Integrity is about aligning your actions with your believes, about walking the talk and about thinking not only of your personal interest, but also of the general interest. Some can be tempted to believe that integrity is “fluffy bunny” and has no role in business life. This can be an expensive misjudgment.

We see a growing lack of trust in institutions, in traditional structures and even in some cases in leadership.

Events in the financial sector over the past decades have shown that integrity when doing business is essential. Integrity has never been more relevant.

“Trust” is an essential precondition for the financial sector. It means that the public at large “trusts” that the financial sector is focused on its core role of efficiently bringing savers and investors together in ways that optimize the allocation of private savings to financial investment and the funds of clients of the financial sector are safe. It is as investor Warren Buffet once said “It takes twenty years to build up a reputation, and five minutes to ruin it.”

Integrity is about of good governance

Integrity and governance are two sides of the same coin that ensure that the financial sector functions in a proper manner and that the public can trust the financial sector.

Therefore, over the past decade, the regulators have created a legal framework ensuring that some essential guidelines on integrity and governance are respected by the financial sector.

Integrity is about the way business is conducted

Integrity refers to the way financial institutions interact with their (potential) customers, how they deliver their services and organize their activities, and how they contribute to the integrity and trustworthiness of the financial sector as a whole.

Within financial institutions, integrity is dependent upon the engagement of management and employees. Management should set the example, as “the tone at the top” will determine that values and guidelines on integrity become part of the day to day operations of the company.

Recommended measures to be taken in this regard are:

• Give a leading role for the Board of Directors to adopt the necessary Integrity Policy and oversee a correct implementation
• Have the Compliance Officer assist the Board of Directors in the drafting and implementation of an Integrity Policy
• Develop clear Policy on Conflicts of Interest
• Adopt a Remuneration Policy
• Have Board of Directors engage in a Code of Conduct
• Maintain an External Mandates Policy ensuring that Directors engage sufficient time commitment and keep an independence of mind

Finally, as Warren Buffet says: “Trust is like the air we breathe — when it’s present, nobody really notices. When it’s absent, everyone notices.”

Do not hesitate to contact us, if you would be interested in our services in this area.