October 16, 2023 • 21 mins
Global Ethics Day is an opportunity to pause and reflect on the importance of ethics in the daily work of accountants and its role in maintaining public trust in the profession more broadly. This episode examines what behaving with integrity and ethical intent looks like – and how ethics underpins the Chartered Accountant designation. We explore the trusted relationship between CA and client, the benefits of trust, what damages trust, the professional fall out when it’s broken and how your membership body is helping.
Host Gillian Bowen interviews:
- Dr Lisa Marriott FCA, School of Accounting and Commercial Law at Victoria University of Wellington and an Extraordinary Professor at the University of Pretoria in South Africa
- Geraldine Magarey FCA, CA ANZ General Manager for International Development
Check out our new hub created especially for Global Ethics Day. Details about the complimentary micro course – Conflicts of Interest – can be found there as well as our new Trust CPD course, which has just launched.
CA Advisory Group Episode: How to get help with ethical dilemmas
Information on the Member Vote
Check out the CA Library
Useful Harvard Business School resources available in the CA Library
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Gillian Bowen, Host (00:08):
Hello, my name is Gillian Bowen, the Australian manager of
Public Affairs at Chartered Accountants ANZ. This is Small Firm,
Big Impact.
Geraldine Magarey FCA (00:21):
It is based on a huge amount of trust in
each other, so it's actually a two way relationship. Actually,
we need to think about it's not just about clients
trusting us as a professional, it's actually us trusting the
client as well. If either one of the parties breaches
that trust or breaks that trust, it takes a long
time to be able to rebuild it.
Dr Lisa Marriott FCA (00:42):
Companies that are trusted have higher revenues, higher profitability, higher
shareholder returns, and lower employee turnover.
Because trust increases commitment to an organization, it's actually much
easier to be honest and ethical.
Geraldine Magarey FCA (00:54):
All professions are built on trust, and for chartered accountants,
it really is the cornerstone of our profession.
Gillian Bowen, Host (01:09):
It's the podcast giving you and your clients the up
to date information you need to do your jobs. Each episode,
I share resources, tools, and expert advice provided by CA ANZ
and a range of people across our profession. So make
sure you're following the pod in your favourite pod app.
And if you've got an idea for the show, email
podcast@charteredaccountantsanz.com Today we have Dr. Lisa Marriott. She's a Professor
(01:40):
at the School of Accounting and Commercial Law of Victoria
University of Wellington, and an extraordinary professor at the University
of Pretoria in South Africa. She's been working in academia
for the past 15 years, and prior to that was
a financial controller and accountant in the private sector. She's
a published author and helped with the CA ANZ thought leadership article,
The Future of Trust
(02:04):
We also have with us another author of that paper,
CA ANZ General Manager for International Development Geraldine Magarey, FCA.
At the time, she was our thought leadership and research leader.
Geraldine had a background in audit and regulation prior to
joining CA ANZ. I'm very excited to have both of you
(02:24):
on this episode. Welcome to Small Firm, Big Impact.
Dr Lisa Marriott FCA (02:28):
Thanks, Gillian. I'm delighted to be here and really looking
forward to our conversation.
Geraldine Magarey FCA (02:33):
Yeah. Thanks, Gill. Great to join you and Lisa today.
Gillian Bowen, Host (02:37):
If you're listening to this episode on the day it's dropped,
it won't surprise you - it's Global Ethics Day. It's why
we're diving into the topic of trust, why it's important for professionals,
for chartered accountants. Big question right off the top, Lisa.
What is trust?
Dr Lisa Marriott FCA (02:54):
And great place to start. So at its simplest, trust
is when we rely on another party to behave in
a certain way. So in any relationship there's a couple
of things going on. There's dependence on the other party
to do what they're going to do, what they will,
(03:14):
what you've agreed that they will do. But there's also
uncertainty about how that other party will behave. And then,
of course, trust gets broken when that other party doesn't
behave as expected in that interdependent relationship. And of course,
that holds for all of our relationships, our personal relationships
and our professional relationships.
Gillian Bowen, Host (03:37):
Geraldine, why take the time to understand what trust means?
I mean, I guess in the sense of why talk
about this on a day like Global Ethics Day?
Geraldine Magarey FCA (03:46):
Look, it's super important, Gill. As we know, all professions
are built on trust. And for chartered accountants, it really
is the cornerstone of our profession. But more importantly, just
like to add from our research, we actually found there
is a trust gap between what the perceived factors for
improving trust. So it's actually really important to understand and
(04:07):
not just to think about it just being a sort
of a given. So it's really a really important thing
to to get right. If we want to have good
relationships with our clients, with our community and with our employees.
Gillian Bowen, Host (04:19):
What do you mean by gap? Can you explain that
to me? What what is the gap?
