"Anat, you've been missing an important piece of our business in your columns on super community banking," Larry Fish, the CEO of Citizens Financial Group, said over lunch recently. "You do not mention the importance of ethics and corporate responsibility in super community banks. Ethics and corporate responsibility are key components of super community banking, and especially so at Citizens."
He was right. Citizens has implemented an approach to ethics and corporate responsibility in banking that is unique, both regarding its employees and its customers.
Profits Plowed Back
Over 1% of Citizens' pretax profits are invested back in the neighborhoods served by Citizens, reflecting the corporate commitment to the community. "We invest in the community in ways intended to better the lives of people in the communities we serve," said Larry. "We have a preference for basic human services and community needs, as opposed to more social corporate giving. We do not donate to the symphony balls or the art museum openings."
Citizens - from its board to its management to its 2,500 employees - is "religious" about ethics. If you ask Citizens' employees what is special about their bank, they will mention its ethics.
For example, its integrity an high ethical standards play key role in trapping and convicting a high-rolling precious metals dealer in Rhode Island who tried to use Citizens to launder vast amounts of cash.
Labor Department Audit
Another recent example indicates how proud Citizens management and board are of its position on ethics. The company underwent a long and arduous audit by the Department of Labor, which resulted in only one small incidental violation.
The Department of Labor wanted the bank to sign a letter indicating that it was not in compliance in committing to correct the problem swiftly.
Management and the board refused to sign the letter unless the Department of Labor revised it to properly reflect the bank's current position, which is "substantially in compliance."
Loan Program Wins Award
This is one of the few examples where bank management prevailed against the regulators, and the regulators responded positively and revised the letter.
Citizens' commitment to corporate responsibility was recognized recently when the company's Rhode Island bank received the prestigious national Social Compact Award for an affordable-housing loan program it runs in Providence and a micro-loan program for start-up minority-owned businesses.
It continually wins praise from community activists and regulators alike for following the spirit as well as the letter of the Community Reinvestment Act.
Ethics are woven throughout the corporate value system at Citizens. In addition to compliance, the company's corporate values are diversity, communications, commitment to change, and quality service.
Meetings with Employees
And ethics is a major part of each. At Citizens, everyone walks the talk. Diversity is an integral part of management and important to the company's public face. When participating in a meeting run by Citizens, you are as likely to encounter a Cambodian monk chanting a prayer as you are an Afro-American minister reciting a traditional Christian prayer.
The communication ethic at Citizens is driven by a goal of beating the local newspapers with important news about the company and ensuring that employees are valued and respected. Larry meets regularly with a different group of employees at all levels of the company and encourages his managers to do the same.
Communication, diversity, and integrity are important elements at Citizens in ensuring that the changes that take place in the company are consistent with corporate goals.
"Just as we expect the highest ethical standards of our employees, we, too, have an ethical responsibility to our people," says Larry. Citizens works hard at ensuring that the men and women who work there are fit - body and soul. In addition to a fitness center, the company provides each employee with access to professional counseling through medical staff from Brown University to help them deal with personal or family problems.
Perhaps the best way to describe Citizens' outlook is through the company's two familiar sayings: "You'll never have to look down at your shoes when asked where you work," and "People will not fail easily at Citizens."