Lesson 2 The Queue Number’

A prominent private banking customer, he had not taken a queue number ticker
But the next person (student) have the queue number who you should serve first

What do most people choose?

Most people will choose to serve Tan Sri Lim instead of the student.
Since the Bank’s Standard Operating Procedure is silent who to serve
in this circumstance, it is left to the Customer Service Officer (CSO) to
make her own decision. There are 3 alternatives.

- Principle or Duty Based

- Since there is a queue management system it is only right she serves
the student because she has a queue number ticket. In ethical
philosophy, this is called Deontology.
- Consequence Based
- Since the VIP customer is more profitable to the bank, it is only right
that she serves the VIP customer than the low valued student. In
ethical philosophy, this is called Teleology.
- Character-Based
- Character-Based – The CSO wants to be fair to both customers.
However, she may not want to offend the VIP customer of the banks -
Tan Sri Lim. She may try to get another colleague to help serve VIP
Tan Sri Lim. In the event that no one is available, she may politely
inform the VIP that she is shorthanded and will serve the VIP
immediately after serving the student. In ethical philosophy, this is
called Virtue.

Lesson 3 - Ethics

Ethics is the body of principles used to decide what behaviours are right, good, and
proper.

- Such principles (ethics) do not always dictate a single "moral" course

of action but provide a means of evaluating and deciding among
competing options.
- Ethics is about putting principles into action. Consistency between
what we say we value and what our actions say we value is a matter of
integrity.
What Define an Ethical Person?

An ethical person often chooses to do more than the law requires and less
than the law allows
Ethics is also about self-restraint, i.e., what we should not do:

1. Not doing what you have the POWER to do. An act isn’t proper simply
because it is permissible or you can get away with it.
2. Not doing what you have the RIGHT to do. There is a big difference
between what you have the right to do and what is right to do.
3. Not doing what you WANT to do. There is a big difference between
what you want to do and what is ethical to do.

In other word
“ Ethics is the rules for deciding correct conduct’

Moral Vs Ethics
- moral
- is a noun, and it’s actually from the Greek word mos, meaning “custom”.
- These are the ideas we believe about right and wrong. This could look like
honesty, compassion and understanding.
- Concepts and customs we have to help us be good people. But, we don’t
have to do them.
- Ethics
- comes from the Greek word etnikos,meaning “character.”
- Ethics describes behavior that is right or wrong.
- So depending on the rules of the situation our ethics determine our actions.
- This could look like an “eye for an eye”.
- Following the guidelines of a contract, your parents rules, or government
laws.
- These are the action you do to not get in trouble.

Hypothetically speaking,
when i joined the army, i was conflicted because i belived that killing was morally wrong. But,
the army’s ethical code includes military strategy about taking lives for the sake of the
mission. This conflict showed me that morals don’t have to be ethical, and ethics don’t have
to be moral. And that is com;ocated.
Ethics and morals relate to "right" and "wrong" conduct. While they are sometimes used
interchangeably, they are different.
1. Ethics and morals relate to "right" and "wrong" conduct.
2. While they are sometimes used interchangeably, they are
different.

Moral & Business Ethics.

Moral
- One’s own personal sense of right and wrong. It is not imposed by anyone.
- Heavily influenced by family, cultural, religious believes (internal).
- Own moral standards - It is what you think about right and wrong - one’s
judgments.
Business Ethics
- Rules provided to an individual by an external source, e.g., codes of conduct
in the bank.
- Governed by professional and legal guidelines (external).
- Deals with the creation and application of moral standards in the business
world.

Sometimes Moral may clash with Business/Professional Ethics:

A lawyer may morally hate criminals but his professional code of ethics requires him
to provide the best defense.

SORT EACH VALUE INTO THE CORRECT BOX

Moral
- Understanding
- Sincerity
- Compassion

Business ethics
- Confidentiality
- Time Management
- Integrity

Lesson 5 - deciding what is right!

An ethical dilemma is a situation in which two or more “right” values are in conflict.
For example – in the thought experiment, should the Customer Service Officer serve
the VIP or the student?

There are generally two approaches to deciding what is right in an ethical dilemma.
Approach 1
–

The philosophical approach focus on prescriptive or normative ethical

theories such as Deontology, Teleology & Virtue that are designed to help the
individual decide what they should do in response to ethical dilemmas - to discuss
in Module 3.

Approach 2
–

The psychological approach which focuses on what people actually do when

faced with an ethical dilemma such as Lawrence Kohlberg's theory of Cognitive
Moral Development - to discuss in Module 3.

Ethical behavior and management

What is Ethical Behaviour and Management?

1. Ethical behaviour in business is behaviour that is consistent with the

principles and standards of business practices that society accepts as
good and right.

2. Management identifies appropriate or inappropriate behaviour (or

conduct) and communicates their expectations to employees through
a code of conduct, ethical training programmes, and ethical
managerial leadership.

Ethical decisions by employees are influenced by individual and organisational

factors.

"The Deputy Governor said the ethical challenge for

leaders is designing situations that encourage
continuous ethical behaviour in people."
Lesson 6 - Strengthening Conduct and Culture in The Financial Industry

"Keeping to the highest standards of ethics and integrity is part of being

professional" - Bank Negara Malaysia

Nor Shamsiah Mohd Yunus.

(Governor of Bank Negara Malaysia.)