Geraldine Magarey FCA (04:23):
Yeah. In the research, we actually found that the actual
perceived factors for improving trust, what we might have thought
they were, they're actually different to what people perceive trust
as being from a client perspective. So I'll give you
an example. So one of them was around data security.
So as a um, you know, if we're working with
(04:45):
our clients, we might not think of data security being
super important to our clients. It is important. But is
it the top factor when it comes to building that
trust with our client? So when we actually were doing
the survey, 10% of our members said data security was
a key trust factor. But when we actually asked the
(05:05):
other side the clients, it was actually one of the
very top trust factors. So there was that gap between
what we perceived as a trust factor and as a top,
top three, and what the client was saying was a
trust factor in their top three.
Gillian Bowen, Host (05:19):
Mm.
Lisa, how do you get that understanding? How can you
make sure that you're drilling down into what it is
that makes the relationship between you as a professional and
your client trustworthy?
Dr Lisa Marriott FCA (05:31):
That's a really good question.
And I'm going to just follow on from what Geraldine
was saying. And with the research that we looked at, um,
the trust has changed. And of course, everything is evolving.
But what we found in that research is that the fundamentals,
the basics are actually pretty solid. We we want to
(05:57):
engage with those who are ethical and those who are honest.
And the survey respondents were really clear on this, and
it was dishonesty and unethical behavior that was likely to
sort of decrease trust across the board. And that didn't
really matter whether you were a professional or whether you're
in some other industry or public sector or media or
(06:18):
whatever it was, behaving unethically and being dishonest were those
factors that really mattered most to people.
Gillian Bowen, Host (06:27):
Geraldine, do you think the participants in in the survey
and I guess professionals in general understand what behaving ethically means
and what behaving with integrity means?
Geraldine Magarey FCA (06:39):
I do but think we do need to remind ourselves,
you know, every now and then, about what it truly
does mean. Think sometimes we can because all of us
come to our roles. All chartered accounts come to this,
you know, with that mindset of acting with integrity, acting
with honesty, being ethical. But as a regulator, I've seen sometimes,
(06:59):
you know, when we're busy, you're stressed, um, or, you know,
sometimes you might take a shortcut. We don't mean to
go down that path. And so think just having that
reminder of, of of what it truly does mean to
be ethical, to act with integrity and to be honest,
which are the real values that help build trust. It
is really important for us to just to revisit and
(07:20):
to check in regularly around those, those factors.
Gillian Bowen, Host (07:24):
Um, there is a focus on the profession's ethics and
integrity right now, where the behaviours of a few can
cast a long shadow. And this isn't the first time,
and it won't be the last time. And to take
the name of the research paper and turn it into
a question, Lisa, what is the future of trust?
Dr Lisa Marriott FCA (07:43):
Yeah. So I think at least, um, part of this
is it's really thinking about the way we work and the,
the way we engage with others. So, you know, don't
need to tell anybody that our work practices are changing
and everything's moving quite quickly. And of course, then we
got Covid coming along and things changed even more rapidly. Um,
(08:06):
you know, probably go back to our research and talk
about one of the things that came out of that was,
you know, these days we tend to have a bit
less face to face contact with people in a lot
of situations. But what we saw out of that research
was that people trusted their accountants and the work that
their accountant produced more when they had more of a
(08:28):
connection with that accountant. When you have those strong professional relationships,
that's really going to help build those future trusting relationships
and face to face contact is part of that. One
of our conclusions in the report was to not let
technology get in the way of those face to face
business relationships, because they're still really important, even as the
(08:52):
way we do business actually changes.
Gillian Bowen, Host (08:55):
What did you want to add into that, Geraldine, on
the future of of the trust and build on what
Lisa's brought up there?
Geraldine Magarey FCA (09:01):
Yeah, interesting enough just on that that technology piece. So
face to face is important. But we also talked about,
you know, we've got the tools have got now with
you know, teams or zoom etcetera. We've actually got that
ability to see each other. So although we might not
be there in the physical sense, but you know, it's
really important to make sure, you know, you do fundamentals,
(09:21):
turn the camera on. And you know, being able to
you can develop rapport and trust, you know, by being
able to read people's body languages. We know it's very
important about, you know, a lot of the messages we
convey are not just from our words, but from how
we present ourselves and our body language. So having the
camera on. So the future of trust. Yes, it is
those really old fashioned values that we talk about in
(09:44):
terms of relationships that we can get around some of
those technology things, like with the camera. But one of
the biggest things that came out of it is actually
suppose back to the future. But and that was really
honesty is really the number one and it's actually key.
It might sound a bit old fashioned, but it mattered
the most to our survey respondents when we did that research.
Gillian Bowen, Host (10:04):
And does that. That might tie into my next question.
