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Hedge Clippings | Friday 01 November, 2019
The front page article in today's Financial Review suggests there could, or should, be only one rule to determine the legal obligation when providing a financial service: ""Be Fair". If only it were so simple!
Acting fairly, efficiently and honestly - enshrined in Corporations Law - should be a pretty straightforward and simple task, but in reality it is anything but simple, or straightforward.
The difficulty of course is that fairness, like beauty, is in the eye of the beholder. What might seem fair (and/or reasonable) to most of us, might not seem so straightforward to others. This is not only applicable to financial services, but every other facet of life. As business and social values change and adjust over time or across borders, how do those determining what's fair decide if party A has broken the fairness rules, let alone the law?
Fairness used to be something taught in kindergarten, or a code of conduct to be displayed on the sporting field. With the rise of professional sport that seems to have gone out the window, and that might give a clue to the problems with fairness in financial services - PROFIT!
For some years now Hedge Clippings has been lamenting the fact that there has been a general decline in moral values, and this has infected business, and particularly the financial sector. And yet paradoxically there is greater awareness around other aspects of behaviour, and an increasing consciousness of our moral obligations to society.
So is it just the profit motive, or lure of the big bucks or bonus, or just a change in standards? After all, society changes over time, and what might have passed as reasonable a century ago is now most likely to cause an outcry - and vice versa.
The difficulty is in the definition. I may know what I believe is fair - or unfair as the case may be - and have a very black and white view on it. But I'm not sure in the politically correct world in which we now live I'm even able to describe it in that way for fear of it being labelled a racist term.
Changing tack slightly, and ignoring my natural bias, it would be completely UNFAIR if England didn't win the RWC tomorrow night given they played an entertaining style of rugby last week when South Africa were boring.
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