The reputation of Australia's financial industry has collapsed, and now ranks last in a major survey

  • The Australian Ethics Index has fallen six points since 2017, from 41 to 35.
  • The corporate and finance sectors saw significant falls.
  • The Governance Institute of Australia says the index suggests numerous high profile scandals and the alarming corporate breaches are undermining confidence.

Public trust in big corporations — especially banks and any profession associated with them — is being eroded by the stream of stories of malfeasance and scandals over the past year.

The Governance Institute of Australia’s annual Ethics Index has fallen six points since 2017, from 41 to 35, dragged down by the poor perception of ethics in the banking sector.

While most sectors remained relatively constant, the corporate and finance sectors had significant falls.

For the third year in a row, Banking, Finance and Insurance was the lowest category in the Index. Its score dropped dramatically. More than half (55%) now consider the sector unethical and only 28% see it as ethical.

The ethically important issues within the banking and finance sector continue to be executive salaries, bribery and corruption issues and executive bonuses.

For Australians, the more the CEO is paid, the more unethical they think it is.

About three-quarters (77%) think it is unethical if CEO is paid $3 million or 50 times the average Australian’s yearly income.

Senior leadership are also expected to ensure good corporate culture. The majority (76%) think that the board should take action when a senior executive’s behaviour is poor.

The most ethical organisations were seen to be primary schools, medical charities, and pathology services. The least were pay day lenders, life insurance companies, and Federal and state parliaments.

The most trusted professions were ambulance officers, followed by fire fighters, and nurses. The least trusted were Federal politicians, state politicians, and real estate agents.

“The message here is clear — those who are seen to be working selflessly for others are generally more trusted,” says Steven Burrell, the Governance Institute’s Chief Executive.

“If corporations like the banks and other financial institutions continue to be exposed for pursuing profit to the detriment of their customers, we can expect confidence in them to drop even further.”

How sectors compare on ethics

Banking, Finance, Insurance

The 2018 Ethics Index

The Ethics Index 2018 survey of 1000 people was conducted across Australians between May 15 and June 7.

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