I wanted to ask about what damages trust? I mean, honesty,
I think the perhaps two parts of it, one obviously
being transparent about how you operate and what you do.
But if you did make a mistake, what role does
being honest about the mistake play? Lisa, what do you
think about that?
Dr Lisa Marriott FCA (10:26):
Oh it is crucial. Absolutely crucial. I mean, you can
do a well, you can do a lot of damage
to your trusting relationships by having problems, but actually you
can also do some good if you do the right
thing and you resolve those appropriately. So resolving them appropriately
generally means owning those mistakes. We all make mistakes, you know,
(10:49):
you have to own it, not blame others apologizing if
you get something wrong that goes a really long way
as well and really important. You've got you've got to
fix it. If you've done something wrong, if it's all
gone astray, then it's it's your job to fix that.
And by actually by fixing things really well, you can
almost end up in a better situation because you've you've
(11:11):
shown your clients or you're working partners actually, that you
can be trusted if things go wrong to resolve them.
And that's just as important, I think.
Gillian Bowen, Host (11:21):
Geraldine, what do you think the impact is of breaching
or breaking trust between a professional and a client?
Geraldine Magarey FCA (11:32):
Well, it can have, you know, massive repercussion repercussions. But
as Lisa has just pointed out, you know, you can
get it back, but it can take a long time
to get back. So, you know, the way we work
with our clients there is it is based on a
huge amount of trust in each other. So it's actually
a two way relationship. Actually. We need to think about
it's not just about clients trusting us as a professional,
(11:55):
it's actually us trusting the client as well. So that
two way trust is super important to to think about
in this, in this relationship. But if either one of
the parties breaches that trust or breaks that trust, it
takes a long time to be able to rebuild it.
And the things that Lisa said, you know, around the apology, around,
you know, showing you can fix it, you know, bringing
that track record back in and, you know, keeping things
(12:19):
on track, not making any other errors. Um, you know,
it's really just that long road to rebuilding it, but
it can be rebuilt. But if we don't rebuild it, um,
it's it's basically probably the very hard to have that
professional relationship. Yeah. To come back from it.
Gillian Bowen, Host (12:36):
Yes. Yes.
Dr Lisa Marriott FCA (12:37):
So I'm sorry. You go. Yep. There's just to pick
up on what Geraldine was saying there. There are a
couple of authors who work in the Harvard Business School,
and they say pretty much almost an identical comment to
which Geraldine just made, which is it takes a sustained
history of right. And that's arrived to wipe out one wrong.
(12:59):
So it is it's much more important to, to really
get things right, if you possibly can. There's also a
really interesting statistic, and I wouldn't necessarily say this is 100%
to be relied on and repeated and quoted, but they
have a statistic that suggests that a company can lose
(13:21):
around about 30% of its value in the short term
when it loses trust. And as I say, that's I'm
sure that's a highly variable statistic, but it is an
indication of the real impact, financial impact that can can
occur when trust is damaged.
Gillian Bowen, Host (13:39):
I think now's a good time to then pivot to, um,
you know, some of the preventative measures. We've talked about
the importance of integrity and, and honesty and having that.
But I'm thinking, Geraldine, what are the benefits? For example,
if you're part of a professional body like CA ANZ, what
does being part of a professional body help you with?
Geraldine Magarey FCA (14:01):
We at the end of the day, we are, you know,
we are a community of professionals. The CA ANZ itself provides
a number of of not just tools but, you know,
access to people and resources. So I'll just give you
a little bit of a couple of examples if that's okay.
So you know, obviously even our research paper, so the
research paper itself was a was a, it wasn't just,
you know, some sort of interesting set of research. You know,
(14:23):
it really came back with, you know, a set of um,
sort of, you know, six things to sort of think about.
So there's, you know, there's the research papers will give you,
you know, some, some ideas and suggestions around how you
might like to, to approach trust. We've got things like
ethics training, which is actually mandatory as being part of
a being a chartered accountant. We have courses actually on trust,
(14:47):
which again, important to, um, you know, to be aware of. And,
and one of the my favourite resources. And we are very,
very indebted to these members and lucky to have is
our Chartered Accountants Advisory Group, which are a group of
our members who very generously give their time to help
their fellow members around difficult situations. So it's exactly these
sorts of things about, you know, when you've got an
(15:09):
issue or it might be a conflict or something in
there that you know, around ethics or that you just
need to talk to. It's someone who is independent of you,
independent of the situation, who has vast experience. And, you know,
you can actually talk through that dilemma with them. And,
you know, to me, that is one of the most
fantastic things we have and offering our members. So we
(15:30):
there's a lot of benefits to being, you know, part
of that, part of the professional body and part of
something that we all face these issues during our time
as chartered accountants and during our careers. So it just
gives access to those, you know, to people and resources
to be able to talk through those issues.
