8 August 2012
The code of conduct of Standard Chartered Bank is called “Leading by Example”. The chief executive comments that… “It takes years to build a brand, and can take only seconds to destroy it. The Code of Conduct is our toolkit to prevent this happening. I expect every member of staff to know and follow it. We all have a role to play, every one of us can make a real difference. Everyone has individual responsibility and accountability.”
Those ‘seconds to destroy’ struck this week.
After a ten year money go round with Iranian assets, Standard Chartered Bank is now classified by US authorities as a rogue institution. Standard Chartered until this week has avoided the tarnish experienced by almost all other international bankers. But its reputation has been shattered as light is shone on manipulating markets to disguise $250 billion of Iranian investments. United States sensitivity to all things Iranian means that the fall out may “bring down” British banking regulators, including the likely successor as Governor of the Bank of England, because they held prominent roles at Standard Chartered during the relevant period. The chief executive who launched the code of conduct was seen as the next chief executive at Barclay’s Bank –but probably not now.
A report this week claimed that the bank had hidden transactions by wiping out codes in the payment system that would have identified Iranian clients. Exposing the US in this way “to terrorists, weapon dealers, drug kings and corrupt regimes” has led to nearly 25% loss of shareholder value in two days. Included in the report is an account of a London based director, unimpressed with a warning about Iran, castigating…”you f..king Americans. Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians.”
All of which suggests that Ethisphere, the anticorruption magazine that publishes an annual list of the World’s Most Ethical Companies is as susceptible as any of us to being misled by the front of respectability projected by banks. Standard Chartered Bank has been listed among the five most ethical banks for several years – the others being National Australia Bank, Westpac Bank, ANZ Bank and Robobank.
When will they ever learn…?