Professional Ethics are a specific set of principles which includes the individual as well as well as organisational standards of behaviours and values expected by employees working in an organisation. These encompass the rules and regulations of ways in which an individual must act in various situations as well as with other individuals present in the organisations. It is of vital importance that employees in the organisation follow these principles and encourage ethical practices within the firm. The following report is based Barclays Plc, one of the largest financial services firm in the UK and covers the principles of ethical behaviour and its role while working with internal and external customers (Sadowski and Thomas, 2012). It also covers appropriate actions to be taken at times of breaches in ethical codes and ethical responsibility of finance professional in promoting susta
1.1. Explanation of fundamental principles of ethical behaviour
It is imperative for professionals in any organisation to work in ethical manner and encourage ethical practices within their respective organisations. However, there are certain fundamental principles of ethical behaviour which must be understood by individuals working in professional organisations.
These principles are as follows:
Integrity: It is necessary for professionals to follow and promotes transparency, honesty and straightforwardness. This requires professionals to follow these aspects with all their business and professional relationships throughout their professional lives.
Objectivity: Professionals in organisations are required to pass certain judgements throughout their career. It expects these professionals to take their decisions without having conflicts of interest, without being under external influence as well as without being biased.
Professional and technical competence and due care: These professionals are expected to possess and retail certain skills and professional knowledge to provide the most appropriate type of professional services to employers or business clients.
Confidentiality: This principle induces respect and protection of confidential information which is acquired by the professionals through business and professional relationships(Stappenbelt, 2013).
Professional Behaviour: It facilitates the concept of compliance with all the rules and regulations that are necessary and credits the profession they are working for,
1.2. Legal, regulatory and ethical requirements affecting financial and accounting sector
The accounting and financial sector of the UK is considered to be two of the most rigid sectors when it comes to compliance with legal, regulatory and ethical requirements. These requirements affect the overall structure as well as functions of the operations in these sectors.
These aspects are described below:
Civil Law: This law undertakes the property and rights of individuals as well as organisation into consideration. It aims at settling disputes between parties which usually results in granting of compensation. In financial sector, this law helps in settling disputes between financial institutions and their clients.
Criminal Law: This law undertakes the breaches and offences by individuals or organisations which affects the society in a negative manner. State steps in and the party is subjected to criminal prosecution. In case any unethical activity is performed by an individual of accounting and financial sector, this law comes into force for these professionals or organisations (Shani, Belhassen and Soskolne, 2013).
Compliance: It is important for organisation of these sectors to comply with the set of rules drafted for their operations. They must adhere to the codes of practice to ensure a consistent and smooth running of their business operations.
1.3. Role of professional bodies in accounting and financial sector
In the UK, there are various professional bodies that that govern the functioning of accounting and financial sector of the country. They have a prominent role in setting up the operations of these sectors. Various professional bodies and their roles are described below:
Association of Accounting Technicians (AAT): This professional body offers technician level qualifications and higher apprenticeships for individuals who undertook examinations and possess relevant work experience for accounting technician. The sponsoring bodies of AAT until 2017 were, ICAEW, CIMA, ICAS and CIPFA.
Institute of Chartered Accountants in England and Wales (ICAEW): This professional body works towards enhancing the practice by encouraging compliance with the Code of Ethics along with professional conduct (Harfield, 2012).
International Federation of Accountants (IFAC): This organisation professional body aims at strengthening the accounting profession and encouraging adherence to set professional standards . Within the UK, this body is responsible for developing reports, comment letters and position papers that are relevant to accounting sector.
1.4. Need for individuals, organisations or industrial sectors to operate within codes of conduct and practice
Code of conduct refers to the specific set of norms, rules and regulations that are required to be followed by individuals, organisations and industries. The reasons they are expected to operate within codes of conduct and practice are described below:
Individuals: Professionals working in the organisations are expected to work within a specific code of conduct as it promotes honesty, growth and satisfaction in their personal careers. They are expected to work in such manner as it enhances their self growth and their importance within their respective companies and peer groups (Hannafey and Vitulano, 2013).
