparency among others (Qatar National Bank, 2010). However, there is no comprehensive ethics program governing the employees, rather it is a general outline of organizational values. They contribute towards improving the operations of the organization but not as efficiently as a deeper cutting ethics program. Both the World Bank and QNB have focused on the core organizational values, but the World Bank has gone further to develop a more crosscutting ethical values that are deeply embedded in its operations, thereby making it a top class bank. The focus of this paper is to elaborate on the relevance of ethics in an organization and optimally develop an ethical program for QNB.
The Ethics Program for Qatar National Bank
Section 1 – Ethics Committee
The ethics committee will be composed of a team of three or four executive directors from the bank headquarters since most of the operations are conducted here. Therefore, it is important to have a bigger representation. Then, the committee shall comprise of the executive directors from all its branches regardless of the country they are located in. Since each state or region has different cultural values that influence the behavior of their workers, a director of each branch will give the committee an insight on the situation in their region. Additionally, combining the representatives from various areas will allow the committee to come up with uniform ethical policies that can be applied by all bank staff without the feeling of discrimination.
The committee members need to be selected based on the value merit. The independent team shall be set to evaluate the integrity of all the top directors in each branch, and those who have portrayed excellent values in their duties can be nominated by the team (Brooks & Dunn, 2015). Their names can be submitted to the panel of directors at the head office, and the best candidates will be selected. Furthermore, the committee can comprise of the external members who have expertise in the development of ethical policies and who can act as advisors to the team regarding the best policies to establish. After the team has been selected, the committee chairman and secretary of the organization will be elected by the committee members to oversee the committee operations.
The most appropriate term of service for the Committee is two years, and after that, a new selection is made. To ensure that the selected committee members are experienced, they must have worked in a position that required absolute integrity or must have been involved before in formulation of the code of conduct policies. In the banking sector, individual values inside the bank as well as outside the bank matter so much before assigning such an individual control over the client’s money; therefore, individuals selected must show such qualities prior the selection.
Some of the most important roles that will be undertaken by the committee include advising the top bank management on how to implement the policies developed. For example, at the World Bank, the ethics committee advises the bank board of officials as well as the bank governor on issues related to ethics and the conflict of interest by the top directors. It will make sure that all bank employees at all levels of management are aware of the company core values and consequences due if anyone is found to have been involved in any case of misconduct. Additionally, the team observes the ethical behavior of the bank president and top managers. The committee will handle any event of employee misconduct in the course of service delivery, and the board makes the punishment decision.
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Section 2 – Value Statements
Some of the values stated by QNB include:
· Integrity, which ensures that its staff operations are honest in a way that clients can trust the bank with their money.
· Operational excellence is another core value of the bank, whereby the bank aims at improving the experience of their clients ten times every year. QNB is the most trusted bank in the Middle East, and the experience of the clients has highly contributed to these statistics.
· Transparency is emphasized by the bank where all the interactions between the employees regarding the bank services must be done openly. It ensures that with any decision made relating to the money of the clients, the clients must be notified of everything.
· Social responsibility of the bank is well known in the Middle East where it has sponsored most of the community activities. For example, the bank sponsored the conferences on MEED Non-Energy Projects among other community services.
· Teamwork – working together as a team for all the staff at the bank to achieve collective goals is a critical factor in the bank. Individuals must participate in group projects across all departments. It makes sure that there is sharing of information among employees, which contributes to greater innovation in service delivery.
