The hardly hidden truth was included in an Association press release which called on Brady Dougan, the chief executive of Credit Suisse, to apologise for insulting the Swiss banks employees.
Dougan, who was trying to explain to US legislators how Credit Suisse had stopped helping Americans escape taxes, said that some Swiss-based private bankers went to great lengths to disguise their bad conduct from Credit Suisse executive management. The claim, said the employees group, slighted the professionalism of the workforce. Besides, it was hardly credible.
That last statement is a little unfair. It makes excellent sense that some eager employees, anxious to bring in new business, and well aware that there was an official policy against aiding tax evasion, hid certain salient facts from their bosses. They knew that full disclosure would just get them into trouble, while bringing in new business would be rewarded, with few questions asked.
But if Dougan is right that the managers were totally ignorant, they hardly look good. After all, the commitment to change the old Swiss banking culturewhich asked so few questions that accounts bore numbers rather than nameshad started well before 2001, when Credit Suisse seriously began its efforts to clean up its relatively small US private banking operations.
Surely, bosses who were deadly serious about rooting out entrenched habits would have prodded, pried and even prosecuted to show that their institutions would henceforth compete on service, not on secrecy. Instead,
for many years they seem to have avoided looking too closely.
If Credit Suisse management was too relaxed about abandoning a flawed corporate culture, it had a lot of company. In almost every financial scandal of the last few yearsfrom rogue traders to organised money laundering, from false disclosures to the manipulation of key interest and exchange ratesinsiders who were truly interested could easily have found evidence that something was being done improperly. But in fact, attention was missing and action was scarce.
The explanation is simple. Employees knew they had little to gain from complaining about dubious behaviour because bosses were almost always less interested in morality than in earning high returns, retaining key employees and gaining ground against rivals.
In other words, ethical inertia was built into the corporate cultures. The Swiss bankers were generously rewarded for gaining new American customers through practices which they probably knew were incorrect. Their bosses, all the way to the top of the organisations, were even better rewarded for deciding not to ask questions which would probably have elicited uncomfortable answers.
Neither the Swiss bankers who broke American laws nor the bosses who did not notice were especially evil or foolish. Like most businessmen who go wrong, they were surely intelligent people quite capable of moral analysis. However, they chose to smother the voice of their consciences.
It is always a challenge to stay virtuous while pursuing legitimate personal and business objectives. Even in the noblest organisations, the desire to be fair to customers, suppliers and colleagues often pushes in the opposite direction from the pressure to succeed. The pressure to cut ethical corners is much greater in enterprises which have a well-established tradition or practice which is no longer considered acceptable.
It is all too easy for bosses and workers who silence their consciences to find plausible excuses. They can cite loyalty, obedience, industry standards and the need to support their families. The senior executives can also use the tools of bureaucracy, hiding behind shared responsibility and stated commitments to good policies.
Bad corporate behaviour is particularly hard to change. When bosses have condemned malpractice in words but rewarded it in deed, employees can be excused for not taking the latest pronouncements too seriously. Even if a few people are fired, consciences remain unheard while the remaining employees wait for a return to normal.
Equally, bosses who would not have risen up the hierarchy without finding ways to get around their stated ethical commitmentsgenerally without admitting that this is what they are doingwill struggle to learn new ways.
Knowledge is the first step to virtue. Despite the workers complaint, the Swiss bank employees and their employers seem finally to have admitted that something was deeply wrong with the way they used to work. If this effort at truth and moral reconciliation were repeated throughout the financial and business worlds, and backed up with firm judicial punishments, more consciences might start to be heard.