Sri Lankan professional bodies tolerating unethical conduct: SEC chief
ECONOMYNEXT – Professional bodies and trade chambers in Sri Lanka were not taking action against unethical conduct of their members, undermining efforts to inculcate and enforce business ethics, the head of the capital markets regulator said.
Proper implementation of business ethics in organizations can ensure maximization of lawful profits and effectively protect the interests of all stakeholders, said Thilak Karunaratne, chairman of the Securities and Exchange Commission (SEC).
“This eventually can ensure a viable and competitive business environment,” he said in a speech at the Junior Chamber International Biz Meet 2016
“It is very important that organizations practice business ethics in order to ensure good governance in their organizations.”
Most of the trade chambers, professional bodies and similar organizations in Sri Lanka have codes of ethics or codes of conduct, Karunaratne said.
“Some are very well documented. They expect their members to be ethical,” he said. “But how many of these institutions have taken action against their members for not conforming to these? My own experience is very rarely, if at all.”
Karunaratne also spoke about the importance of ethics in capital markets, a source that fuels business activities.
He recalled how in 2012 he quit as chairman of the SEC when he “was confronted by the highest in the land” and “stood up for what was just as I was not ready to trade my values.”
In the stock market stakeholders are expected to inculcate professionalism and ethics in all their dealings in order to foster trust, he said.
“We experienced how the market had to pay dearly during 2010/ 2011 due to the actions of few individuals who resorted to unethical and downright scandalous methods of manipulating the market,” he said.
“It is with great concern and distress I reflect on how attempts were made by again a few investors, stockbrokers, investment advisors and even influential politicians to transform the market to a casino during the previous regime. Market manipulation was the talk of the day.
“In the process a large number of innocent and ignorant small time investors who followed with herd instinct these manipulators got ruined and we are still in the process of giving some redress to these investors. These unethical behaviour patterns were well grounded on unlimited greed and power politics.”
(COLOMBO, June 02 2016)