Let me begin by offering what is called in the United States these days, “full disclosure”. I am a customer of First Citizens and I was one of many thousands of citizens who bought a few shares when that bank had its recent initial public offering (IPO).
However, even if I did not have such a relationship with the bank, I would have still been aghast and appalled, as I was and still am, to read the comments given by the chairman of the bank, Nyree Alfonso, with regard to the issue of a senior executive of the bank purchasing 659,588 shares during the bank’s IPO last year.
That single transaction raised so many issues of concern with regard to process integrity of the IPO as well as to the fiduciary integrity of senior executives of the bank that Minister of Finance Larry Howai, who is also the immediate past CEO of the bank, was disturbed enough to arrange for PricewaterhouseCoopers to conduct a forensic audit into the entire IPO process.
Now I have no idea what the result of that audit would show, nor whether it is even completed. But what seriously concerns me, both as shareholder and as citizen, is what the comments of Ms Alfonso reveal about the ethical standards, or more properly the lack of ethical standards, at that bank.
According to the Express report, the bank’s chairman told the reporter in a telephone interview that, “If you can identify to me what rule or regulation was breached, I will be happy to direct the group internal auditors and even the PricewaterhouseCoopers forensic auditors to investigate it. But you cannot use morals and ethics because everyone’s are different.”
Ms Alfonso added that as chairman of the group and as a lawyer, she saw nothing out of the ordinary in the executive’s transaction and stated that, “If he made a profit legitimately then what is the problem? Tell me what he did wrong.” And, at the end of the interview, she stated: “This is a complete minor furore. No regulatory rule was broken. Is that because no rule has been broken (the argument against him) is now moral, ethical reasons?” she said.
Do you begin to see, Dear Reader, the reasons why I am so appalled? And let me hasten to state at this point that my concern now has very little to do with the actual transaction conducted by the senior employee and everything to do with the fact that the chairman of the bank (owned by the Government and people of Trinidad and Tobago) and a lawyer to boot, sees no role for a consideration of ethics in the assessment and evaluation of her employee’s conduct.
It is enough that no rule or regulation was broken for her to conclude that the transaction in question was perfectly legitimate and there is nothing that she, or anyone else, needs to be concerned about in relation to the conduct of the particular employee. The logical extension of that viewpoint must be that any behaviour by any employee of the bank is legitimate just so long as that behaviour is not in breach of written rules and regulations.
Ms Alfonso is chairman of the bank and a lawyer. Surely at some point in the development of her career she would have learnt that no institution or society can function solely on the basis of written rules and regulations. This is so for the simple reason that it is impossible to document a rule and a regulation that would cover every possible eventuality.
What holds inappropriate behaviours in check, in the space beyond written rules and regulations, are precisely codes of ethics, whether written or unwritten, which are understood and accepted by the vast majority of citizens or, in the case of the bank, the majority of its employees.
Ms Alfonso’s complete dismissal of the role of ethics in guiding and evaluating employees’ conduct leaves one to wonder whether the bank has a code of conduct or a code of ethics for its employees. And, if it does, whether the chairman is familiar with that code and/or understands what it means.
Indeed, Ms Alfonso’s complete dismissal of the role of ethics in guiding and evaluating employees’ conduct also leaves one to wonder whether she is in any way familiar with the rise of the international movement for ethical banking and the fact that more and more banks all over the world are making their business decisions on the basis of certain ethical principles which they have publicly ascribed to.
In this respect it might be useful for Ms Alfonso to consult, as one of many examples, The Code of Ethics and Disciplinary Procedures for Bankers issued by the Tanzania Institute of Bankers. She would find, if she did so, the following statement in the introduction to that document:
“Banks need to have an ethical base — this is sound commercial sense. Business decisions should not take place within the framework of ‘anything goes’. Every society therefore needs to have a set of principles and moral codes to work to. A responsible business needs to have a clear idea of right and wrong behaviour… It is therefore essential that a collective statement of standards for personal and corporate behaviour be subscribed (to) by all persons entering or already in the banking profession in Tanzania.”
But I suppose that Ms Alfonso’s apparent ignorance of, or indifference to, the role of ethics in guiding or assessing the conduct of corporate employees and of corporations themselves, should not really shock us. That absence of any ethical foundation has been from the start and still remains, the defining characteristic of this Government and of its entire regime.
From Reshmi to Nyree and inclusive of all the thousands of State board appointees in between, the only necessary qualification and necessary criterion for such appointment seems to be a complete absence of any personal moral or ethical code.
—Michael Harris has been for many years a writer and commentator on politics and society in Trinidad and the wider Caribbean.