Gillian Bowen, Host (15:46):
Um, there's a couple of good takeaways from there, which
I'll give some some wrap up when we finish in
a couple of minutes time. And that includes the fact
that we have done an episode for you on this
podcast series about the advisory group, or as we call it,
two of our CAAG professionals are on it, one from Australia,
one from New Zealand. It's really interesting picking their brain
and understanding how that works. I'll put a link to
(16:06):
that in the show, notes. Lisa. Before we before we
wrap up, I'll get a final thought from both of
you in a in a tick. I also wanted to
just ask a quick question about what role does deterrence play?
And I'm thinking in the sense of obviously for chartered
accountants there is a disciplinary framework, but there'd be lots
of professional organisations who operate with a disciplinary framework. What
(16:28):
role does deterrence play in ensuring trust is upheld?
Dr Lisa Marriott FCA (16:31):
Yeah, I think it does play a pretty important role.
And it's quite good actually, that our disciplinary framework is
reasonably public, because what that does is it does signal
to other members and our clients and potential clients that
the profession does take any sort of non-compliance quite seriously.
And then what that does is that builds trust across
the broader profession, and everybody benefits.
Gillian Bowen, Host (16:55):
Fantastic.
Geraldine Magarey FCA (16:56):
Could I add into that Gill? Sorry.
Gillian Bowen, Host (16:57):
Of course. Go for it.
Geraldine Magarey FCA (16:58):
So there's two aspects obviously to deterrence. It's obviously that
individual side, the accountability and repercussions. But it's actually super
important that deterrence actually at the beginning of a trust relationship.
Because if we don't know our clients, they come to
us often because we are a chartered accountant. So there's
that trust in the designation. It's a shortcut in a way.
It signals that to our clients we've got a high
level of training. We've got we've demonstrated our competence. We've
(17:21):
passed demanding exams. We have a code of ethics, we
have professional standards, and we abide by disciplinary process. So
all of that builds trust in our designation, which helps
in that initial interaction with the new client.
Gillian Bowen, Host (17:34):
Absolutely. Look, that is a great way to bring together
the discussion and that it is Global Ethics Day, as
I mentioned at the start of the show. So on
that theme, I wanted to let everyone listening know that
CA ANZ has created a dedicated global ethics hub on our website,
which links to a wide range of resources, and I'll
put a link to that in the show notes. And
(17:55):
we're also making Micro Course three, which is called Conflicts
of Interest available to all members for free until the
end of October, so details on how to access access
that course can also be found on that Global Ethics
Hub page on the website. And to coincide with the
18th of October, we're launching a new trust CPD course,
(18:17):
which will be available, and I'll put the link to
that in the show notes. I will put a link
to the episode on the Chartered Accounts Advisory Group or
CAAG that Geraldine was just mentioning, which is called How
to Get Help with Ethical Dilemmas. Very topical and key.
And if you are listening to this on the 18th
of October, I will not miss an opportunity to let
you all know that there are still two days to
(18:38):
vote in our member vote to further strengthen the Professional
Conduct framework, so eligible members would have received an email
from electionz.com, which is the independent voting provider who's running
the vote. And if you can't find it, have a
look in your junk or spam folder. That email has
your unique Pin and the link to get into the
voting platform. We want our members to be involved in
(18:59):
this important process. If you haven't voted, please do. All
the information is in the voting platform and also available
on our website. Voting closes on the 20th of October
and the 20th of October is also the day of
our AGM. Gosh, come along to that too. I'm plugging
things left, right and centre. Why not? Lisa and Geraldinea
final thought before we go. Lisa you first.
Dr Lisa Marriott FCA (19:22):
Fantastic. Thanks. I would just like to close by saying that,
you know, research has shown that there are just enormous
benefits associated with being trustworthy. So very quickly companies that
are trusted have higher revenues, higher profitability, higher shareholder returns
and lower employee turnover because trust increases commitment to an organisation.
(19:43):
So those are all great things to have. It's actually
much easier to be honest and ethical and reap the
gains that come with that. And you know, of course
it is just the right thing to do as well.
Gillian Bowen, Host (19:55):
Geraldine, all good points there. What else?
Geraldine Magarey FCA (19:57):
Yeah, three things for me. I would just say, you
know honesty is key. So never forget that. Also be
mindful of that trust gap that I referred to early on.
And in the in the age of, you know, A.I. , internet,
fake news etcetera, etcetera that are leverage your expertise because
your the expertise you have is super important to building
(20:21):
and maintaining trust in the current world.
Gillian Bowen, Host (20:23):
I love that leverage your expertise. What a great message.
