Innovating Business Ethics: The UK Finance Values Report - The call for a new narrative 

15 December 2022

Tags: Ethical Values

In the latest Innovating Business Ethics blog, the Oxford Character Project focus on the values of the UK finance sector.

We at the Oxford Character Project conducted a UK Business Values survey, analysing the stated values of 221 leading companies, 40 of which were in the finance sector. Our UK Values Report provides insight into what UK businesses value most. In financial services, integrity is the number one value, followed by collaboration. We shared our insights and listened to leaders in financial services at a recent symposium, which focused on the need to embed a more purposeful approach to finance underpinned by character. NatWest is one of our partners and an example of how organisations are seeking to put purpose first.

UK Finance Values Survey

Industry leaders in UK finance are re-examining the impact they can make as the UK seeks steps to support the United Nations Sustainable Development Goals, most recently highlighted by the Prime Minister’s international climate package. In October, finance leaders explored the social licence for finance markets, engaging in conversations about the role of finance in society and the real difference that character-based leadership can make. This discussion is especially timely with the government announcement last week, outlining new aims to support financial services. Many leaders in the UK finance sector have been discussing the role of purpose to drive their contributions to people and planet and have been turning to values to inform how their purpose is practiced. We at the Oxford Character Project conducted a UK Business Values survey with 221 companies, 40 of which were in the finance sector. And more recently, we hosted a symposium where we were able to present our research and listen to the practices and experiences of leaders from a number of financial services organisations. The most prevalent theme from our full-day discussion was the role that narrative can play to embed purpose throughout an organisation and the role of character to support those aspirations. 

Our UK Business Values Report examined the language on websites and annual reports from 221 UK companies, including 40 from the finance sector, in an attempt to identify their values, understand how they define and select their values, and how they put them into practice. The report provides insight into what UK businesses value most. Our finance findings revealed that integrity continues to be the number one value, followed by collaboration, which differs slightly from the overall business report where the same two values are emphasised, but the order is reversed. As in the overall business report, a number of important values, which are emphasised by researchers, are rarely mentioned by financial institutions, including curiosity, humility, hope, and gratitude. Our previous blog post explored the full UK Values report and how character can be leveraged to support values. For example, businesses who value collaboration but don’t prioritise the development of some character behaviours like being open-minded and cooperative will likely fall short of implementing collaboration. Or businesses who value collaboration but don’t prioritise the development of character behaviours like being purposive may lack direction with their collaboration. While values are critical to inform how things are done, strong character is needed as a foundation to enable these values to be exercised effectively. 

Embedding purpose 

At a recent interdisciplinary symposium, we hosted in Oxford, there was resounding agreement that finance warrants a more purposeful approach, one that shifts the industry away from the “Wolf of Wall Street” narrative. Being purposive is a character strength that can be developed and is a promising place to start as it informs organisational direction. UK financial institutions have already begun embedding purpose into their organisations. Lloyds banking group has identified that their purpose is to help Britain prosper – “we do this by creating a more sustainable and inclusive future for people and businesses, shaping finance as a force for good”. Their purpose aims to “create a future where our planet is cared for, people are safe and included, and businesses and communities can thrive”. Standard Chartered Bank has also brought purpose to the forefront, which they claim is “aspirational but grounded in reality”. Some of their commitments that go beyond prosperity include a sustainable world and helping their customers and communities improve their wellbeing and quality of life.

