Date posted: 27/07/2020

A purpose beyond profit

Professions must act in the public interest to maintain their social licence to operate

In brief

  • Acting in the public interest is a key differentiating characteristic of professions
  • From adhering to an ethical code comes the idea that a profession has a purpose beyond profit
  • The public believes that ethical behaviour is the biggest benefit of dealing with professions

Individual professions are subject to different sets of ethical norms but most – if not all – have a requirement to put a client's best interest above their own.

Doctors are required to consider the health and wellbeing of their patients as a priority, accountants are required to act in the public interest, while the code of conduct for teachers requires them to act in the best interests of their students.

When individual members of a profession fail to hold to these standards, it undermines public trust in that profession as a whole.

Australia's High Court has been rocked by serious allegations of sexual harassment by a senior judge. An engineer was among the ringleaders prosecuted in 2019 for the VW emissions scandal, while an Australian surgeon implanted a medical device – in which he had a financial interest – in his patients despite knowing it was faulty.

Acting in the public interest was a key differentiating characteristic of professions identified in research commissioned by Chartered Accountants Australia and New Zealand (CA ANZ) for their recently published report The 21st Century Profession.

The 21st Century Profession

Professions that leverage disruption will continue to make a difference into the 21st century. But they must ensure that their skills and expertise remain grounded on a solid foundation of ethics, trust and integrity.

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With insights from surveys of Chartered Accountants and members of the general public across Australia and New Zealand, the research found that ethics are considered the defining foundation blocks of professions.

From adhering to an ethical code comes the idea that a profession has a purpose beyond profit.
This purpose, which includes acting in the public interest, is essential for a profession to maintain its social licence to operate.

The research shows that this is well understood by Chartered Accountants. Asked to nominate 11 essential characteristics of professions, almost 60% of accountants nominated acting in the public interest.

While the figure for the general public was lower, at almost 40%, the public responses placed a high priority on characteristics such as a code of ethics, accountability, and trust which all play into the idea of the public interest, with no conflicts of interest.

"Integrity and ethical behaviour are the keys to maintaining the value in any professional designation. Once the trust in these is lost the designation becomes meaningless."

Asked to nominate the main benefit of transacting with a profession, the number one benefit for the general public was that "they will behave ethically".

In the case of financial advisers, for example, people working in that industry may be experts, but – as Royal Commissioner Kenneth Hayne pointed out in 2018 – their failure to act in the public interest undermined any claims that financial advice had achieved the status of a profession.

The Royal Commission into Misconduct in the Financial Industry found many examples where financial advisers had put the pursuit of profit before the wellbeing of their clients and the public interest.

Many clients had assumed they were dealing with the financial advice 'profession' and expected that all the safeguards traditionally associated with a profession would be in place, including a commitment to the public interest.

The absence of these safeguards resulted in failings that created significant harm to consumers and illustrated the current gap between the expected and actual conduct of advisers.

Accountancy has also faced its issues. Auditors who provide additional services to clients have raised issues around conflicts of interest. Can they be without bias when auditing a client if they have a separate relationship based on providing other services for additional fees?

The implications of the CA ANZ research are that while society places a value on expertise and education, it places an even greater value on ethical behaviour.

Any perception that someone acts in their own self-interest, whether or not it is grounded in reality, is a threat to the perceived benefits of engaging a member of a profession when alternatives exist.

Expertise is a given, but on its own insufficient.

As one respondent to the CA ANZ survey put it: "Integrity and ethical behaviour are the keys to maintaining the value in any professional designation.

"Once the trust in these is lost the designation becomes meaningless."

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