It was 10 years ago this February that the UK’s oldest bank, Barings, went bankrupt.
In what is seen as the quintessential tale of financial risk management gone wrong, an institution old enough to have financed the Napoleonic war collapsed after a string of bad deals by trader Nick Leeson left an £800m hole in the company’s finances.
More recently, corporate scandals involving Worldcom – where chief executive Bernie Ebbers could face an 85-year jail sentence – Enron and AOL/Time Warner, have put business news on the front pages for all the wrong reasons. Even last month, the legal chief at the Association of British Travel Agents (ABTA) was sentenced to four-and-a-half years in prison after embezzling more than £1m.
It seems that fraud, false accounting and dodgy dealings are just as much a part of the business world as the suit, briefcase and patent leather brogues.
However, reforms have been introduced to stop the rot and restore confidence. The Financial Services Authority recently tightened codes of practice on corporate governance, while new regulations now make directors legally responsible for reporting on intangible assets.
But, according to Roger Steare, an occupational philosopher who specialises in corporate ethics, if companies are serious about rooting out foul play among their employees, they must go further than simply complying with a few new rules.
“People confuse justice and integrity,” he says. “Justice is about conforming to laws and regulation, whereas integrity is about doing the right thing when faced with a certain situation.”
Steare worked as a headhunter in the City before deciding he no longer wanted to work in an environment where “people hang their values up along with their coats”. He now runs workshops aimed at helping workers weigh up the pros and cons of tricky business dilemmas and to develop ethical principles for the workplace.
The lack of ethical guidance currently given to UK employees was highlighted in a recent survey from the Institute of Business Ethics. It found that more than half of the 91 FTSE 100 companies that publish codes of conduct for their staff provide no training on how to apply them – even though 60% require employees to obey the codes as part of their contracts.
“It’s like giving someone the keys to a car without making them learn the Highway Code,” says Steare. “Is it any surprise there are pile-ups in the mo