One of our partners, NatWest, is an example of how organisations are embarking on a purpose-led approach. Karen Tracey from NatWest explained that “our purpose is to champion potential, helping people, families, and businesses to thrive. This guides and underpins everything we do. It enables us to build long-term value, to invest for growth, to make a positive contribution to society and to drive sustainable returns for shareholders”. Karen referred to their purpose as their guiding north star, something that - “drives us and defines us, guiding all of our decision-making as we balance the evolving needs and expectations of all of our stakeholders – including customers, colleagues, communities and shareholders”

Bill Furlong, an author who was formerly a Vice Chair at a Canadian investment bank and spent part of his capital markets career working in London’s ‘City’, and co-author Dr Mary Crossan, a leading strategy and character scholar, outlined character’s role towards transitioning and sustaining social value purpose in business (Furlong & Crossan, 2021). They illustrated that social value creation and financial performance are not at odds but are instead positively correlated. For example, they reported Gartenberg and colleagues’ findings that organisations who exhibit high purpose-clarity also exhibit superior accounting and stock market performance. Fred Kiel, co-founder of KRW International and author of Return on Character, also examined the link between the character of senior leadership and profitability and found that leaders whose employees rated them high on integrity, responsibility, forgiveness, and compassion had nearly five times greater return on assets compared to those with lower rated character. However, there is a reason why many organizations have struggled to adopt a value based, purposeful mindset. It is hard. Arne Gast and colleagues (2020) published an article in McKinsey Quarterly, extolling the extraordinary ‘power of purpose’. In this article, McKinsey observed ‘that there is a frustratingly simple reason why business leaders have struggled to square all these circles with coherent statements and credible actions: it’s difficult to solve, simultaneously, for the interests of employees, communities, suppliers, the environment, customers, and shareholders’. Furlong and Crossan’s key takeaway:

It will take much more from boards of directors, investors and executives than simply telling their leadership ranks that they must now operate in a manner consistent with social value purpose. The refined and nuanced judgements necessary require the capacity to stay present, listen, be patient, courageous, accountable, humble, and humane. In short, they speak to the essence of who these leaders are as people – their essential character. (Furlong & Crossan, 2021, p. 243)

Furlong and Crossan suggested that a leadership mindset shift is often required in pursuit of social value purpose, including four major shifts underpinned by character: 1) building and sustaining trust with multiple stakeholders through strong decision-making and judgment, 2) aligning and sustaining competing interests across multiple relationships, 3) navigating complex, dynamic, and ambiguous contexts, and 4) developing strong character including “authenticity, drive, humility, transparency, courage, accountability, and perseverance”. They provide a table of character behaviours (p. 247) described as conducive to social value purpose which you can use to assess whether they are present or absent in your organisational culture.

You may find that a shift towards a purposive approach informs a change in values, as was the case with NatWest. In fact, one of NatWest’s new values is curiosity, one that was at the bottom of our UK Finance Values Report. Their people-focused approach warranted an inclusive strategy to develop their values by asking their customers, colleagues, and members of the community what they valued. We encourage others who embark on a purpose-led initiative to develop a strong character foundation that helps values support purpose as intended. For example, a people-focused, inclusive approach needs to be supported by character strengths of accountability and justice to make sure steps are being taken so all voices are heard. Karen explained that NatWest partner with A Blueprint for Better Business; an independent charity with an ambition to enable a better society through better business. A Blueprint for Better Business developed a framework and phases to embed purpose into organisations. Their first phase is inspiration, which raises an awareness of what the world needs while also challenging the assumptions and beliefs that shape the organisation’s decisions and behaviours. Their second phase is shared understanding, which builds a shared understanding of what it means to be purpose-led throughout the organisation. And the third phase is articulation, which acts as a “north star” and informs strategy and decision-making.

The power of storytelling 

Storytelling is a practical and powerful approach to enable different voices to be heard and understood. According to neurological researchers, people crave and seek out stories and therefore it is one of the best ways to educate, inspire, and create a collective movement. While the “Wolf of Wall Street” narrative may be gripping, it has made some feel ashamed to work in finance and is not conducive to the positive impact financial institutions can make. The leaders at our recent finance symposium strongly conveyed their desire to move away from this narrative. BCG BrightHouse, a global purpose consultancy firm, suggests excavating historic organisational narratives, while also identifying “who you are” and “what need you fulfil in the world”.

