INTHEBLACK November 2025 - Magazine - Page 48
P O D C AS T
Ethical leadership for
finance and accounting
professionals
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Words Sonakshi Babbar
“It’s important to recognise that because something
is legal, doesn’t mean that it is actually ethical.”
BRENDAN O’CONNELL, ICMA
From financial frauds to billion-dollar fines,
large-scale ethical failures can dominate
headlines. But for Brendan O’Connell,
global president of The Institute of Certified
Management Accountants and member of CPA
Australia’s ethics centre of excellence, these
scandals are more than just news stories.
They are lessons in ethical leadership.
HARD LESSONS
The first lesson is the importance of “tone at
the top”, says O’Connell in a recent episode
of CPA Australia’s INTHEBLACK podcast.
At Wells Fargo bank in the US, for example,
between 2011 and 2016, senior leadership created
a high-pressure sales environment that “pushed
employees to meet quite unrealistic cross-selling
targets”. As a result, employees resorted to
unethical conduct to meet these goals. “The tone
at the top was at fault because leadership
created an environment where achieving targets
was the key focus.”
Financial reporting is another pressure point.
O’Connell points to aggressive earnings
management — or “cooking the books” — as a
serious ethical concern. “It’s often driven
by senior executives,” he says, “but unfortunately,
accountants often get blamed.”
Not all questionable behaviour is against
the law. For example, overly optimistic revenue
recognition might comply with accounting rules,
but can still be misleading. “It’s important to
recognise that because something is legal, doesn’t
mean that it is actually ethical,” says O’Connell.
48 INTHEBLACK November 2025
ETHICAL DECISION-MAKING IN PRACTICE
Accountants are “expected to uphold the key
ingredients of the code of our ethical conduct,
which of course is APES 110 in Australia”.
O’Connell says the five fundamental principles
within the code form a “decision-making
framework” that helps identify the particular
ethical issue. Next, assess any threats, such as
self-interest, that could compromise judgement,
and apply safeguards to reduce or eliminate
those threats.
The final step is to use professional judgement,
consult when needed and document the process.
In serious cases, the Non-Compliance with Laws
and Regulations (NOCLAR) provisions may
apply — these are guidelines for reporting
suspected breaches of the law, he notes.
QUIET WINS
While ethical failures grab headlines, O’Connell
highlights the successes that often go unnoticed.
“Some businesses have chosen to act ethically
even when they weren’t actually legally
or professionally required to do so,” he says.
O’Connell points to Patagonia, whose founder
transferred ownership to a trust to fund climate
action, and BHP, who voluntarily disclosed
climate risks long before it was mandated.
“They actually front-footed climate risk
as a governance and investment issue within
their organisation — and that influenced others.”
LISTEN
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podcast episode
