Finance firms top ethical concerns

AUSTRALIANS have a poor view of the ethical standards at large corporations and their top management, particularly in the banking and finance sector, research shows.

Executive pay is a top issue for most Australians, according to the results of an annual survey by the Governance Institute of Australia.

Respondents also flagged corruption, tax avoidance and misleading or deceptive advertising by companies as other major concerns. More than three-quarters of those polled said it was unethical for chief executives to be paid $3 million — about 50 times the average annual income in Australia.

More than 1000 people were polled for the study.

Most thought $300,000 was acceptable.

Executive salaries and bonuses were considered the top issues of ethical importance for the banking and finance sector, rating even higher than topical matters such as the treatment of customers and insufficient regulation.

Governance Institute of Australia chief Steven Burrell said the Federal Government’s announcement in May that regulators would be given power to oversee bank executives and their salaries had done little to arrest widespread concern about a lack of ethics and accountability.

The survey found sectors such as healthcare, education and charities had the highest ethical scores. On the other hand, large corporations, as well as the media and banking and finance sectors, had the lowest scores.

There was a pattern to Australians’ view of ethical behaviour, Mr Burrell said.

“They rank people they have the most personal contact with — GPs, pharmacists and the nearest local hospital — as the most ethical while those more distant are perceived as less ethical,” he said.

Survey respondents rated chief executives and directors as the most important “gatekeepers” influencing ethics in organisations.