Claire Ighodaro, a board member of the International Ethics Standards Board for Accountants, sees a need for firms to promote an ethical culture by setting a tone at the top levels of the organization.

Besides being a member of the IESBA board, Ighodaro is a board member and Audit Committee chair of Lloyd’s of London, as well as a non-executive director and Governance Committee chair of Merrill Lynch International. She is a past president of the Chartered Institute of Management Accountants. She became a member of the IESBA, which operates under the auspices of the International Federation of Accountants, in 2013.

In an interview conducted by IFAC manager Alexandra Waibel, Ighodaro shares her insights on being a woman in the accounting profession and the challenges that accountants face in handling ethical dilemmas.

Can you talk a little about your background?

I actually started off not planning to be an accountant at all. I loved math and physics, and I wanted to be a civil engineer. However in the ’70s, despite having done well in math and physics, I was told by everyone—teachers and others—that civil engineering for a girl wasn’t a good idea. I remember one person saying to me, “You do realize there are no women’s toilets on building sites? You would probably never get a position,” which probably was quite true in the ’70s.

When an uncle suggested accounting, I really didn’t have a strong understanding of what accountants did. When I got into it, it wasn’t quite what I had planned. I was a bit concerned starting out that I would not be able to make my own way as strongly as I wanted to in such a structured career framework. And then, just by chance, I discovered management accounting. And I thought, well, that sounds more interesting for me because I can apply my knowledge and my interests, and I won’t be constrained. Ultimately, I was able to go into industry, and I ended up working in an engineering company after all. So I was able to combine the two interests and I thoroughly enjoyed the career it gave me.

You then went on to become the president of CIMA.

Yes, I became the first female president of CIMA in 2003. I did not start at CIMA with the intention of becoming president. Bear in mind that in those days, the councils of the institutes were composed of mostly men—in a group of 50, there might be three or four women.

I didn’t want to be a token of any sort so when I was first approached I was against it, but I finally agreed to being included on the ballot. I never expected to be elected and was rather shocked when I was. At first, I was horrified actually. But it also gave me confidence that my colleagues had elected me. So even when things were difficult, I felt it my responsibility to them to take the leadership role and to do it properly. So I threw myself into it, while continuing to work full-time at BT, which was stressful, but I felt it was important for presidents of the chartered accounting bodies to continue to be actively engaged in accounting and workplace issues.

Why do you think it has taken so long for women to be elected to these leadership positions?

I suppose people often choose according to what they are used to. And that was why I was surprised when I was nominated and elected. My colleagues were different. They were supportive from the beginning, even those who didn’t necessarily agree with everything I proposed. But they were very supportive as a group. And I was very honored to be their president.

A lot of people will say that an ethical work culture starts with the tone at the top. Do you have any advice for leadership to instill a culture of ethics at their company or practice?

I strongly believe that matters such as ethics have to start from the top. You have to walk the talk. And it’s deeper than just declaring that you require an ethical culture in your organization. It’s what you do, it’s what you require of your own people, and it’s how you set the strategy and rewards within the organization. You have every opportunity as a leader to do that.

It’s more important than just setting the tone. You also need to put in place the right frameworks—the right control structures that help people to be ethical, such as a good whistleblowing policy.

I chair audit committees in non-executive directorship roles for large corporations and one of the things I look at is whether we have had any whistleblowing incidents. And I don’t wish to see them, but if there aren’t any whistleblowing incidents, you must ask why not. I check the policy. Is the policy applied? Is it understood? Is it easily available? I want to make sure if there aren’t any incidents that it’s not because people just don’t know that there is a policy to guide and protect them.

I also look to see how any whistleblowing incidents have been dealt with. Were they elevated through management and those charged with governance? So, for example, as chair of the audit committee, am I written into that policy or do people get blocked from speaking to an external director? There needs to be a robust framework that enables people to raise ethical matters if they feel that they’re not being heard by management.

At the same time, leadership has to ensure that middle management understands this too. Many organizations are quite good at having strong trainee or graduate trainee programs, where they induct new leaders and talk about the culture. But the truth of the matter is that organizations are led by the people that are in the middle. So how does the organization talk with people who may have been there for a long time or have come in from elsewhere with a different culture? How do we address ethics training right through the organization at every level? And how do we test it? There needn’t be a fear of ethics. It doesn’t mean you’re uncompetitive. Quite the reverse, one hopes. So yes, I do feel there’s a huge responsibility for leadership.

