Dr. Tumuweine Twinemanzi, BoU’s Executive Director Supervision delivering a keynote on the Conduct and Ethics in the Financial Services Industry – The Regulator’s view.
Experts drawn from the Financial Sector Tuesday convened at Protea Hotel in Kampala to discuss the role of Ethics in creating sustainable businesses.
The dialogue was convened by Absa Bank Uganda Limited and according to the Bank’s Managing Director, Mumba Kalifungwa, the idea is related to “our citizenship agenda.”
“One of the things or the pillars that we look at is creating a thought leadership. So, for us when it comes to banking services, banking is a relationship of trust. The need to show consumers that their deposits are safe with us and we stand for high ethical standards. so, we are showing contribution in terms of thought leadership and helping to recreate awareness on the importance of ethics in the performance of our business and mandate as bankers,” Kalifungwa said.
He added: “When there is no adherence to ethical guidelines, there will be consequences. Sometimes it may result into imprisonment, people losing their source of livelihood and all sorts of negative connotations. As they say, forewarned is forearmed and that’s why we are supporting the importance of the dissemination of ethics in creating a sustainable business. The strategy that informs why you exist or what you are trying to achieve in a particular sector should be built on the strong foundation of strong ethical values. Values that define and shape how you operate as individuals in that organization and that’s why we are insisting that whatever we do, it should be on the basis of a strong ethical foundation because our customers expect us to protect our interest as we manage their deposits in the discharge of our duties. Like any other institution, there will always be elements where people are in a situation; when you have to choose between right and wrong. We are at the top in terms of awareness. We have a strong regulatory framework and strong guidelines in terms of how you are expected to operate.”
Absa Bank Uganda Managing Director, Mumba Kalifungwa.
According to the Executive Director Supervision at the Bank of Uganda, Dr. Tumuweine Twinemanzi, “Without ethics, you don’t have governance and when you don’t have governance, that’s the beginning of the failure of the trust component (Capital stock).”
“If you don’t have ethics, you can’t build trust. Banking does not sell loans or services, they sell trust. Ethics sets the tone for the governance culture,” he said.
Tumubwine says the timing of the dialogue is “not the ethics is at an all time low.”
“But if you look at the economic circumstances, economic recovery is slow (inflation and geopolitical situations – Ukraine, M23 etc) and then the shareholders of these institutions for the last 2-3 years were not earning dividend. So, they are putting pressure on these institutions to generate revenue. Now, in an environment where you have pressure from the employer to deliver on numbers, you have an uncertain economic environment, there is a tendency to want to sidestep ethical conducts to try and meet your target,” Tumubwine said.
Some of the participants following the engagement.
Phumelele Zwane, Absa Group Head of Ethics says that “Within the African context, we are improving” in terms of ethics.
“The graph is facing upwards. We are working with our counterparts in the global space on the conversation of ethical conducts,” Zwane says.
However, she adds, “Post covid and the financial pressures, and the change in environment, it is true that people are feeling the pressure to show that they are financially secure.”
Zwale suggests that there should be a need to make sure that Profit need to be balanced with the People and the environment.
