Table Of Content“In this updated edition, Gentilin has refected on the events of the past few years
and provided us with a deeper, more expansive understanding of governance failures
within institutions. By doing so, he has taken the exploration of ethical challenges in
business to a completely new level.”
Lindsay Tanner, Australian Minister for Finance 2007–2010
“If you liked the frst edition of The Origins of Ethical Failures, then you MUST read
this largely revised edition. Gentilin has gone back to the drawing board to review
the research and recent industry developments, including case studies that emerged
from the Hayne Royal Commission. His readable style brings to life rigorous
research fndings and presents the case for a less idealistic and more hardnosed focus
on institutional arrangements. This is a fascinating and challenging account of why
people behave badly at work and what can be done about it.”
Professor Elizabeth Sheedy, Macquarie Business School
“Gentilin provides a challenging narrative for those of us who commit our profes-
sional lives to promoting ethics and governance. By drawing our attention to our
capacity to err, he builds a compelling argument that ethics codes, although necessary,
are not sufcient. To make ethical conduct a reality, leaders must ‘focus obsessively’
on putting in place ‘institutional arrangements’ that support the pledges within
these foundational documents. This book is a must-read for leaders, regulators and
students who are serious about creating lasting positive change.”
Cris Parker, Director, The Banking and Finance Oath
“The Origins of Ethical Failures ofers the reader a range of powerful insights into
what drives misconduct in fnancial service institutions. Ethics, culture, economic
incentives, public and private governance and group dynamics in big organisa-
tions are all dissected to draw the reader to the inevitable conclusion that there is
no one silver bullet for solving this problem. Rather, the answer lies in examining
the insights gained from a range of disciplines and drawing the threads together,
something that Gentilin does well. I commend this book to anyone seeking a more
holistic understanding of ethical failure.”
Helen Bird, Senior Lecturer, Swinburne Law School
“Gentilin knows the research, and the theory, but more importantly – he has lived
and exemplifed the reality. If you want to be a better professional, and to be a better
professional organisational leader with credibility, you will buy and read this book.”
A.J. Brown, Professor of Public Policy & Law, Grifth University;
Board member, Transparency International
The Origins of Ethical Failures
In this thoroughly updated new edition of his ground-breaking and award-winning
book, Dennis Gentilin draws on both his personal experience as a well-known
whistleblower and recent events in the Australian fnancial services industry to
provide insights into how widespread, systemic ethical failure can take hold in an
industry and, crucially, what leaders need to focus on to avoid it.
In 2001, as a young university graduate, Dennis Gentilin became a member of
an FX trading desk at one of Australia’s largest banks, the National Australia Bank.
In the years that followed, the desk became involved in a trading scandal that
resulted in the resignation of the chairman and CEO, the collapse of the board,
signifcant fnancial loss and incalculable reputational damage. Over the past decade,
the frequency of ethical failure within the Australian fnancial services industry
has only increased. Among other failures, there have been multiple breaches of
the Anti-Money Laundering and Counter-Terrorism Financing Act, rigging of
the benchmark BBSW interest rate, mis-selling of consumer credit insurance and
predatory sales practices. In this new edition, Gentilin draws on experimental
research from economics and fnance to illustrate how, when the conditions are
permissive, humans have a predisposition towards dishonesty, and therefore, to
reduce the likelihood of ethical failure, leaders must focus obsessively on putting in
place appropriate institutional arrangements.
Gentilin’s combination of intellectual rigour and real-life refections makes this
book a must-read for students, practitioners and leaders alike who would like to
develop a deeper understanding of corporate ethics, governance and conduct.
Dennis Gentilin is a risk and governance professional with over 20 years’
experience in the banking and fnance industry. A unique experience early in his
career in which he was publicly named as a “whistleblower” was the catalyst for
his strong interest in ethics, conduct and culture. He has contributed articles to
The Australian Financial Review and The Australian on these topics and is invited to
lecture at some of Australia’s leading business schools. Dennis currently works with
UniSuper, one of Australia’s largest superannuation funds.
The Origins of Ethical Failures
Lessons for Leaders
SECOND EDITION
Dennis Gentilin
Designed cover image: Getty Images / erhui1979
Second edition published 2023
by Routledge
4 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN
and by Routledge
605 Third Avenue, New York, NY 10158
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2023 Dennis Gentilin
The right of Dennis Gentilin to be identifed as author of this work has been
asserted in accordance with sections 77 and 78 of the Copyright, Designs
and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced or
utilised in any form or by any electronic, mechanical, or other means, now
known or hereafter invented, including photocopying and recording, or in any
information storage or retrieval system, without permission in writing from
the publishers.
Trademark notice: Product or corporate names may be trademarks or
registered trademarks, and are used only for identifcation and
explanation without intent to infringe.
First edition published by Routledge 2016
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-in-Publication Data
Names: Gentilin, Dennis, author.
Title: The origins of ethical failures: lessons for leaders / Dennis Gentilin.
Description: Second edition. | Abingdon, Oxon; New York, NY: Routledge,
2023. | Includes bibliographical references and index.
Identifers: LCCN 2022032286 (print) | LCCN 2022032287 (ebook)
Subjects: LCSH: Business ethics. | Organizational behavior—Moral and
ethical aspects. | Professional ethics. | Leadership.
Classifcation: LCC HF5387 .G465 2023 (print) | LCC HF5387 (ebook) |
DDC 174/.4—dc23/eng/20220707
LC record available at https://lccn.loc.gov/2022032286
LC ebook record available at https://lccn.loc.gov/2022032287
ISBN: 978-1-032-33456-1 (hbk)
ISBN: 978-1-032-36832-0 (pbk)
ISBN: 978-1-003-33536-8 (ebk)
DOI: 10.4324/9781003335368
Typeset in Bembo
by codeMantra
To my wife and daughters, who provide corporate ethics with the necessary context.
Contents
Preface xi
List of acronyms xiii
Introduction 1
References 13
1 Our fawed humanity 17
Are humans honest? 21
Fee-for-no-service scandal 32
Lessons for leaders 37
References 37
2 Incentives 41
Are incentives effective? 45
Balanced scorecards 48
Long-term incentives 57
The role of public institutions 61
Lessons for leaders 66
References 68
ix
