The recent public tribulations of firms such as BP serve as a further reminder of the importance of business ethics and how lapses can seriously impact corporate operations and reputations. (See Richard's post on BP and brand.) The case for business ethics is reiterated strongly by John Plender and Avinash D. Persaud in their recent failure of business ethics series in the Financial Times and their new book All You Need To Know About Ethics and Finance. As such examples as Enron and Parmalat highlighted, good governance remains very much a shared global challenge – not one limited to emerging economies.
This point was emphasized by private sector representatives in a global dialogue last Wednesday, organized by the World Bank Institute to discuss coverage of private sector roles in the World Bank draft paper on governance and anti-corruption. The discussants also considered the role of the banking sector in promoting good governance and anti-corruption measures.
Plender and Persaud use the case of Citigroup in their book. In addition to ensuring high standards among their own staff, one can argue that banks should urge similar standards from their clients. Is it viable to build on the success of the Equator Principles model for handling environmental and social risks, to have a similar commitment to demand good governance and anti-corruption frameworks to minimize ethical risks?