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The Actuary The magazine of the Institute & Faculty of Actuaries
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Regulation: The role of ethics

The last 10-20 years have seen a rise in the profile of ethics in the professions. There have been a number of contributing factors. Many of these have been negative, including the current financial crisis and economic downturn, perceived to have been caused or exacerbated to some extent by unethical practice in banking and financial services, and the role of professional accountants in the Enron and WorldCom scandals. A longer-term trend of moving away from implicit trust in medical professionals towards greater scrutiny and patient autonomy has also fed into the public’s view of professionals in general.

In some parts of academic literature, and elsewhere, these factors have motivated a general attack on professions, with some commentators identifying a ‘crisis of integrity’ among professionals, and questioning the assumptions of professionalism, such as the desirability of self-regulation and the right of professional institutions to regulate access to specialised knowledge. The general trend has been one of greater scrutiny of professionals by the public, and an accompanying erosion of trust.

In response, professional bodies have, in many cases, opted to defend the ethics of their professions. This has involved making the case for a degree of professional autonomy, and for the role of values as well as rules and legislation in ensuring ethical behaviour. It has also led to an increase in attempts to define and articulate professional values, and to train and educate professionals in ethical awareness and reasoning.

As well as professional bodies, employing organisations have also been taking a more active interest in ethics. Again this is partly due to high-profile ethical failures such as those already discussed, as well as increased public scrutiny of organisational practices, as exemplified in the environmental and fair trade movements.

Finally, individual professionals are beginning to see the benefit of thinking properly about ethics. Today’s professional faces pressures from employers, clients and professional bodies, which often conflict and may lead to ethical insecurity, especially in cultural contexts that are not conducive to discussion in ethical terms. In addition to this, many professionals currently working will have received little or no ethics teaching in the course of their education (although this, too, is beginning to change).

As well as these negative factors, there are strong positive reasons for professional bodies, employers and individuals to want to engage with ethics. Professional bodies can develop a stronger identity and a richer membership experience. Organisations enjoy reputational benefits, and the ability to attract, retain and motivate high-quality employees. Business writers, such as James C. Collins, have written extensively about the long-term business benefits of having a clearly defined and well-understood set of organisational values or principles that are properly built into the organisation at all levels. Individuals can gain the confidence to make informed, reasoned judgments and gain a richer understanding of their roles as professionals.

The IDEA CETL’s activities are informed by the view that the discussion at all levels can be usefully informed by resources from academic ethics. Professional bodies can be helped to maximise the impact of their codes of conduct, published materials and training programmes, employers can be helped to develop an ethical culture based on properly understood, shared values, and individuals can be given the skills and experience to recognise potential ethical issues as they arise, to properly consider the implications underlying these issues, and to articulate and defend a reasoned response.

To achieve this, the CETL uses an interdisciplinary approach, using materials based on real events where possible and strongly informed by the input of professional practitioners, to draw out and explore ethical issues in a contextualised way.

You can find out more about the Actuaries’ Code on the Profession’s website at www.actuaries.org.uk/regulation/conduct_discipline/actuaries_code. The website also has an online test where you can check how up to date you are with the Code.

It shouldn’t take any more than around 10 minutes to do and is fun and informative. The Profession hosts a variety of conferences and training events which look at professionalism and professional ethics.
More information can be found at www.actuaries.org.uk/media_centre/ap_events

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Ethics - made to measure
Richard Maconachie reports on a recent Profession conference where Sir Philip Mawer argued the case for a simplified, self-governing system of ethical standards. This feature can be found at www.the-actuary.org.uk/874366

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Professor Chris Megone (left) is director and Jim Baxter is development officer at Inter- Disciplinary Ethics Applied (IDEA), a Centre for Excellence in Teaching and Learning (CETL) based at the University of Leeds