A Cultural Conduct Risk Assessment Model for Embedding Ethical Governance in Financial and Insurance Sales Practices
DOI:
https://doi.org/10.32628/IJSRST251222712Keywords:
Conduct Risk, Ethical Governance, Cultural Risk Assessment, Financial Sales Practices, Metrics-Based Compliance, Behavioral Risk ManagementAbstract
The integrity of financial and insurance institutions increasingly hinges on their ability to embed ethical governance within frontline sales practices. In response to widespread misconduct scandals and evolving regulatory expectations, this paper proposes a robust, metrics-based conduct risk assessment model designed to evaluate and reinforce ethical behavior across sales-driven environments. Unlike traditional compliance frameworks that focus narrowly on regulatory adherence, this model integrates cultural diagnostics, behavioral risk indicators, and ethics training effectiveness to form a holistic view of organizational conduct. Drawing from interdisciplinary literature in organizational behavior, ethics, and governance, the model introduces quantifiable indicators—such as whistleblower activity, customer complaint patterns, and training retention metrics—to assess cultural alignment and ethical maturity within teams. It also delineates data collection tools including behavioral surveys, digital activity analysis, and feedback loops to ensure real-time insight into frontline behavior. Further, the model is architected to align with compliance, HR, internal audit, and sales management, creating a cross-functional framework for ethical oversight. Through case applications in financial and insurance sectors, this paper demonstrates how the model can be used to evaluate sales conduct, detect mis-selling risks, and optimize ethics training. The study concludes by outlining strategic implications for firms and regulators, acknowledging implementation challenges, and proposing directions for future research, including AI integration and cross-cultural validation. This research contributes a novel, actionable framework for transforming ethical governance from a reactive obligation into a proactive driver of trust, performance, and regulatory resilience.
Downloads
References
A. Reurink, "Financial fraud: A literature review," Contemporary topics in finance: A collection of literature surveys, pp. 79-115, 2019.
D. Amiram, Z. Bozanic, J. D. Cox, Q. Dupont, J. M. Karpoff, and R. Sloan, "Financial reporting fraud and other forms of misconduct: a multidisciplinary review of the literature," Review of Accounting Studies, vol. 23, pp. 732-783, 2018.
S. Turnbull, "Causes and solutions for misconduct in the financial services industry," Law and Financial Markets Review, vol. 13, no. 2-3, pp. 99-113, 2019.
C. Alexander and D. Cumming, Corruption and Fraud in financial markets: Malpractice, Misconduct and Manipulation. John Wiley & Sons, 2020.
M. C. Hersel, C. A. Helmuth, M. L. Zorn, C. Shropshire, and J. W. Ridge, "The corrective actions organizations pursue following misconduct: A review and research agenda," Academy of Management Annals, vol. 13, no. 2, pp. 547-585, 2019.
R. Hirst, "The ongoing challenge of conduct risk management," Journal of Financial Compliance, vol. 6, no. 4, pp. 357-367, 2023.
S. G. Pendse, "Ethical hazards: A motive, means, and opportunity approach to curbing corporate unethical behavior," Journal of business ethics, vol. 107, no. 3, pp. 265-279, 2012.
P. P. Arcot, G. Sayed, B. Parekh, J. Balasubramanian, and V. Sudheer, "The Interplay of Ethics, Culture, and Society in the Age of Finance Digital Transformation," Journal of Southwest Jiaotong University, vol. 59, no. 2, pp. 139-163, 2024.
W. Xi, "Regulatory Changes and Compliance Challenges," in Strategic Financial Management: A Managerial Approach: Emerald Publishing Limited, 2024, pp. 119-134.
A. Nandan Prasad, "Regulatory Compliance and Risk Management," in Introduction to Data Governance for Machine Learning Systems: Fundamental Principles, Critical Practices, and Future Trends: Springer, 2024, pp. 485-624.
H. F. Lynch, M. Abdirisak, M. Bogia, and J. Clapp, "Evaluating the quality of research ethics review and oversight: a systematic analysis of quality assessment instruments," AJOB Empirical Bioethics, vol. 11, no. 4, pp. 208-222, 2020.
D. Kreismann, "Does training design matter? Increasing moral competence with e-based business ethics training: a theory-guided randomized lab intervention," Dissertation, Erfurt, Universität Erfurt, 2021, 2021.
B. A. Mayienga et al., "A Conceptual Model for Global Risk Management, Compliance, and Financial Governance in Multinational Corporations."