Organisations: The ethical codes of organisations include impartiality, public accountability and prevention of corruption. These codes enable the firms to fulfil their duties towards employees, their customers as well as government.
Industries: The most important codes of conduct and practice requires industries to work ethically in a manner which keeps their workers safe as well as protect the environment. Another reason of their working in ethical ways is that these allow them to foster the growth of their country.
1.5. Risks of improper practice to an organisation and importance of vigilance
In any organisation, risk refers to happening of an uncertain events that leaves a negative impact on the company. For an organisation like Barclays Plc, there are huge risks associated with improper practice.
Some of these practices are described below:
Money Laundering: This process refers to concealment of transformation of money that is illegally acquired into lawful assets. In case Barclays Plc indulge in money laundering, the firm would be subjected to gaining a criminal status. Moreover, with corruption and illegitimate handling of finance, the firm would lose its status, integrity and customers (Shahriari and Baloochestani, 2014).
Terrorist Financing: This activity means providing financial support for terrorist activities. Barclays Plc, if indulged in terrorist financing would be exposing itself, as well as the people of the UK to various risks like safety of their health and infrastructure. It would endanger the employees, their peer groups and the whole nation which would result in the firm getting a terrorist status itself as well as disbarring and loss of license.
Due Diligence: In accounting and financial activities, vigilance is necessary as it keeps a track on the activities of this department in the firm. Due diligence is an activity that could help Barclays Plc keep a track of their investigation and could manage their financial resources in ethical and appropriate manner (Han, Park and Jeong, 2013).
1.6. Opportunities for maintaining an up-to-date knowledge of changes to codes of practice, regulation and legislation affecting the accounting and finance sector
It is essential for managers of accounting as well as financial sector to have up-to-date knowledge as it would help them in giving a better service to their customers as well as employer. Accountants and financial managers must have up-to-date knowledge about the changed ethical codes, auditing and reporting standards, legislations, etc. managers of these departments could enhance their knowledge through professional journals, enrolling themselves in updated courses, ensuring compliance with Continuous Professional Development (CPD) and so forth.. These sources could be opportunities for these managers to enhance their knowledge.
2.1. Ethical working with clients, colleagues, suppliers and others
Ethical working refers to working in ways that are appropriate for organisations. Ethical behaviour is necessary to be adopted by professionals to sustain long-term relationships with other stakeholders of the firm (Prakasha and Jayamma, 2012). While working with clients, colleagues and suppliers, it is imperative that ethical principles such as honesty, integrity, loyalty and professionalism are well practices by the employees. For instance, it is ethical for professionals of Barclays Plc to be honest with their clients regarding the investment decisions the firm is taking with their money. There are certain threats to these principles like self-interest, self-review, advocacy, etc. that influence decision-making of individuals. Professionals must safeguard these principles and ethically operate in order to promote these high standards while working with others.
2.2. Importance of objectivity and professional distance between professional duties and personal life
Professionals working in organisations must be free from any kind of favouritism. The principle of objectivity states that the information of financial and accounting of an organisation must be independent as well as non-bias (Hinshelwood, 2018). Concrete evidences must be present while producing these information. In case the employees and managers of these departments lack in maintaining the professional distance, then senior managers must take charge to ensure the authenticity of the information. In any circumstance, the professional duties of the managers must be rightfully achieved. Conflicts of interest in these departments must be dealt effectively by organisations by imposing policies and regulations regarding these threats to ethical principles and ensure a significant distance between their personal and professional lives of employees.
2.3. Importance of adhering to organisational and professional values, codes of practice and regulations
Barclays Plc is a world renowned banking and financial sector company which has certain professional values, codes of practice and regulation that defend its purpose and working. Ethical codes are required to be set in an organisation in order to ensure protection of interest of customers, reputation of the organisation as well as enhancement in the professional behaviour of employees.