Do you think that ethics standards can help prevent accounting and other forms of financial fraud?

I believe that employers need to have a clear and consistent message about ethics. I think that ethics being out there in front can help in preventing accounting and financial fraud. Not just because the policy tells you the right thing. You may know what the right thing to do is, but that there’s an added layer of guidance and protection whereby you have a framework—a code—which is part of your professional responsibility. And if you are being asked perhaps by your board or by your manager to do things which you can see are unethical, you may worry about insubordination in saying no. But with the ethics code you have this other protection. And, in this way, you are not disobeying your boss; you are following company policy. It gives you something concrete to point to.

Have you in your professional life ever faced an ethical dilemma that you weren’t sure how to handle?

I’ve faced ethical dilemmas, but I don’t think I was ever unsure how to deal with them. I’ve always been conscious of ethics. And, I’m very proud of my profession. So I’ve always understood even when we didn’t have this huge focus on ethics, we’ve always had it as an underlying principle. So I’ve always felt there are rules—professional standards—to which I have to operate.

I can think of places I’ve worked where the leadership have perhaps been very bullish in their approach, and naturally they want you to produce information for a board that puts their case in the best possible light. And you sometimes feel uncomfortable because you have some information which says, well, that really looks more like recommendation B than A. They might want you to present A because that supports them. As a professional accountant I would prepare both options, but in presenting make clear the fact that B is a clear outcome of this analysis. And it gets down to saying as a professional accountant I’m required to tell you this. Now that doesn’t mean that you have to create unnecessary challenges. What objectivity (one of the ethics code’s five fundamental principles) means in this context is that professional accountants are required to present all the relevant information accurately and completely.

What pressures or challenges do accounting professionals face today in terms of acting ethically? Are there any particular challenges for accountants in the country in which you work?

Pressure from superiors or colleagues, as I was getting at in the last question, is a very key area, and research shows that professional accountants frequently seek guidance from their professional bodies on this. In fact, this is an area that my taskforce is looking at in regard to Part C of the code, which deals with professional accountants in business.

We have proposed a brand new section, which I think will be very helpful for accountants. It’s quite an interesting area because there are different kinds of pressure to consider. For instance, pressure from a superior to work hard to meet an agreed deadline is one kind of pressure, but it is a pressure that is appropriate for the role.

What we have tried to do in the new section is to separate out the pressure that is normal or quotidian pressure placed on someone to do their job well—to be efficient, effective, and to meet their objectives—from the pressures to make someone do something which is unethical.

So it’s not just about pressure, but it’s about dealing with pressure to perform your job in an unethical manner, to breach the code. And for those pressures, we have sought to give professional accountants a series of actions whereby they can analyze the pressure and make sure that it’s not just their being new to their role or not being confident enough; and how then they can manage the situation by putting safeguards in place. In some cases, we haven’t used the language of threats and safeguards from other parts of the code; rather, we’ve used “guidelines” quite deliberately and offered examples of actions that might be considered in order to ensure that the professional accountant does not, as a result of the pressure, breach the code of ethics.

In your professional life, having worked in different countries or with or in multinational organizations, have you experienced different corporate ethics environments due to cultural differences?

I’m British born of Nigerian descent. I’m a U.K. chartered management accountant. I work in the U.K., but I’ve also served on boards in Nigeria and held international roles. Sometimes I come across very superficial views of the culture in other places. And, some can be almost insulting, for example, assuming that one culture is inherently more accepting of unethical behavior than another culture. I don’t find this to be correct.

In my experience, working internationally and having sat on boards which operate across the world, I do not believe there is any culture where their ethics clash with our code. So when it is suggested that in developing our ethics code we have to “recognize different cultures,” I always step back and ask, what do we mean by that? Every culture requires ethical behavior.

All right, there might be some interpretation in the area of gifts, but you have a responsibility to use your discretion to not accept a gift that is intended to persuade you to act in a manner which is unethical—and separate those from gifts that are just part of normal cultural gift-giving.

Generally, issues around ethics are international and universal. It’s interesting because you may not realize until you’ve worked internationally, or come together through an organization such as IFAC, that all these different people working in different cultures are working in similar ways and with the same aims. So I do feel that we can have a coherent international code of ethical standards that we can all apply to our work.

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