C. I. Lawal, S. C. Friday, D. C. Ayodeji, and A. Sobowale, "Strategic Framework for Transparent, Data-Driven Financial Decision-Making in Achieving Sustainable National Development Goals."
S. C. Friday, M. N. Ameyaw, and T. O. Jejeniwa, "Conceptualizing the Impact of Automation on Financial Auditing Efficiency in Emerging Economies."
O. Famoti et al., "Data-Driven Risk Management in US Financial Institutions: A Business Analytics Perspective on Process Optimization."
A. S. Ogunmokun, E. D. Balogun, and K. O. Ogunsola, "A Conceptual Framework for AI-Driven Financial Risk Management and Corporate Governance Optimization," 2021.
O. O. Agbede, E. E. Akhigbe, A. J. Ajayi, and N. S. Egbuhuzor, "Assessing economic risks and returns of energy transitions with quantitative financial approaches," International Journal of Multidisciplinary Research and Growth Evaluation, vol. 2, no. 1, pp. 552-566, 2021.
O. Famoti et al., "Agile Software Engineering Framework for Real-Time Personalization in Financial Applications."
E. O. Alonge and E. D. Balogun, "Innovative Strategies in Fixed Income Trading: Transforming Global Financial Markets."
O. S. Adanigbo, F. S. Ezeh, U. S. Ugbaja, C. I. Lawal, and S. C. Friday, "Advances in Blockchain and IoT Applications for Secure, Transparent, and Scalable Digital Financial Transactions," institutions, vol. 28, p. 30.
F. I. Babalola, E. Kokogho, P. E. Odio, M. O. Adeyanju, and Z. Sikhakhane-Nwokediegwu, "Redefining Audit Quality: A Conceptual Framework for Assessing Audit Effectiveness in Modern Financial Markets," 2022.
O. A. Alabi, Z. O. Olonade, O. O. Omotoye, and A. S. Odebode, "Non-Financial rewards and employee performance in money deposit banks in Lagos State, Nigeria," ABUAD Journal of Social and Management Sciences, vol. 3, no. 1, pp. 58-77, 2022.
S. C. Friday, C. I. Lawal, D. C. Ayodeji, and A. Sobowale, "Systematic Review of Blockchain Applications in Public Financial Management and International Aid Accountability," 2023.
O. O. Elumilade, I. A. Ogundeji, G. Ozoemenam, H. Omokhoa, and B. M. Omowole, "The role of data analytics in strengthening financial risk assessment and strategic decision-making," Iconic Research and Engineering Journals, vol. 6, no. 10, 2023.
T. T. Adewale, T. D. Olorunyomi, and T. N. Odonkor, "Big data-driven financial analysis: A new paradigm for strategic insights and decision-making," 2023.
B. I. Adekunle, E. C. Chukwuma-Eke, E. D. Balogun, and K. O. Ogunsola, "Developing a digital operations dashboard for real-time financial compliance monitoring in multinational corporations," International Journal of Scientific Research in Computer Science, Engineering and Information Technology, vol. 9, no. 3, pp. 728-746, 2023.
M. J. Brannan, "Power, corruption and lies: Mis-selling and the production of culture in financial services," Human Relations, vol. 70, no. 6, pp. 641-667, 2017.
B. I. Adekunle, E. C. Chukwuma-Eke, E. D. Balogun, and K. O. Ogunsola, "Integrating AI-driven risk assessment frameworks in financial operations: A model for enhanced corporate governance," International Journal of Scientific Research in Computer Science, Engineering and Information Technology, vol. 9, no. 6, pp. 445-464, 2023.
K. O. Ogunsola, E. D. Balogun, and A. S. Ogunmokun, "Optimizing Digital Service Taxation Compliance: A Model for Multinational Financial Reporting Standards," 2022.
E. C. Chukwuma-Eke, O. Y. Ogunsola, and N. J. Isibor, "A conceptual framework for financial optimization and budget management in large-scale energy projects," International Journal of Multidisciplinary Research and Growth Evaluation, vol. 2, no. 1, pp. 823-834, 2022.
D. Ajiga, O. Hamza, A. Eweje, E. Kokogho, and P. Odio, "Evaluating Agile's impact on IT financial planning and project management efficiency," International Journal of Management and Organizational Research, vol. 3, no. 1, pp. 70-77, 2024.
A. G. Adeleke, T. O. Sanyaolu, C. P. Efunniyi, L. A. Akwawa, and C. F. Azubuko, "API integration in FinTech: Challenges and best practices," International Journal of Financial Technology, 2024.