The values of the firm are Respect, Integrity, Service, Excellence and Stewardship. It is imperative for its employees to adhere to these values while providing their services to customers. They must be transparent, regularly report their financial and accounting information while ensuring authenticity and also paying fair and appropriate price to suppliers. In case employees fail to comply with these codes and values, they would be subjected to penalties and fines which would affect their career negatively (Parker, 2013).
2.4. Importance of adhering to organisational policies for handling clients’ monies
There are certain policies in Barclays Plc that safeguard the financial resources of their clients in the UK and beyond.
These policies are described below:
Anti-money Laundering and Counter-terrorist Financing: The firm is strictly against laundering money and terrorist financing. It is set in order to fulfil the obligations of the firm towards the legislation of the UK.
Data Protection: This policy safeguards the financial and personal information of their clients. They intend to promote accountability and confidentiality towards their clients.
Bribery and Corruption: The firm has a rigid policy against corruption and bribery practices that could endanger money of financial resources of clients.
It is required for the employees within to adhere to these policies in utmost faith in order to grow within the organisation and and fulfil the organisational values perfectly. Strict actions such as suspensions, demotions, etc. are taken by the firm in case professionals show in-adherence towards these policies (Robison, Pritchard and Ellin, 2012).
2.5. Circumstances when confidential information should be disclosed and who is entitled to the information
Confidentiality in organisational context refers to the keeping certain information under utmost secrecy and its non-disclosure without the consent of the client. However, there are certain circumstances under which these information will be disclosed, these are as follows:
- In case of any legal intervention, information would be shared with government agencies
- In case of death, This information would be disclosed with the guarantees of the deceased client.
- In case the court orders disclosure of the private information of clients, these information are disclosed to the lawyers pertaining the court orders.
2.6. Importance of working within the limits and confines of one’s own professional experience, knowledge and expertise
It is necessary for professionals to work within limits of their experience, expertise and knowledge as it ensures clear pathway to success for these professionals. It is imperative to set the boundaries of one's roles and responsibilities and work according to those boundaries. In case the professional fails to work within the set limits, for instance, breach of contracts or trust, or fraud and so forth, the consequences would be grieving for their professional career. It is of vital importance for them to work in appropriate ways as it promotes client engagement and their long-term satisfaction with the firm (Nucci, Krettenauer and Narváez, 2014). For instance, if clients give wrongful information to clients about a third party without prior knowledge, its consequence would have a very negative impact on their professional integrity and expertise. Thus, it is required for employees to work in a set frame for achievements of personal and professional goals.
3.1. Relevant authorities and internal departments to which unethical behaviour, breaches of confidentiality, suspected illegal acts or other malpractice should be reported
There are various authorities which undertakes actions against unethical behaviour in organisations. They must be rightfully reported in case there is any witness of wrongful deeds within the organisation (Baase, 2012).
These authorities and departments are mentioned below:
- Regarding any money-laundering activity or terrorist financing, National Crime Agency (NCA) as well as Money Laundering Reporting Officer (MLRO) must be reported.
- These departments along with Her Majesty's Revenue and Customs (HMRC) must be reported during any wrongful tax-related activity or similar errors.
- In case of breach in codes of practice or conduct in a firm like Barclays Plc, Money laundering officer and fraud officers must be accurately reported of the incident.
3.2. Appropriate action to take in instances when requests for work are beyond the employee’s competence
There are certain scenarios in professional career of an individual where they are asked to work beyond their limits as well as competence. It creates a lot of pressure on employees if they do not possess necessary time, training, support or expertise while performing a task beyond their limits. In case a professional faces this situation, they must immediately inform their superiors regarding the shortcomings they would face while accomplishing the task (Januszewski and Molenda, 2013). They must ask for support, training as well as adequate time to successfully complete the activity they are required to perform. In case organisation fail to provide support, external professionals must be approached by the firm to help the employee to successfully complete the activity assigned.
