The Ethics of profit in the banking sector: An Australian case study

The level of trust in Australia’s banking industry has been decreasing in recent times. Society tends to see banks as being purely profit driven entities rather than ones that stakeholders can rely on to behave in an ethical manner. This will not only impact the sustainable success of the banks but will also impact the efficient operation of the Australian economy. The recent creation of a Banking Royal Commission confirms the critical nature of the banking industry. This case study explores what role there is for the professional accountant within the strategic and operational decisions made by banks to help ensure that they include an ethical viewpoint. What are some of the key governance areas that banks should concern themselves with and what role does the professional accountant have in this process? What should guide the accountant in making this contribution to ethical decision making? The case explores these questions using the specific events surrounding the National Australia Bank (NAB) foreign exchange scandal of 2004. This event caused major upheaval at the bank. Several senior managers lost their jobs, considerable acrimony was created at board level, and, the traders involved went to jail. Arguably, it also impacted NAB’s share price for a long time after. The professional accountant is in a good position to help to avoid these events either as a direct player within the decision making itself or where they can use their skills to influence the creation and maintenance of ethical governance structures and processes within organisations more generally. Keywords: banking industry, ethics, professional accountants, case study.