Ethics - the professions and business - who do people trust ?

Extract Table from Governance Institute Ethics Index 2016

The release of research commissioned by the Governance Institute of Australia confirms the distrust which the wider community have with a number of key sectors of society. Overall, according to the survey sample, 84% rate ethics as important to a well functioning society however Australian society was rated as being only 'somewhat ethical' showing that there is an perceived ethical deficit.

The survey had a number of key findings of note -

• The ethical score by broad sector is shown in the extract Table (above) demonstrating a high level of confidence in health and education while at the opposite end of the measurement, a very low confidence in the ethical behaviour of large corporations and the media.
• Within the key business sectors, real estate agents have the lowest ethical score with 1 in every 2 people stating that they are unethical. In contrast farmers and agricultural businesses are perceived as being the most ethical.
• Australians rate the ABC as the most ethical media platform.
• The banking, finance and insurance sector has the lowest ethics score amongst all sectors with a particular focus on executive salaries and bonuses, followed by bribery/corruption and poor treatment of customers.
• The top 5 ethical issues in business were rated as: corruption (69%), company tax avoidance (61%), misleading and deceptive advertising (59%), workplace bullying (50%) and discrimination and executive pay (both at 49%).

How was this sample constructed ? 

• n= 1,001
• Gender: 50% male and 50% female
• Work status: 15% were students, 59% working, 9% home duties, 9% retired, 6% not employed
• Location:  21% from Sydney, 19% from Melbourne, 10% from Brisbane, 8% from Perth, 6% from Adelaide with the rest from around Australia
• Age: mainly 22-35yrs: 22%, 36-45 yrs: 22%, 46-55 yrs: 22%, 56-65 yrs: 18%,
• Education: mainly trade certificate: 28%, Bachelor degree: 23% and Post graduate: 11% 
• Household status: mainly single 35% couple with children: 25%  couple without children: 25%  

This survey dovetails with similar research by the Lowy Institute which rates public perception about the professions - on a consistent annual basis it shows an almost identical set of results. The fact that there is a continuing trend of distrust with the same sectors year-by-year should send a clear message that change is needed. Yet, none appears to occur.

An executive summary of the Governance Institute's research can be found at this link:

Governance Institute of NSW - Ethics Index

Blockchain - coming to a database near you

Blockchain is the latest development in secure database and transaction systems, operating on the principle that the recording and storage of every transaction only occurs through a consensus mechanism across the connected computer network. Blockchain is best described as a distributed database system in contrast to the conventional, centralised systems with which we, the consumers, are generally aware.  In simple terms blockchain operates as follows -

• data, for example a single transaction, is encrypted as it is stored,
• access to that data is also encrypted,
• each block within the system is only generated once multiple parties (best described as nodes) reach a consensus and validate the data, 
• as a distributed database, multiple copies of data exist across multiple computer systems which together create the peer-to-peer network,
• the loss of one node means that Blockchain can survive as the master copy is shared via its distributed design,
• it is impossible to alter historical records meaning the data points are immutable. This is one of the strengths of the system as its means that in order to attack the ledger, simultaneous attacks would need to be launched on all copies.

Blockchain's development has been centred on a consortium called R3 which comprises 45 banks including J.P. Morgan and Goldman Sachs. Other major non-banking corporations now involved include, not surprisingly, Microsoft, American Express, Visa, Mastercard, NASDAQ, NYSE. At the moment blockchain is used for making international financial transfers however the intention is to use it for online transactions. Apps are already being trialled for music distribution, sports betting and a new type of financial auditing. Proposed expansion of the platform will include services such as smart contracts, crowdfunding and auctions.

So what are the weaknesses of this system ? There are quite a few, for example in the legal and regulatory sphere, data privacy (being a foremost one), cyber security (albeit the possibility of breaching the network if not able to corrupt it) and cost-benefits are not fully established. The very fact that large banks like the system, is perhaps reason enough for the wider community to be wary.