3.3. Identification of inappropriate client behaviour and how to report it
There are time when professional faces certain clients who are inappropriate and might have a negative impact on the operations of the companies. These clients might be frauds, criminals or even terrorists. To adequately identify their inappropriate behaviour, professionals must focus on few aspects:
Client's body language: Nervous mechanisms usually denote an intention of unethical activity.
Illegitimate Demands: These refer to the illegal demands the clients have for their clients.
Resistance: Professionals must denote the resistance of clients while denial of approval to conduct a wrongful activity. The clients might force or use coercion to make the professionals agree with their demands (MacKinnon, 2017).
In case the professionals of Barclays Plc encounter such inappropriate clients, they must immediately report their superiors and external authorities like the police and government agencies who could closely examine the situation and take appropriate actions. These actions must be taken without any delay in order to ensure rightful actions within due time.
3.4. Internal and external reporting procedures to be followed if employer, colleague or client has committed, or may commit, an unethical act
During their whole career, it is one of the prime responsibilities of the professionals to report unethical activities taking place within the organisation. This concept is formerly known as whistle-blowing. Professionals must concern reporting these act at the first opportunity they get.
- In case employees suspect any unlawful activity by the clients, they must report the same to the managers as well as the employer of the organisation.
- When professional suspects occurrence of any unlawful activity of the employer, they must internally inform it through a detailed report and evidence to the Board of Directors.
- Lastly, the professional must approach government agencies and police in case they suspect unethical acts within the operations of the company approved by the board of directors.
3.5. Strategies that could be used to prevent ethical conflict
Ethical conflicts could be constructively resolved by professionals in their workplace by applying various strategies. These are as follows:
Knowledge: Professionals must gain effective knowledge about the code of conducts and practices of the firm and must encourage fellow colleagues to gain the same. This would require them to widen their scope towards the ethical practices that are required to be followed within the organisation (Dent and Whitehead, 2013).
Training: In an organisation like Barclays Plc, focus of management must be on providing effective training and development programmes to train their employees regarding the ethical banking and financial procedures and must effectively monitor their performances to ensure the rightful following of these methods (Banks, 2012).
Foundation: The firm must create a strong foundation and must develop concrete policies regarding ethical manner and process within the company. They must also ensure that employees breaching the policy must be rightfully punished and fined which could set an example for other employees.
4.1. Explain the importance of an ethical approach to sustainability
Barclays Plc is highly respected and valued in the UK market and along with this, many additional financial institutions follow the framework while working in the accounting and finance sector. Ethical approach in operations would ensure long-term sustainability of the firm as its operations would be approved by the government, auditors as well as it would ensure attraction of more clients from the country as well as all over the world. Ethical approach would help the firm in managing resources of countless employees appropriately and thus, would sustain in the market with such high competition.
4.2. Responsibilities of finance professionals in upholding the principles of sustainability
In Barclays Plc, it is the responsibility of finance professionals to uphold the principles which ensure long-term sustainability of the firm. They must promote a culture based on ethics and must focus on eradicating the unethical processes like money laundering. They also must ensure the rightful following of principle of objectivity and integrity while performing their duties for the firm (Knapp and VandeCreek, 2012). The emphasis of these professionals in Barclays Plc must be on evaluation of their practices and assurance of accomplishment of rightful and ethical practices within the firm. They must also take environmental, social and financial factors into consideration to fulfil their responsibilities as a finance professionals of Barclays Plc.
Thus, it is concluded that it is imperative that professional ethics be followed by the company's employees and professionals which is important for its existing and sustainability. One must understand the fundamental principles of ethical behaviours and relevant requirements that affect financial and accounting sector. It is also necessary to ethically work with clients, colleagues and suppliers for smooth running of business operations. Professionals must also adhere to company's policy regarding ethical practices. Appropriate actions while security breaches are very necessary to be taken by professionals to ensure smooth and ethical working for the organisation. Lastly, finance professionals must understand and follow their ethical responsibilities to ensure sustainability of their business organisation.
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