Now, more than ever, financial service firms in the UAE are facing increased pressure to maintain a transparent, open and accountable business environment underpinned by an effective ethics and integrity framework, writes Matthew Cowan, regional director for the Chartered Institute for Securities & Investment (CISI) in the Middle East
The UAE is fast establishing itself as a leading global financial hub, with Dubai ranked among the world’s top 10 international financial and fintech centres, according to The Banker magazine, placing it alongside hubs such as London, New York, Hong Kong and Singapore.
The Dubai International Financial Centre (DIFC) also disclosed that combined revenue, mainly derived from leased office space, rose to $221m (£167.4m, €193.7m) in 2017.
Despite this phenomenal growth, the well-publicised downfall of a Dubai-based private equity firm, Abraaj Group, is a poignant reminder that maintaining a skilled, transparent and ethical professional stance must remain at the forefront of every agenda for boards and senior management, not side-lined at times of rapid growth.
Don’t stay quiet
One of the most effective methods to create this desired and open environment is to introduce a speak up procedure and culture.
Financial institutions are increasingly taking steps to remove barriers and combat the fears that prevent employees from raising concerns.
Fear of reprimand, lack of organisational support and the threat of imprisonment prevail as disincentives to standing up and speaking out against unethical practices.
The hope is to ensure, in today’s hectic business environment, that services are delivered to the highest standard with integrity and reputation intact, by being made aware of any issues that emerge at an early stage and fixing them before they are allowed to escalate.
Clearly defining ethical practice and reviewing policies prior to implementing a robust framework are essential.
Obligated to keep secrets?
Conflicting and unclear information is also a prime reason why those who feel the urge to speak up, ultimately, opt out.
Although there is an obligation to report criminal activity, as set out in article 274 of the UAE Penal Code, article 379 states that it is an offence for an individual, who is entrusted with secrets through his employment, to subsequently disclose those secrets.
With the risk of hefty penalties and fines, coupled with the very real threat of imprisonment, employees simply sometimes do not have the confidence to speak up.
Professional bodies, such as the CISI, play an important role in improving the sectors in which they work by ensuring that the focus is on facilitating an environment where ethics and integrity underpin every action and decision.
But for ethics to be ingrained into everyday practice; financial services firms and employees have to fully comprehend the importance of ethical practice and the implications of oversight and non-compliance.
Financial institutions in the UAE, those working for them and the entities governing them, have come a long way in the past decade. Revised legislation is doing much to drive forward the importance of ethics and integrity, but the onus lies not only with firms, but with anyone working in the market, to adopt a culture of full transparency and integrity across operations.
At the CISI, we have always maintained that whistleblowing policies and procedures, while important in their own right, are only truly effective when they form part of a wider ‘speak up’ culture within firms.
One of our most successful initiatives in driving awareness, knowledge and integrity has been the CISI’s Speak Up initiative.
By not focusing on inherently negative term whistleblowing, the objective is to steer away from narrower and more sinister connotations.
Encouraging people to share concerns with colleagues and supervisors as part of everyday practice, rather than as a last resort when the pattern of behaviour has disintegrated, empowers employees with the tools for positive and constructive change.
It is also crucial to have best-in-class qualifications and certifications for financial services professionals based locally, driving integrity and trust in the profession. Together, governments, regulators, chartered bodies and financial institutions can work to maintain and develop the skillset of professionals working across sectors.
There is a plethora of readily available methods and solutions to support institutions in bringing about wider and faster change. Attending professionalism workshops, undertaking online learning and continuous professional development (CPD) all contribute widely to a professional’s knowledge and skills.
One such tool is IntegrityMatters, an online integrity test designed to highlight dilemmas practitioners may face at work. This unique e-learning tool developed by the CISI highlights the importance of integrity and enables users to test their ability to make ethical decisions in the workplace.
A top-down approach
A challenge to address in the local marketplace is the oversight of culture. This must be considered carefully when setting the tone for ethical messages at the top and will ensure these messages filter down through management levels to be properly understood and adhered to by all employees.
Robust internal governance with strategic controls in place is one way to drive firm-wide, cross-organisational behavioural change that encourages employees at all levels to think less about blowing the whistle and more about picking up the microphone.
It goes without question, that integrity and professionalism go hand in hand. Through adequate training and knowledge sharing, while reinforcing ethical practice against a clear regulatory framework, firms are able to influence understanding, skills and behaviour.
With firms recognising and embracing the importance of enhancing professional skills, the UAE market can look forward to a transparent and ethical financial services workforce, which cultivates a culture of transparency, well-founded integrity and high standards of professionalism, on par with economies around the world.