The author examines empirically how professionals in finance (PIFs) rank relative to the general population with respect to the self-enhancement and self-transcendence values as described in the standard psychological literature. Although the press and popular opinion have blamed the global financial crisis partly on perceived value deficiencies among PIFs, no statistically significant value differences between PIFs and the general population appear to exist. In fact, for some areas analyzed, PIFs score better than the general population. The author proposes that the financial services industry rewards bad behavior, and he believes appropriate regulatory reform can help guard against future ethical lapses.

In describing human values, researchers in psychology often refer to a formal framework developed by Schwartz, Melech, Lehmann, Burgess, and Harris (Journal of Cross-Cultural Psychology 2001) that describes four key areas likely to influence the ethical choices professionals make when managing other people’s money. These areas are (1) benevolence and (2) universalism (e.g., understanding and tolerance), which together form the “self-transcendence” (ST) construct, and (3) power and (4) achievement, which together form the “self-enhancement” (SE) construct.

Although current conventional wisdom would predict higher SE and lower ST scores among PIFs than among the general population, the data do not support this hypothesis. Those charged with developing regulatory structures either within firms or across markets must answer the nature-versus-nurture question for themselves. If PIF behavior is degraded by the industry’s incentive structure, regulators and compliance professionals should look closely at what pressures could lead to PIF ethical lapses to monitor for such lapses and potentially create regulations to hinder abuses.

It should also be noted that the author does not focus on the ethics of specific actions leading to the crisis. Leaders and organizations must remain alert regarding how the “economic morals” of those under their purview might change over time or under particular circumstances. Circumstances clearly influence actions, and actions—whether good or bad—probably influence values because humans are given to rationalizing their behavior to try to maintain internal consistency.

Drawing on the European Social Survey, the author compiles more than 120,000 surveys on SE and ST values using data from 2002 to 2006 (to avoid 2008–2009). Individuals are classified according to International Standard Classification of Occupations categories, with the PIF category including only finance and sales associate professionals, securities and finance dealers and brokers, business service agents, and trade brokers. PIFs make up 414 of the total survey responses.

Individual responses are analyzed for SE/ST rankings, and control variables are recorded for sex, whether the respondent is a manager, age, social status (i.e., job prestige and net income), country/territory, and outlier scores. The null hypotheses (that PIFs hold substantially the same SE and ST values as the general population) are tested using a transformed version of Cohen’s d to account for nonnormality in the data.

Robustness checks include removing specific occupational categories, analyzing the impact of control variables, considering other values in the Schwartz et al. framework (hedonism, stimulation) as well as nonframework “economic morals,” and determining the frequency of low-ranking “bad apples”—that is, individuals behaving badly—within the PIF group and the level of leadership they tend to reach. The level of leadership of these individuals reflects whether the industry rewards such values. Although a few revised measures show a greater difference between PIFs and the general population, none are statistically significant, and some variations even point to a superior value set among PIFs compared with among the general population.

The author makes a clear case that the financial industry structure must influence ethical decisions because finance professionals do not show any major value differences relative to non-PIFs. Intuition also shows us that we are not the same under pressure as we are at peace (e.g., consider driving in heavy traffic). It is possible, too, that values in the general population (including PIFs) might change across decades. This question could represent an area for further study. The author is careful to suggest “redesigning” regulation, which is good because more regulation does not necessarily produce better results.