Section 3 – Code of Ethics and Code of Conduct
a. Code of Ethics
|Ethical Issue||Relation of the Issue to the Industry||Why the issue is a priority for the industry/organization|
|1. Bribery||It is a practice in the banking sector where customers offer bribes to the bank staff in exchange for a favor such as being attended to before others or it is a loan they want processed. Clients bribe the bank officials to shorten the processes.||Bribery can cause a collapse of the credibility of the institution. When other clients realize that the speed of service delivery depends on the amount of bribery in the bank, they will lose trust in the bank managing their money.|
|Accounting fraud||Banks earn money from the interest that they charge from money borrowers, and the first accounting fraud is to the customers where they account for a different interest than the one they charged the clients. The bank officials take the difference as a hidden advantage. The next fraud is false reporting the profits that the bank makes at the end of year financial reports. This fraud would be aimed at deceiving the shareholders so that the bank could issue small dividends or avoid paying high taxes to the relevant tax-collecting agency.||When an audit is done and a bank is found to have given false financial reports, this could lead to high penalties by the relevant government according to the appropriate laws. This could damage the image of the institution, which could lead to its closure. There are international laws that govern the accounting practices of all financial institutions and breaking of these laws could lead to the unimaginable consequences.|
|Discrimination||In business, discrimination is observed where staffs are treated differently based on their race, sex, religion, and color among others. Most of the discrimination is done to the junior staff by those who have been in the organization for a long time. Discrimination could be seen in denying employment or in giving certain positions within an organization.||This is a major concern because it is common in the banking institutions, especially in banks like QNB that transacts in different regions; therefore, they tend to hire individuals from that region and not from others. The bank operates both in Africa and Asia, and these two regions have different cultural and religious backgrounds; therefore, the possibility of discrimination based on these two aspects is very high.|
|Misuse of business time and resources||In banking, people tend to use appliances left at their disposal for personal gains. For example, the laptops that officials are given to carry out bank operations can be later used by bank employees for personal purposes. With the emergence of many social media sites, many employees spend time using these social media when they do not perform their direct duties.||It means there is great amount of time is wasted on social media than actually working. Therefore, it is important to make sure that employees understand that they can only do that after they get off from work and not when they work. Furthermore, it should be made clear that bank properties should not be used whatsoever for personal purposes.|
|When a client takes his/her money to a bank, he/she usually looks for the security of their money, expecting the information about their finances to be confidential. However, in some cases, this confidentiality is broken by the bank officials for a variety of reasons.||If privacy is compromised, the clients’ trust to the bank as a credible financial institution is completely lost. Therefore, it is a high priority to address this issue by laying out clear policies that safeguard the privacy of the customer’s information. Since most bank-client relationships are based on trust, when this trust is lost, no transactions can be made in the bank. If such a breach of privacy is of a large scale, this can lead to the closure of a bank after every client withdraws all their money.|
b. Code of Conduct
|Example of Ethical Behavior||Bank employees should not accept bribes to grant favors to the clients who come to the bank and should not favor anyone on any basis.|
|How can the issue be prevented?||Tough punishments can be put in place for those employees caught favoring any customer, and these punishments should be known to the employees from the moment they start working in the bank.|
|Possible Ethical Situation or Crises||Customers could ask for a favor of receiving information about other customers to use it for their gain.|
|Results of Poor Ethical Behavior||This could lead to the conflicts between the bank staff and other clients who do not receive favors.|
|Penalties for Violations by Employees||Such employees should be dismissed from the bank and they should return the money they received as bribery to the client.|
2. Accounting Fraud
|Example of Ethical Behavior||All the accounting should be done in a transparent way, which means that all the information such as actual bank profit is clearly reported.|
|How can the issue be prevented?||The bank should employ internal auditors for the regular and timely audit.|
|Possible Ethical Situation or Crises||The bank could be sued if customers realize that they have been lied to by the bank officials.|
|Results of Poor Ethical Behavior||It could lead to the huge penalties to the bank due to poor accounting, which challenges its growth abilities.|
|Penalties for Violations by Employees||The accountants of the bank could lose their licenses for accounting if found giving false reports.|
|Example of Ethical Behavior||The employees of QNB bank should conduct their operations without discrimination at any level.|
|How can the issue be prevented?||A reporting system should be in place so that any case of discrimination could be reported to the committee for disciplinary actions. Additionally, appointments and promotions should be done by the top officials who have shown profound integrity within the bank.|