That is all we have time for. If you want
to find out more, head to the Global Ethics Hub,
which I've mentioned. There's a link in the show notes. Also,
give the podcast a follow and we have an email.
So get in touch podcast@charterdaccountantsanz.com Let's start a conversation. Thank you.
Lisa Marriott and Geraldine Magarey, FCA for being my experts
(20:45):
on Small Firm, Big Impact.
Geraldine Magarey FCA (20:48):
Thanks, Gill.
Dr Lisa Marriott FCA (20:49):
Thank you.
Gillian Bowen, Host (20:50):
Bye bye.
Hello, my name is Gillian Bowen, the Australian manager of
Public Affairs at Chartered Accountants ANZ. This is Small Firm,
Big Impact.
Geraldine Magarey FCA (00:21):
It is based on a huge amount of trust in
each other, so it's actually a two way relationship. Actually,
we need to think about it's not just about clients
trusting us as a professional, it's actually us trusting the
client as well. If either one of the parties breaches
that trust or breaks that trust, it takes a long
time to be able to rebuild it.
Dr Lisa Marriott FCA (00:42):
Companies that are trusted have higher revenues, higher profitability, higher
shareholder returns, and lower employee turnover.
Because trust increases commitment to an organization, it's actually much
easier to be honest and ethical.
Geraldine Magarey FCA (00:54):
All professions are built on trust, and for chartered accountants,
it really is the cornerstone of our profession.
Gillian Bowen, Host (01:09):
It's the podcast giving you and your clients the up
to date information you need to do your jobs. Each episode,
I share resources, tools, and expert advice provided by CA ANZ
and a range of people across our profession. So make
sure you're following the pod in your favourite pod app.
And if you've got an idea for the show, email
podcast@charteredaccountantsanz.com Today we have Dr. Lisa Marriott. She's a Professor
(01:40):
at the School of Accounting and Commercial Law of Victoria
University of Wellington, and an extraordinary professor at the University
of Pretoria in South Africa. She's been working in academia
for the past 15 years, and prior to that was
a financial controller and accountant in the private sector. She's
a published author and helped with the CA ANZ thought leadership article,
The Future of Trust
(02:04):
We also have with us another author of that paper,
CA ANZ General Manager for International Development Geraldine Magarey, FCA.
At the time, she was our thought leadership and research leader.
Geraldine had a background in audit and regulation prior to
joining CA ANZ. I'm very excited to have both of you
(02:24):
on this episode. Welcome to Small Firm, Big Impact.
Dr Lisa Marriott FCA (02:28):
Thanks, Gillian. I'm delighted to be here and really looking
forward to our conversation.
Geraldine Magarey FCA (02:33):
Yeah. Thanks, Gill. Great to join you and Lisa today.
Gillian Bowen, Host (02:37):
If you're listening to this episode on the day it's dropped,
it won't surprise you - it's Global Ethics Day. It's why
we're diving into the topic of trust, why it's important for professionals,
for chartered accountants. Big question right off the top, Lisa.
What is trust?
Dr Lisa Marriott FCA (02:54):
And great place to start. So at its simplest, trust
is when we rely on another party to behave in
a certain way. So in any relationship there's a couple
of things going on. There's dependence on the other party
to do what they're going to do, what they will,
(03:14):
what you've agreed that they will do. But there's also
uncertainty about how that other party will behave. And then,
of course, trust gets broken when that other party doesn't
behave as expected in that interdependent relationship. And of course,
that holds for all of our relationships, our personal relationships
and our professional relationships.
Gillian Bowen, Host (03:37):
Geraldine, why take the time to understand what trust means?
I mean, I guess in the sense of why talk
about this on a day like Global Ethics Day?
Geraldine Magarey FCA (03:46):
Look, it's super important, Gill. As we know, all professions
are built on trust. And for chartered accountants, it really
is the cornerstone of our profession. But more importantly, just
like to add from our research, we actually found there
is a trust gap between what the perceived factors for
improving trust. So it's actually really important to understand and
(04:07):
not just to think about it just being a sort
of a given. So it's really a really important thing
to to get right. If we want to have good
relationships with our clients, with our community and with our employees.
Gillian Bowen, Host (04:19):
What do you mean by gap? Can you explain that
to me? What what is the gap?
Geraldine Magarey FCA (04:23):
Yeah. In the research, we actually found that the actual
perceived factors for improving trust, what we might have thought
they were, they're actually different to what people perceive trust
as being from a client perspective. So I'll give you
an example. So one of them was around data security.
So as a um, you know, if we're working with
(04:45):
our clients, we might not think of data security being
super important to our clients. It is important. But is
it the top factor when it comes to building that
trust with our client? So when we actually were doing
the survey, 10% of our members said data security was
a key trust factor. But when we actually asked the
(05:05):
other side the clients, it was actually one of the
very top trust factors. So there was that gap between
what we perceived as a trust factor and as a top,
top three, and what the client was saying was a
trust factor in their top three.