David Rouch, an international financial services regulatory lawyer and author of “The Social Licence for Financial Markets” also sees the power of narrative, especially to change behaviour. He suggests narrative can support the re-evaluation of finance in society while also healing the relationship between the two and describes three ways this can be done: 1) “making the desired ends of financial activity, beyond simply making money, more salient, increasing the likelihood they will become a behavioural focus”, 2) “providing a frame of reference for market decisions that operate by reference to a wider understanding of human wellbeing”, and 3) “forming market participants across the finance ecosystem – the culture of firms and the character of those within them.

Developing a strong and captivating narrative begins with a purpose that provides a compelling “why” and gives a sense of direction. Sinek, an American author of several books including “Start with Why”, suggested that great leaders clearly and loudly convey purpose throughout an organisation, which helps not only those who are part of the organisation feel personally purposive, but also draws those outside the organisation towards it. In his book, he conveyed that people don’t always want to buy what businesses do, but instead, they want to do business with people who believe what they believe.

NatWest is a business that uses the power of storytelling as a mechanism to embed purpose within the organisation. The bank have identified groups of champions and advocates across the organisation, at different levels, to convey their purpose. Champions of this new narrative need not only be inspiring, but also need to connect and listen to others and be able to challenge and be curious. NatWest shared that they needed to activate on being patient throughout the process. While some champions of ideas may be ambitious to do it all and do it quickly, not everyone is on the same page. Being a champion of a new narrative requires the patience and understanding to do things at a slower speed to gain collective movement. NatWest has benefitted from creating the space to have conversations, share and listen to stories, enabling narratives to be culminative, authentic, and robust. And this method needs to be underpinned by character for it be effective. For example, a sense of respect and curiosity need to be exhibited for people to feel comfortable sharing and challenging narratives in a safe space. NatWest conveyed that their values of being inclusive and curious helped inform this process. They often use the phrase “ask, don’t tell” to help their inclusive and curious values come alive into practice. 

What leaders can do  

Leaders have a unique position to cultivate values that embed a shared purpose for their organisations. We suggest three initiatives leaders can take to do so. The first begins with developing your own character. Consider which character behaviours you may need to strengthen to cultivate a habitual practice of optimized judgment to navigate the complexities of embedding a more purposeful approach and creating sustainable, trusting relationships, as outlined by Furlong and Crossan. If you missed it in our last blog post, you can review a comprehensive list of virtues and vices here, which you can use to inform areas for development.

Second, embed purpose throughout your organisation using a compelling narrative that unites everyone within your organisation and draws others to your organisation who align with your purpose. In doing so, consider David Rouch’s suggestions to support the social licence of your financial institution and assess your organisational character using the table of character behaviours to inform areas for improvement. You can also look to financial institutions who are embedding purpose to learn about which methods will work best for your aims.

Third, call on a set of values that align with your purpose, underpinned by character. Your values will inform how you embed purpose and may require reconsideration as you shift your organisation’s purpose. We invite you to align HR initiatives according to changes in your purpose and values so that your new message is heard loud and clear throughout the entire organisation. For example, if one of your new values is curiosity, you can recruit, onboard, develop, reward, and promote based on curiosity. In our previous blog post, we provided a list of examples of how to embed character into your HR initiatives, which you can find here.

Coming up next 

Our UK Business Values survey focused on three major sectors including Finance, Law, and Tech. We have examined each area’s stated external values, along with a large-scale study of perspectives from people working in each sector. In this post, we shared insights from the Finance sector, with some additional thoughts from NatWest, and as results become available, we will share insights from Law and Tech. We cordially invite you as IBE members to join our research. Please reach out to us at The Oxford Character Project to get involved (we are actively seeking UK tech firms in particular).


Oxford Character Project
Oxford Character Project

Written by Corey CrossanLily Elsner, and Anjali Sarker from the Oxford Character Project – where we focus on the human dynamics of leadership and the qualities of character that enable leaders to build trust, think with clarity, embrace diversity, empower others, and persevere through difficult times.