In this series of conversations about ethical leadership, we speak with high profile ICAS members who have reflected on what it means to do the right, or ethical thing throughout their careers. It is hoped that the conversations provide practical guidance to help anyone in a challenging professional situation where they are required to seek the truth and then act.
As well as interviewing these ICAS members individually, under Chatham House rules, we also surveyed our members in a quantitative survey during 2024, conducted by Dodds & Law Research Associates. We received 710 responses from a survey of 10,000 members and we have taken some of the results and findings and used them in this report to highlight the wider views of members.
Insight two
In the second instalment of our ethical insights series, we look at the power of integrity. Acting with integrity is fundamental to the accountancy profession. For CAs, it is about doing the right thing, but it is also about reputation. Your professional reputation is your personal brand, it’s what you will be remembered for, but your reputation also defines the standing of the CA brand. It can take years to build your reputation as an ethical leader, but in just one moment, one lapse in judgement can shatter it all. In this instalment we look at the ethical dilemma where short-term commercial gain can come at the sacrifice of potentially compromising the values of ICAS, the profession and what you believe in. The question is, what do you want to be known for?
A core part of what it means to be a professional is an obligation to operate to a higher standard – that your credibility rests not just on your technical expertise but your probity and resilience.
This is not entirely altruistic – professionals get to charge a premium for their services because they are seen to operate to this higher standard. It was however, seen as a fundamental requirement for those joining (and staying in) the profession:
“Before I trained as an accountant, I had a job on the buses where I quickly came to realise there were three types of people. Those who set out every day to steal as much as they could from the bus company. Those who would not deliberately do so, but if someone dropped change on the floor would view this as money that had fallen into their laps. And those that would not dream of taking anything. My ethics were very clear – all of this belongs to the bus company, and I’m not taking any of it anytime, ever. If you are going to be a Chartered Accountant, then you need to be in this third group.”
“When I was training it was always implicit that there was a high ethical standard. You were trained to be a Chartered Accountant and that was a role that came with trust and respect.”
Another theme of ethical leadership is about consistency of behaviour over time. Most people can point to an instance where they have done the right thing. What really matters is that your behaviour is constant, regardless of circumstance, and that it matures as you mature professionally:
“When I was studying, the ICAS exams tended to be taught by practitioners who would bring their own life examples to bear in the classroom. What this taught me was that ethical leadership is not so much about getting a right and wrong answer every time, but following the right path. This is particularly important in grey areas where there are pluses and minuses to action. It is about constantly questioning, constantly coming back to the values that are instilled in you – making sure your decisions are based on those values.”
“An ethical leader is someone who has a very high level of integrity – something that they will refuse to compromise on. Their behaviour needs to be consistent, and it needs to be something others will want to emulate.”
As you grow as a professional and learn from others, your capacity to exercise professional judgement matures. There is, however, a clear expectation that right from the start of your career you have an obligation to do the right thing:
“My integrity is incredibly important to me, and I get very angry when I hear examples of professionals who are not behaving in this way because it casts a shadow over me – it pulls all of us back.”
“I can remember staff members who were often quite important to a particular practice commercially but who did things that were not aligned (with the values of our profession) and who I had to ask to leave. This is an inconvenient truth because you have to take a short term hit in every sense, but you know long term, to preserve and enhance the reputation of the firm you need to deal with these sorts of things. Asking a young manager to leave because you know they are never going to be up to (providing ethical leadership) – that was much harder than asking a senior partner to resign because they’ve done something wrong. I had no problem with that at all.”
While there are now multiple layers of regulatory oversight – arguably because the profession has not always behaved with probity – what is also apparent is that self-regulation is still very much alive and well. What drives the profession to demand high standards is a recognition that behaving ethically protects reputation and that reputation is your licence to operate:
“I remember when we changed our auditors, the senior partner came to me and asked, ‘what do you expect of us?’ And I said ‘I expect not to see you in the newspapers with your reputation being challenged because I’m very confident, we are never going to give you a problem. But if you’re in the papers helping other clients cross the line, people will think – that’s why we choose you – because we also want to get away with it – so the most important thing for me is your reputation’.”
Implicit in this view of the world, is a recognition that there will always be tension between doing the right thing and pursuing what looks commercially attractive:
“Professional services firms are also commercial organisations and there is a need to reconcile short and long-term gain. In the short term, you can do all sorts of things that make you a lot of money but if these damage your culture you will really struggle over time. What I would say to partners when there were difficult ethical choices to be made was better to ditch a client than get involved in something that might be damaging over the longer term.”
“Some years ago, I found myself dealing with a large, listed audit client where we fundamentally felt that the culture and the attitude towards our audit team was inappropriate. It was a very commercial contract for us. But when we reflected on it as a leadership team, we felt quite strongly that we had to take a position. We were quite clear with the client on the behaviours that we expected and when these still did not materialise we resigned as auditors. That was a tough decision from a commercial point of view, but it was the right one.”
Being prepared to operate to a higher standard is not only a requirement where there may be systemic risk – it matters regardless of the materiality of the situation.
“One of the first jobs I ever did – an utterly insignificant subsidiary of a major insurance group – I remember it becoming apparent there had been transactions with directors that required disclosures in the accounts that had not been made. At the time I was as junior as you could get, but I remember taking it to the manager, then the partner and then the partner taking it to the client. I can’t even remember how it was resolved. But you know, sometimes, there are issues where it is easier just to move on, but where you have to put your hand up and say, ‘this is not right’.”
“I trained with a small firm working with small clients. One of these was a printing company. I remember writing up the cash book for this client when a man came to the window and said he wanted to pay for programs that had just been printed. So I said ‘right, I’ll just do your receipt’ when the finance director came over and said, ‘you don’t need to do a receipt for this – this is a cash sale’. I remember being uncomfortable about this and taking it back to my senior partner in Glasgow who said ‘anything that comes in goes through the books. I will phone the FD and give him a metaphorical spanking’.”
Operating to a higher standard is also what gives the profession its legitimacy:
“I’ve been a member of ICAS for 44 years. Ethical leadership is something that has been inculcated into our way of thinking. It was almost taken as a given that if you were an accountant, a Scottish Chartered Accountant, there was a degree of integrity expected of you.”
“I am proud of the fact that we are an ethical profession – in many ways that is what gives us our licence to operate.”