Gillian Bowen, Host (05:19):
Mm.
Lisa, how do you get that understanding? How can you
make sure that you're drilling down into what it is
that makes the relationship between you as a professional and
your client trustworthy?
Dr Lisa Marriott FCA (05:31):
That's a really good question.
And I'm going to just follow on from what Geraldine
was saying. And with the research that we looked at, um,
the trust has changed. And of course, everything is evolving.
But what we found in that research is that the fundamentals,
the basics are actually pretty solid. We we want to
(05:57):
engage with those who are ethical and those who are honest.
And the survey respondents were really clear on this, and
it was dishonesty and unethical behavior that was likely to
sort of decrease trust across the board. And that didn't
really matter whether you were a professional or whether you're
in some other industry or public sector or media or
(06:18):
whatever it was, behaving unethically and being dishonest were those
factors that really mattered most to people.
Gillian Bowen, Host (06:27):
Geraldine, do you think the participants in in the survey
and I guess professionals in general understand what behaving ethically means
and what behaving with integrity means?
Geraldine Magarey FCA (06:39):
I do but think we do need to remind ourselves,
you know, every now and then, about what it truly
does mean. Think sometimes we can because all of us
come to our roles. All chartered accounts come to this,
you know, with that mindset of acting with integrity, acting
with honesty, being ethical. But as a regulator, I've seen sometimes,
(06:59):
you know, when we're busy, you're stressed, um, or, you know,
sometimes you might take a shortcut. We don't mean to
go down that path. And so think just having that
reminder of, of of what it truly does mean to
be ethical, to act with integrity and to be honest,
which are the real values that help build trust. It
is really important for us to just to revisit and
(07:20):
to check in regularly around those, those factors.
Gillian Bowen, Host (07:24):
Um, there is a focus on the profession's ethics and
integrity right now, where the behaviours of a few can
cast a long shadow. And this isn't the first time,
and it won't be the last time. And to take
the name of the research paper and turn it into
a question, Lisa, what is the future of trust?
Dr Lisa Marriott FCA (07:43):
Yeah. So I think at least, um, part of this
is it's really thinking about the way we work and the,
the way we engage with others. So, you know, don't
need to tell anybody that our work practices are changing
and everything's moving quite quickly. And of course, then we
got Covid coming along and things changed even more rapidly. Um,
(08:06):
you know, probably go back to our research and talk
about one of the things that came out of that was,
you know, these days we tend to have a bit
less face to face contact with people in a lot
of situations. But what we saw out of that research
was that people trusted their accountants and the work that
their accountant produced more when they had more of a
(08:28):
connection with that accountant. When you have those strong professional relationships,
that's really going to help build those future trusting relationships
and face to face contact is part of that. One
of our conclusions in the report was to not let
technology get in the way of those face to face
business relationships, because they're still really important, even as the
(08:52):
way we do business actually changes.
Gillian Bowen, Host (08:55):
What did you want to add into that, Geraldine, on
the future of of the trust and build on what
Lisa's brought up there?
Geraldine Magarey FCA (09:01):
Yeah, interesting enough just on that that technology piece. So
face to face is important. But we also talked about,
you know, we've got the tools have got now with
you know, teams or zoom etcetera. We've actually got that
ability to see each other. So although we might not
be there in the physical sense, but you know, it's
really important to make sure, you know, you do fundamentals,
(09:21):
turn the camera on. And you know, being able to
you can develop rapport and trust, you know, by being
able to read people's body languages. We know it's very
important about, you know, a lot of the messages we
convey are not just from our words, but from how
we present ourselves and our body language. So having the
camera on. So the future of trust. Yes, it is
those really old fashioned values that we talk about in
(09:44):
terms of relationships that we can get around some of
those technology things, like with the camera. But one of
the biggest things that came out of it is actually
suppose back to the future. But and that was really
honesty is really the number one and it's actually key.
It might sound a bit old fashioned, but it mattered
the most to our survey respondents when we did that research.
Gillian Bowen, Host (10:04):
And does that. That might tie into my next question.
I wanted to ask about what damages trust? I mean, honesty,
I think the perhaps two parts of it, one obviously
being transparent about how you operate and what you do.
But if you did make a mistake, what role does
being honest about the mistake play? Lisa, what do you
think about that?
Dr Lisa Marriott FCA (10:26):
Oh it is crucial. Absolutely crucial. I mean, you can
do a well, you can do a lot of damage
to your trusting relationships by having problems, but actually you
can also do some good if you do the right
thing and you resolve those appropriately. So resolving them appropriately
generally means owning those mistakes. We all make mistakes, you know,
(10:49):
you have to own it, not blame others apologizing if
you get something wrong that goes a really long way
as well and really important. You've got you've got to
fix it. If you've done something wrong, if it's all
gone astray, then it's it's your job to fix that.
