Despite bold statements about reform and billion dollar penalties, Wall Street still hasn’t fixed its cultural problems.
Some industries give business a bad name. There are hard-working business owners all over the world who play by the rules, provide the public with a good or service, employ people and better their communities while they do it.
And then there’s the financial service industry. Within this industry there are plenty of good apples who want to help people afford a house, save for their retirement or help someone to put away some money so their kid can go to university. But in the industry there are serious cultural problems that need to be addressed, as well.
Nowhere is this more pronounced than on Wall Street.
Little Change
As the New York Times reports, even after all the bad press from the 2008 financial crisis, new banking regulations and some high-profile court cases that have charged bad actors billions of dollars, a very negative, short sighted culture still prevails on Wall Street.
A new report by Labaton Sucharow titled “The Street, the Bull and the Crisis” has taken a hard look at the US and UK financial service industry.
It found that, of the people in the industry making over $500,000 a year, one third of them “have witnessed or have firsthand knowledge of wrongdoing in the workplace.”
What worse, one in five people in the industry who responded to the survey feel the financial service industry forces them to sometimes engage in unethical or illegal activity in order to be successful at their jobs.
Toxic culture
This is a workplace culture that is rotten to the core and it’s not sustainable in the long term for a business or an industry. So why hasn’t the industry learned its lesson?
“When it comes to the ethos of the industry just as it is reaching pre-crisis levels of employment and compensation, whatever change has taken place remains an open question,” writes Andrew Ross Sorkin in the New York Times piece.
Wall Street needs transparency, it needs whistle blowers and it needs to conduct its business in a sustainable, ethical manner. But the industry’s culture instead values secrecy and profit above all else.
“One of the big problems, it seems, is that so few people in finance are willing to speak up and report bad actors, even after the Securities and Exchange Commission developed a whistle-blower program,” writes Sorkin. “Many of those asked said they worried “their employer would likely retaliate if they reported wrongdoing in the workplace.”
If the financial service industry does not get its culture in order and all the bullies off of Wall Street, we could be staring at another financial crisis—and by then it will be too late for reform.