|Possible Ethical Situation or Crises||Discrimination could lead to the conflict between the employees that may even amount to physical harm.|
|Results of Poor Ethical Behavior||It could lead to the poor performance when promotion is not done based on merit, and those promoted cannot perform, which might lead to the bank’s overall low performance.|
|Penalties for Violations by Employees||Employees found discriminating others should be relieved of their duties.|
4. Misuse of Business Time and Resources
|Example of Ethical Behavior||The bank staff should be focused and avoid doing other activities not related to their duties at the bank during the working hours. They should also make sure any bank property is not used for any other purpose apart from the one it has been purchased.|
|How can the issue be prevented?||Store managers who keep strict inventory of all bank properties could prevent the issue. In addition, cameras at the offices would make sure no one is idle during working hours.|
|Possible Ethical Situation or Crises||When bank properties are sold by these employees, it amounts to theft.|
|Results of Poor Ethical Behavior||The loss of bank properties as well as poor performance due to wastage of time can result from such poor ethical behavior.|
|Penalties for Violations by Employees||Staff should be relieved of their duties.|
|Example of Ethical Behavior||All client’s information should be confidential and should not be shared with any other person whatsoever.|
|How can the issue be prevented?||The improved security systems are very important to make sure that even the bank officials cannot access the information of the client unless he/she is physically there.|
|Possible Ethical Situation or Crises||There could be theft of the client’s money and other forms of wealth stored at the bank|
|Results of Poor Ethical Behavior||Such ethical behavior could cause the lack of customer trust, which lowers the business operations.|
|Penalties for Violations by Employees||Employees should be relieved of their duties|
Section 4 – Communication of the Ethics Program
After the program is ready for QNB to use, the next important step is to communicate this ethics program to all employees. Since the number of workers in QNB is high, several communication channels can be used in this case. For example, the World Bank has written its code of ethics on the bank website where it is accessible to all employees as well as the public. To begin, staff meetings should be held at every branch and all the staff can be notified of the program and all the details. As QNB operates in several countries and English may not be the primary language in all countries, the program should be translated into the language of each region. It allows all the employees to understand the program properly (Ferrell, Fraedrich, & Ferrell, 2015). For the new staff, these codes of ethics should be shared to them during the orientation period just before they start working so that they could start applying them from the beginning. The senior management should be the one coming up with activities to be undertaken annually to make sure that every employee upholds the ideal ethics of the bank (Spitzeck, Pirson, & Dierksmeier 2012). However, several activities can be conducted to keep employees updated on the organizational values. These activities include annual workshops for employees about the code of ethics, awarding ceremonies for those who have shown absolute ethical behavior, and promotions awarded on the grounds of moral conduct.
Section 5 – Ethics Audit
|Ethical goals of the organization||Activities to achieve the goals||How to measure the progress|
|Attain more transparency and quality services.||These activities can be facilitated by conducting open dealings across the organization, and any transaction regarding the savings of the clients should be verified by several managers.||Auditing is an essential tool of evaluating the progress for quality service delivery across all branches.|
|Equitable and favorable working environment for the staff||To ensure that the bank becomes the dream employer, it must make sure that the working environment is characterized by equality and absence discrimination. Establishing a confidential reporting system about any case of harassment or discrimination would help achieve this goal. The establishment of consumer engagement platforms within the organization will allow the staff to interact freely.||Collaborations with an external firm that examines the corporate social responsibility of organizations to conduct regular employee interviews can help understand the personal experiences of all employees.|
|Gaining competitive advantage through improved customer trust.||The customer trust can be gained through embracing better corporate social responsibilities. It can be achieved through better customer engagement. Training workers on better communication skills is essential in offering the banking services.||The process can be better evaluated by conducting regular customer interviews to understand their experience at the bank. When there are positive responses from the clients, it is obvious that there is some improvement.|
Section 6 – Reporting and Whistleblowers
Employing internal auditors in the bank would make sure that there is a regular monitoring, especially on accounting fraud. The presence of internal auditors at all the branches of the bank motivates the staff to exhibit moral behaviors in conducting bank transactions. Having scheduled employee training and evaluations based on their ethical behaviors can be very effective in showing a continuous state of ethics. All the information received during the audit should be shared with the ethics committee.