And by actually by fixing things really well, you can
almost end up in a better situation because you've you've
(11:11):
shown your clients or you're working partners actually, that you
can be trusted if things go wrong to resolve them.
And that's just as important, I think.
Gillian Bowen, Host (11:21):
Geraldine, what do you think the impact is of breaching
or breaking trust between a professional and a client?
Geraldine Magarey FCA (11:32):
Well, it can have, you know, massive repercussion repercussions. But
as Lisa has just pointed out, you know, you can
get it back, but it can take a long time
to get back. So, you know, the way we work
with our clients there is it is based on a
huge amount of trust in each other. So it's actually
a two way relationship. Actually. We need to think about
it's not just about clients trusting us as a professional,
(11:55):
it's actually us trusting the client as well. So that
two way trust is super important to to think about
in this, in this relationship. But if either one of
the parties breaches that trust or breaks that trust, it
takes a long time to be able to rebuild it.
And the things that Lisa said, you know, around the apology, around,
you know, showing you can fix it, you know, bringing
that track record back in and, you know, keeping things
(12:19):
on track, not making any other errors. Um, you know,
it's really just that long road to rebuilding it, but
it can be rebuilt. But if we don't rebuild it, um,
it's it's basically probably the very hard to have that
professional relationship. Yeah. To come back from it.
Gillian Bowen, Host (12:36):
Yes. Yes.
Dr Lisa Marriott FCA (12:37):
So I'm sorry. You go. Yep. There's just to pick
up on what Geraldine was saying there. There are a
couple of authors who work in the Harvard Business School,
and they say pretty much almost an identical comment to
which Geraldine just made, which is it takes a sustained
history of right. And that's arrived to wipe out one wrong.
(12:59):
So it is it's much more important to, to really
get things right, if you possibly can. There's also a
really interesting statistic, and I wouldn't necessarily say this is 100%
to be relied on and repeated and quoted, but they
have a statistic that suggests that a company can lose
(13:21):
around about 30% of its value in the short term
when it loses trust. And as I say, that's I'm
sure that's a highly variable statistic, but it is an
indication of the real impact, financial impact that can can
occur when trust is damaged.
Gillian Bowen, Host (13:39):
I think now's a good time to then pivot to, um,
you know, some of the preventative measures. We've talked about
the importance of integrity and, and honesty and having that.
But I'm thinking, Geraldine, what are the benefits? For example,
if you're part of a professional body like CA ANZ, what
does being part of a professional body help you with?
Geraldine Magarey FCA (14:01):
We at the end of the day, we are, you know,
we are a community of professionals. The CA ANZ itself provides
a number of of not just tools but, you know,
access to people and resources. So I'll just give you
a little bit of a couple of examples if that's okay.
So you know, obviously even our research paper, so the
research paper itself was a was a, it wasn't just,
you know, some sort of interesting set of research. You know,
(14:23):
it really came back with, you know, a set of um,
sort of, you know, six things to sort of think about.
So there's, you know, there's the research papers will give you,
you know, some, some ideas and suggestions around how you
might like to, to approach trust. We've got things like
ethics training, which is actually mandatory as being part of
a being a chartered accountant. We have courses actually on trust,
(14:47):
which again, important to, um, you know, to be aware of. And,
and one of the my favourite resources. And we are very,
very indebted to these members and lucky to have is
our Chartered Accountants Advisory Group, which are a group of
our members who very generously give their time to help
their fellow members around difficult situations. So it's exactly these
sorts of things about, you know, when you've got an
(15:09):
issue or it might be a conflict or something in
there that you know, around ethics or that you just
need to talk to. It's someone who is independent of you,
independent of the situation, who has vast experience. And, you know,
you can actually talk through that dilemma with them. And,
you know, to me, that is one of the most
fantastic things we have and offering our members. So we
(15:30):
there's a lot of benefits to being, you know, part
of that, part of the professional body and part of
something that we all face these issues during our time
as chartered accountants and during our careers. So it just
gives access to those, you know, to people and resources
to be able to talk through those issues.
Gillian Bowen, Host (15:46):
Um, there's a couple of good takeaways from there, which
I'll give some some wrap up when we finish in
a couple of minutes time. And that includes the fact
that we have done an episode for you on this
podcast series about the advisory group, or as we call it,
two of our CAAG professionals are on it, one from Australia,
one from New Zealand. It's really interesting picking their brain
and understanding how that works. I'll put a link to
(16:06):
that in the show, notes. Lisa. Before we before we
wrap up, I'll get a final thought from both of
you in a in a tick. I also wanted to
just ask a quick question about what role does deterrence play?
