Barclays, one of Britain’s largest banks, was recently involved in one of the largest banking scandals in European history. They were fined over £290million because of manipulated interest rates that effectively made it more expensive for customers (this includes both households and large companies) to borrow money, thus increasing profits made through lending money.
What happens when employees deceive their customers to an extent at which they do it as a ‘favour’ to a third party?
“done… for you big boy!”
Barclays failed in its social responsibility to earn profits whilst at the same time following the law and basic ethical customs (Friedman). What went wrong? In the case of Barclays, management lost their bonuses for this year; in the overall picture, however, an ethical approach to leadership (which would make more sense for the long term as it creates a positive image that boosts profits) must start with an initiative taken by senior managers!
I personally believe that if managers take on responsibility for actually creating a positive ethical environment, i.e. setting clear goals, adhering to policies set out by the company or by managers themselves – thus, if they do what they are supposed to be doing as good managers, the foundation for an ethical business is already laid out.