The bank should be able to support formal reporting system, whereby if any employee notices any misconduct, he/she can report it. In some cases, when one reports a misconduct and the one conducting the offense knows who has reported him, the offender can threaten such a person or even harm him. Therefore, the best reporting system is one that keeps the confidentiality of the reporter (Johnson, 2003). Such a system can work best if it is under the control of an external monitoring team. Therefore, no one within the organization can compromise the identity of the whistleblower, thus encouraging more reporting.
As for ad hoc reporting strategy, a complete audit can also help the bank to keep track of its progress regarding ethical values. The complete audit is one of the best reporting strategies in ethics because in banking, most of the transactions are kept in records. Therefore, the progress of the bank ethical values can be better understood by looking at the way bank employees prepare these customer’s financial reports (Villa, 2015). During an incident where the moral values of the workers are in doubt, a complete audit helps reveal and report it. A positive impact of the program is seen when cases of unethical behavior reduce or even when there is none.
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Section 7 – Crisis Management
Various crises have been witnessed in the financial industry over the years, and several response strategies have been applied. For example, during the global economic crisis in 2008-2009, the World Bank responded to the situation by massive lending to the most affected countries and supported the fiscal policies of these countries to facilitate quick recovery. Today, some of the most common potential crises in the banking industry include:
· A financial crisis, whereby massive embezzlement of the fund by employees could lead to a collapse of the business (Dzienkowski, 2014). In addition, when a large number of customers issued with loans refuses to pay them and goes into hiding, such a situation may result in a great deal of financial loss for the bank, reducing its profits tremendously. An assessment of the potential risk of the financial crisis can help create preparedness of the organization for such a situation. Maintaining high monitoring systems can prevent such a crisis from happening.
· A criminal accusation of the bank due to the massive accounting fraud by the employees could be another crisis. If clients realize that they have been overcharged for the loans they have taken, there could be demonstrations and lawsuits against the bank, which would lead to its bankruptcy (Bruin, 2015). Consequently, a lawsuit can result in the significant loss and even revocation of operation license to the bank. Moral values of the bank should be trained to the employees from when they start working so that no one would think of taking such an action.
For crisis management, the following steps should be undertaken.
Ensure employee safety. According to the assessment of possible crisis that the bank may face, appropriate arrangements need to make sure that all employees are shielded from the consequences of the crisis. For example, in the case of a financial crisis, the burden is not laid on the employees apart from those found responsible for it.
Forming a crisis communication team. A crisis assessment and communication team is set aside to evaluate the potential crisis and communicate it to other employees (Conrad & Poole, 2015). The team should be comprised of the representatives from all departments to make sure that all areas are assessed for a potential crisis.
Documenting and informing other employees. When the crisis assessment team expects a potential crisis, it analyzes all the possible effects of the crisis and then notifies all the staff so that they could take necessary procedures to prevent its occurrence.
Informing the public. Today, social media is the best tool for making public notifications. Once the public has become aware, they can also be involved in avoiding the crisis.
The concept of the code of ethics is paramount to the success of any organization. Organizations across the globe strive to develop the most comprehensive value base for their operations. All these efforts are made to improve the reputation of an organization both locally and internationally. Once an organization becomes reputable, it gains a more competitive advantage over the competitors; therefore, implementing a proper code of ethics is a strategy for creating business sustainability.
The lack of or an inadequate code of ethical conduct in an organization is associated with many adverse outcomes. Therefore, it is an absolute necessity for an organization to have good moral values governing its employees. When QNB incorporates the proposed ethics program into its core values, the advantages such as an increased client base will be realized. Right now, the bank makes significant efforts to expand to new regions, and ensuring quality service delivery will be a boost to the process. When the client base increases, it means more profits for the bank which will become the dream employer in the Middle East region.