And I'm thinking in the sense of obviously for chartered
accountants there is a disciplinary framework, but there'd be lots
of professional organisations who operate with a disciplinary framework. What
(16:28):
role does deterrence play in ensuring trust is upheld?
Dr Lisa Marriott FCA (16:31):
Yeah, I think it does play a pretty important role.
And it's quite good actually, that our disciplinary framework is
reasonably public, because what that does is it does signal
to other members and our clients and potential clients that
the profession does take any sort of non-compliance quite seriously.
And then what that does is that builds trust across
the broader profession, and everybody benefits.
Gillian Bowen, Host (16:55):
Fantastic.
Geraldine Magarey FCA (16:56):
Could I add into that Gill? Sorry.
Gillian Bowen, Host (16:57):
Of course. Go for it.
Geraldine Magarey FCA (16:58):
So there's two aspects obviously to deterrence. It's obviously that
individual side, the accountability and repercussions. But it's actually super
important that deterrence actually at the beginning of a trust relationship.
Because if we don't know our clients, they come to
us often because we are a chartered accountant. So there's
that trust in the designation. It's a shortcut in a way.
It signals that to our clients we've got a high
level of training. We've got we've demonstrated our competence. We've
(17:21):
passed demanding exams. We have a code of ethics, we
have professional standards, and we abide by disciplinary process. So
all of that builds trust in our designation, which helps
in that initial interaction with the new client.
Gillian Bowen, Host (17:34):
Absolutely. Look, that is a great way to bring together
the discussion and that it is Global Ethics Day, as
I mentioned at the start of the show. So on
that theme, I wanted to let everyone listening know that
CA ANZ has created a dedicated global ethics hub on our website,
which links to a wide range of resources, and I'll
put a link to that in the show notes. And
(17:55):
we're also making Micro Course three, which is called Conflicts
of Interest available to all members for free until the
end of October, so details on how to access access
that course can also be found on that Global Ethics
Hub page on the website. And to coincide with the
18th of October, we're launching a new trust CPD course,
(18:17):
which will be available, and I'll put the link to
that in the show notes. I will put a link
to the episode on the Chartered Accounts Advisory Group or
CAAG that Geraldine was just mentioning, which is called How
to Get Help with Ethical Dilemmas. Very topical and key.
And if you are listening to this on the 18th
of October, I will not miss an opportunity to let
you all know that there are still two days to
(18:38):
vote in our member vote to further strengthen the Professional
Conduct framework, so eligible members would have received an email
from electionz.com, which is the independent voting provider who's running
the vote. And if you can't find it, have a
look in your junk or spam folder. That email has
your unique Pin and the link to get into the
voting platform. We want our members to be involved in
(18:59):
this important process. If you haven't voted, please do. All
the information is in the voting platform and also available
on our website. Voting closes on the 20th of October
and the 20th of October is also the day of
our AGM. Gosh, come along to that too. I'm plugging
things left, right and centre. Why not? Lisa and Geraldinea
final thought before we go. Lisa you first.
Dr Lisa Marriott FCA (19:22):
Fantastic. Thanks. I would just like to close by saying that,
you know, research has shown that there are just enormous
benefits associated with being trustworthy. So very quickly companies that
are trusted have higher revenues, higher profitability, higher shareholder returns
and lower employee turnover because trust increases commitment to an organisation.
(19:43):
So those are all great things to have. It's actually
much easier to be honest and ethical and reap the
gains that come with that. And you know, of course
it is just the right thing to do as well.
Gillian Bowen, Host (19:55):
Geraldine, all good points there. What else?
Geraldine Magarey FCA (19:57):
Yeah, three things for me. I would just say, you
know honesty is key. So never forget that. Also be
mindful of that trust gap that I referred to early on.
And in the in the age of, you know, A.I. , internet,
fake news etcetera, etcetera that are leverage your expertise because
your the expertise you have is super important to building
(20:21):
and maintaining trust in the current world.
Gillian Bowen, Host (20:23):
I love that leverage your expertise. What a great message.
That is all we have time for. If you want
to find out more, head to the Global Ethics Hub,
which I've mentioned. There's a link in the show notes. Also,
give the podcast a follow and we have an email.
So get in touch podcast@charterdaccountantsanz.com Let's start a conversation. Thank you.
Lisa Marriott and Geraldine Magarey, FCA for being my experts
(20:45):
on Small Firm, Big Impact.
Geraldine Magarey FCA (20:48):
Thanks, Gill.
Dr Lisa Marriott FCA (20:49):
Thank you.
Gillian Bowen, Host (20:50):
Bye bye.
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