BNM has adopted a 2 pronged approach to influence the conduct of

individuals within the financial sector

1. Organisational Factor -Cultivate a code of conduct that promotes

honesty and integrity.
2. Individual Factor - Hiring of individual with integrity (Pre-
screening of hire)

"The Deputy Governor said the ethical

challenge for leaders is designing situations
that encourage continuous ethical behaviour
in people."

Shaik Abdul Rasheed Abdul Ghaffour.

(Deputy Governor, Bank Negara Malaysia.)

24th April 2017

Transparency framework for enforcement actions:-

1. Remuneration - influencing behaviour

2. Attitudes towards speaking-up – clear and robust whistleblowing
arrangements
Lesson 7 - Banker or Bankster?

The economist call us Bankster!

THE ECONOMIST

In 2008, prior to the global financial crisis, the bankers took every

opportunity they can to boost their KPIs. In some instances, many of them

were unscrupulous which causes many to go bankrupt.

However, these unscrupulous were not brought to justice even though they

cause millions of people to suffer during the global financial crisis.

THIS IS BECAUSE OF THE BANKER’S ACTION WAS MOSTLY LEGAL BUT

UNETHICAL!!

So, does being legal makes you an ethical person? Not necessary. It's not a
definite NO. Therefore, ETHICS deals with the situation that you are still legal
but unethical.

MOVICE TIME

THE BIG SHORT - 2015 Movie

This movie is based on a true story showing how the financial crisis of
2007–2008 was triggered by the United States housing bubble where a
group of wily opportunists makes a fortune off of the U.S. economic crash
by sniffing out the situation in advance and betting against the banks.
Lesson 8 - Relationship: Ethics and The Law

How to Define Ethics and Law?

1. Law reflects society’s MINIMUM norms and standards of business

conduct.
2. There is a great deal of OVERLAP between what’s legal & what’s
ethical.
3. Law-abiding behavior is generally believed to also be ethical.
4. There are many particular situations not covered strictly by law that
fall under the umbrella of “ethical dilemmas.” - the GREY AREA.
5. An Ethical Dilemma arises in a situation when each alternative
choice or behavior is undesirable because of potentially harmful
ethical consequences. Right or wrong cannot be clearly identified.

Grey Area
What is The Grey Area?
● Business ethics can be said to begin when the law ends.
● Not all ethical issues are covered by the law - for example, there is no
rule about cheating on your boyfriend/girlfriend but it is considered
morally wrong.
● Not all legal issues are ethical - for example, the law prescribes whether
we should drive to the right or left side of the road, but it is not an
ethical decision.
● Not always a 'right answer': the grey areas of business ethics.

What are the common reasons for unethical behaviour?

Drag the card to the respective behaviour (unethical/ethical
behaviour):

Reasons for UNETHICAL behavior

- Pressure to meet set target (KPIs)
- Misguided loyalty
- Self interest/freed ambition
- Do not care about ethical values
- Fear (need to feed family)

Reason for ETHICAL behavior

- Integrity
- Fairness
Lesson 9 - case studies: Australian Banks and LIBOR Scandal

Scandal-hit Australian banks earmark billions to repay customers -

2nd May 2019

A year-long investigation by Royal Commission

exposed rampant bank malpractice:
1. Charging fees to dead people;
2. Charging fees for no services at all;
3. Aggressive selling tactics, and;
4. Poor advice that led to significant financial upheaval for clients.

The LIBOR Scandal Explained in One Simple Infographic

MALAYSIAN 1-CENT THIEF

Instead of saving up his own money, he STOLE money from other people,

little by little, until he became a MILLIONAIRE!

EVENT

1. Aman Shah headed Hock Hua bank’s money market processing

department.
2. Given authority to transmit the message for transfer of funds
through SPEEDS for up to RM50 million.
3. Instructed staff to transfer funds to his own account at another
bank -amount transferred RM4.01 mil.
4. Manipulated accounting entries to cover up transfers.
5. He then bought a total of 6 supercars including Lamborghini,
Mercedes Benz, Porsche & BMW.

How he was caught?

Aman boasted about his cars and was interviewed by a local TV show.

His ex-boss in Hock Hua bank watched the TV show and raised suspicious

about how his former employee with an RM1,800.00 salary could afford to

have a collection of supercars.

Do Not Hesitate to Challenge Unfair Contracts, Says Couple Who Won CIMB
Case
What really happens in this case? Click each card to learn more.

- 2015
 The Bourkes sued a Malaysian Bank for negligence & breach of
contract.
- 2016
High Court dismissed the suit. The exclusion liability clause protected
the Bank from being sued for damages.
- 2018
Court of appeal: “The bank was liable for breach of contract”

Commercial banks could not rely on exclusion clauses in

agreements to stop their clients from suing them for
negligence. It is patent unfairness and injustice to the
customers
- Federal Court

Lawyer Ong

"Today’s ruling meant that the court had removed the ‘bulletproof vest”
of banks that prevented clients from filing suits on equal ground"

Skrine: Federal Court Invalidates Exclusion of Damages Clause

On 17 December 2018, the Federal Court in CIMB Bank Berhad v Anthony Lawrence
Bourke and Alison Deborah Essex Bourke (Federal Court Civil Appeal No. 02-105-
10/2017(W)) held that an exclusion clause in a loan agreement was void and
unenforceable as it was an agreement in restraint of legal proceedings under section 29
of the Contracts Act 1950 (‘the Act’) and was also contrary to public policy.