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Good ethics is simple: trust your compass

Author: ICAEW Insights

Published: 21 Sep 2023

Simon Mordant of Luminis Partners is a firm believer in following your morals. Do that, he says, and the rest will follow.

After qualifying as a chartered accountant at KPMG London and moving to a new role in Australia, Simon Mordant subsequently went into the investment banking sector, where he now works as Executive Co-Chairman and Co-Founder of Luminis Partners, in affiliation with Evercore. 

Alongside his banking work, he sits on the boards of several arts organisations around the world, such as MOMA PS1 in New York, the American Academy in Rome and the Tate International Council. This barely scratches the surface of the many non-executive roles he holds and has held.

“I’m a great believer that you’re on the planet for a short period of time, and each of us can leave the planet in a slightly better state than we found it,” he says. “I’ve really enjoyed being involved in community organisations, both intellectually and financially making a difference.”

Given this outlook, it’s perhaps unsurprising that Mordant has a strong sense of morals and ethics that he applies to his work. “I’ve always felt that it’s very simple: if you do the right thing, everything else follows.”

Your personal moral compass is one of the most important tools in your arsenal when it comes to professional ethical behaviour. We know when we’re doing the right thing, Mordant argues. While we might make excuses to try to justify unethical behaviour, deep down, we know that it’s wrong. 

“Transgressions are conscious. So if you always think, what’s the right answer? How should you treat people? How should you respond to a client issue? How should you behave yourself? I’ve always found it pretty straightforward.” 

If you’re in a trusted role, integrity is incredibly important, Mordant says. There are numerous examples where an individual’s inappropriate or unethical behaviour has ruined the reputation of an organisation. “Think of Enron and Arthur Andersen. Who could have ever imagined that a firm of the scale of Arthur Andersen could disappear? All because one partner clearly did the wrong thing.”

Unethical behaviour could be motivated by many factors, such as greed or ego. Mordant is very conscious of those motivating factors when it comes to embedding good ethics within his organisation. “Where I see inappropriate behaviour, I tend to try and analyse what’s causing it. It can usually be put into several buckets.” 

The first of these buckets is greed. Short-term compensation arrangements can unfortunately drive inappropriate behaviour, particularly at the senior level. “So many senior executive compensation schemes are based on earnings per share, enhancements and outperforming peers. Inevitably, there is a high risk that inappropriate behaviour can be motivated by that.” 

Ego is another, which may not occur as often in a financial context, but can play out in all sorts of scenarios in an office environment, from bad management to abusive behaviour and harassment.

The final common motivation can be stress; people under pressure can end up making unethical decisions as an attempt to release that pressure. Mordant believes this should not be considered an excuse or an acceptable reason for unethical behaviour, but it does warrant some understanding. 

“Leaders have to be empathic, I think that's incredibly important. Empathy should be part of the DNA of a leader. It doesn't mean that you accept something that's unacceptable. It may help you understand what has occurred, but being empathetic doesn't mean you should endorse inappropriate behaviour.”

In those cases, it’s important to determine whether that person has deliberately done something unethical, or whether they have made a mistake. “If you form a judgement that it is a genuine mistake, and the person is understanding of their situation and accepting that they’ve done something wrong, then short of it being an absolutely disastrous event, you give people a second go. But if they don’t listen, and the behaviour is repeated, you have to take very swift action.” 

Good ethics must start at the top, he explains, but to lead from the top is not enough. Everyone in the organisation needs to be responsible for managing and monitoring ethical standards. They also need to be comfortable calling out questionable behaviour. 

In Mordant’s business, not everyone is working the same hours, so it’s crucial to have mutual trust and buy-in to a consistent ethical approach, he explains. “If there is any inappropriate behaviour that occurs after a leader has left the office, they may not see it. If you just assume it’s led from the top and that’s sufficient, you’re missing a piece of the equation.” 

When something is flagged to leadership, action must be taken, no matter how difficult, or that culture of ethical behaviour will start to erode. “I’ve been in a position where we have had to remove senior people from our business who have behaved inappropriately. If you don’t do that, the inappropriate behaviour is deemed acceptable, and that challenges the values that you’re setting.”

It’s important to have open conversations about the values that matter to the organisation on a regular basis. Create forums where staff members can question and challenge those values where necessary, and where people can feel comfortable raising issues. That must include the option for one-on-one engagements, so that people who don’t want to raise something in an open forum can do so privately. 

Ultimately, it’s about ensuring that the entire organisation is focused on building a sustainable, long-term business, not on short-term wins, says Mordant. That is good business sense, he adds.

“The investment banks I’ve been involved with, particularly over the past 20-plus years, have been private businesses. So you can take a much longer-term view, doing the right thing by your clients and your team members. We have had many situations where we’ve advised clients not to do things, and the consequence of that is that we haven’t got the scale of fee that we might have done. But you recognise, firstly, your role as an adviser, and secondly, if you’re in this business for the long term, you do the right thing by the client.”

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