D. C. Ayodeji, I. Oyeyipo, V. Attipoe, N. J. Isibor, and B. A. Mayienga, "Analyzing the challenges and opportunities of integrating cryptocurrencies into regulated financial markets," International Journal of Multidisciplinary Research and Growth Evaluation, vol. 4, no. 06, pp. 1190-1196, 2023.
E. O. ALONGE, N. L. EYO-UDO, B. CHIBUNNA, A. I. D. UBANADU, E. D. BALOGUN, and K. O. OGUNSOLA, "Data-Driven Risk Management in US Financial Institutions: A Theoretical Perspective on Process Optimization," 2023.
H. Henriksson and E. W. Grunewald, Sustainability leadership: A Swedish approach to transforming your company, your industry and the world. Springer Nature, 2020.
A. A. Alex-Omiogbemi, A. K. Sule, B. M. Omowole, and S. J. Owoade, "Conceptual framework for women in compliance: Bridging gender gaps and driving innovation in financial risk management," 2024.
O. B. Alao, O. F. Dudu, E. O. Alonge, and C. E. Eze, "Automation in financial reporting: A conceptual framework for efficiency and accuracy in US corporations," Global Journal of Advanced Research and Reviews, vol. 2, no. 02, pp. 040-050, 2024.
L. Amelia and D. Hartanti, "Examining effectiveness of management control system within indonesian anti-corruption agency: a levers of control perspective," Jurnal Ilmiah Manajemen, Ekonomi, & Akuntansi (MEA), vol. 7, no. 2, pp. 821-845, 2023.
A. A. Alex-Omiogbemi, A. K. Sule, B. M. Omowole, and S. J. Owoade, "Conceptual framework for optimizing client relationship management to enhance financial inclusion in developing economies," 2024.
A. A. Alex-Omiogbemi, A. K. Sule, B. M. Omowole, and S. J. Owoade, "Advances in cybersecurity strategies for financial institutions: A focus on combating E-Channel fraud in the Digital era," 2024.
O. Famoti et al., "Enhancing Customer Satisfaction in Financial Services Through Advanced BI Techniques," International Journal of Multidisciplinary Research and Growth Evaluation, vol. 5, no. 06, pp. 1558-1566, 2024.
O. Dudu, O. Alao, and E. Alonge, "Developing innovative financial products for sustainable economic growth," Finance & Accounting Research Journal, vol. 6, no. 11, 2024.
O. Ogunbiyi-Badaru, O. B. Alao, O. F. Dudu, and E. O. Alonge, "The impact of FX and fixed income integration on global financial stability: A comprehensive analysis," Unpublished, 2024.
N. Ochuba, O. O. Amoo, E. S. Okafor, F. Usman, and O. Akinrinola, "Conceptual development and financial analytics for strategic decision-making in telecommunications, focusing on assessing investment opportunities and managing risks in satellite projects," International Journal of Management & Entrepreneurship Research, vol. 6, no. 3, pp. 594-607, 2024.
E. O. Nwulu, F. E. Adikwu, O. Odujobi, F. O. ONYEKE, C. O. Ozobu, and A. I. Daraojimba, "Financial Modeling for EHS Investments: Advancing the Cost-Benefit Analysis of Industrial Hygiene Programs in Preventing Occupational Diseases," 2024.
O. B. Johnson, J. Olamijuwon, Y. W. Weldegeorgise, and O. Soji, "Designing a comprehensive cloud migration framework for high-revenue financial services: A case study on efficiency and cost management," Open Access Res J Sci Technol, vol. 12, no. 2, pp. 58-69, 2024.
N. Y. Hussain, F. I. Babalola, E. Kokogho, and P. E. Odio, "Blockchain Technology Adoption Models for Emerging Financial Markets: Enhancing Transparency, Reducing Fraud, and Improving Efficiency," 2024.
I. Fidel-Anyanna, G. Onus, U. Mikel-Olisa, and N. Ayanbode, "Theoretical Frameworks for Addressing Cybersecurity Challenges in Financial Institutions: Lessons from Africa-US Collaborations," 2024.
T. O. Sanyaolu, A. G. Adeleke, C. P. Efunniyi, L. A. Akwawa, and C. F. Azubuko, "The role of business analysts in driving financial inclusion through product innovation," Finance & Accounting Research Journal P-ISSN, pp. 1555-1581, 2024.
J. Olamijuwon and S. J. C. Zouo, "Machine learning in budget forecasting for corporate finance: A conceptual model for improving financial planning," 2024.
O. Y. Ogunsola, Y. A. Adebayo, I. N. Dienagha, N. Ninduwezuor-Ehiobu, and Z. S. Nwokediegwu, "Strategic framework for integrating green bonds and other financial instruments in renewable energy financing," Gulf Journal of Advance Business Research, vol. 2, no. 6, pp. 461-472, 2024.
Y. M. Soremekun, K. M. Abioye, T. O. Sanyaolu, A. G. Adeleke, and C. P. Efunniyi, "Conceptual framework for assessing the impact of financial access on SME growth and economic equity in the US," Comprehensive Research and Reviews Journal, vol. 2, no. 1, 2024.
S. Michie, L. Yardley, R. West, K. Patrick, and F. Greaves, "Developing and evaluating digital interventions to promote behavior change in health and health care: recommendations resulting from an international workshop," Journal of medical Internet research, vol. 19, no. 6, p. e232, 2017.
S. Dávila-Montero, J. A. Dana-Lê, G. Bente, A. T. Hall, and A. J. Mason, "Review and challenges of technologies for real-time human behavior monitoring," IEEE transactions on biomedical circuits and systems, vol. 15, no. 1, pp. 2-28, 2021.
W. Rodgers and S. Al Fayi, "Ethical pathways of internal audit reporting lines," in Accounting Forum, 2019, vol. 43, no. 2: Taylor & Francis, pp. 220-245.
G. P. P. Coetzee, "A risk-based audit model for internal audit engagements," 2010.
B. Arel, C. A. Beaudoin, and A. M. Cianci, "The impact of ethical leadership, the internal audit function, and moral intensity on a financial reporting decision," Journal of business ethics, vol. 109, pp. 351-366, 2012.
K. S. Pickett, The internal auditing handbook. Wiley Online Library, 2010.
W. W. Eckerson, Performance dashboards: measuring, monitoring, and managing your business. John Wiley & Sons, 2010.
C. Burnay, I. J. Jureta, I. Linden, and S. Faulkner, "A framework for the operationalization of monitoring in business intelligence requirements engineering," Software & Systems Modeling, vol. 15, pp. 531-552, 2016.
W. Duan, N. Hu, and F. Xue, "The information content of financial statement fraud risk: An ensemble learning approach," Decision Support Systems, vol. 182, p. 114231, 2024.
H. Yan and R. M. Wood, "A structural model for estimating losses associated with the mis-selling of retail banking products," Journal of Operational Risk, vol. 12, no. 2, pp. 69-87, 2017.
O. Velcu-Laitinen and O. M. Yigitbasioglu, "The Use of Dashboards in Performance Management: Evidence from Sales Managers," International Journal of Digital Accounting Research, vol. 12, 2012.
J. Reinking, V. Arnold, and S. G. Sutton, "Synthesizing enterprise data through digital dashboards to strategically align performance: Why do operational managers use dashboards?," International Journal of Accounting Information Systems, vol. 37, p. 100452, 2020.
C. Summerill, S. J. Pollard, and J. A. Smith, "The role of organizational culture and leadership in water safety plan implementation for improved risk management," Science of the total environment, vol. 408, no. 20, pp. 4319-4327, 2010.
M. M. Harner, "Barriers to effective risk management," Seton Hall L. Rev., vol. 40, p. 1323, 2010.
S. L. Vrhovec, T. Hovelja, D. Vavpotič, and M. Krisper, "Diagnosing organizational risks in software projects: Stakeholder resistance," International journal of project management, vol. 33, no. 6, pp. 1262-1273, 2015.
A. Armenakis, S. Brown, and A. Mehta, "Organizational culture: Assessment and transformation," Journal of Change Management, vol. 11, no. 3, pp. 305-328, 2011.
S. Chinamanagonda, "Revitalizing Legacy Systems: Proven Strategies for Successful Application Modernization," Journal of Computing and Information Technology, vol. 4, no. 1, 2024.
S. Ponnusamy and D. Eswararaj, "Navigating the modernization of legacy applications and data: Effective strategies and best practices," Asian Journal of Research in Computer Science, vol. 16, no. 4, pp. 239-256, 2023.
A. H. Adepoju, A. Eweje, A. Collins, and B. Austin-Gabriel, "Framework for migrating legacy systems to next-generation data architectures while ensuring seamless integration and scalability," International Journal of Multidisciplinary Research and Growth Evaluation, vol. 5, no. 6, pp. 1462-1474, 2024.
Downloads
Published
Issue
Section
License
Copyright (c) 2024 International Journal of Scientific Research in Science and Technology
This work is licensed under a Creative Commons Attribution 4.0 International License.
