Ethical Values, Human Dignity & Economic Decisions: Royal Commission

This essay critically analyzes the role of ethical values and human dignity in economic decision-making, drawing upon a recent article concerning the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, specifically focusing on Freedom Insurance. It identifies key ethical issues such as breaches of anti-hawking laws, unfair sales tactics, and the prioritization of economic interests over customer well-being and human dignity. The analysis applies ethical theories like deontology and utilitarianism to critique the business practices discussed in the article, highlighting the failure of companies to fulfill their duties and create overall social utility. The essay concludes that businesses must prioritize ethical conduct and stakeholder interests to achieve long-term success and societal appreciation, as demonstrated by the regulatory scrutiny resulting from unethical practices exposed by the Hayne Commission.

Economics
Role of ethical values and human dignity in economic decisions

LINK OF ARTICLE: https://www.canstar.com.au/life-
insurance/royal-commission-life-insurance-sales-tactics-
know/
Introduction
Values and ethics are fundamental to any organizational operations, be it for not for profits
purposes or the profit making entities (Woiceshyn, 2011). The terms values and ethics are
very broad terms and includes a number of incidental concepts. With the increased
complexities and globalisation in business operations, there has been consistent requirements
for the business houses to be considerate of the interests and needs of not just owners of the
entities, but also the different stakeholder groups. The recent Royal Commission inquiries
have yet again turned the attention towards the adoption of the ethical business practices in
the business activities to preserve the human dignity and an overall wellbeing of the
communities (Hutchens, 2018).
The following work is aimed at evaluating the role of and the various aspects related to the
ethics and values in the economic decision-making by the enterprises. The following work
would evaluate an article in relation to the entity Freedom Insurance in Australia.
Discussion concerning ethical issue involved
The term ethical values signify the set of the moral guidelines that guide the conduct of the
individuals in various situations. In context of the businesses, there exist a set of basic
principles that govern the acts, and policies of the enterprises. These aid the businesses to
differentiate between the right and the wrong (Scalet, 2018). The Banking Royal Commission
inquiries are regarded as one of the remarkable steps on the history of the Australian
corporate climate, as the same not only raised questions into unethical conduct of the
numerous business entities, but also provided a set of the recommendations for the future
business conducts (Barrett and Pandey, 2019).
The article revolves around the business practices of the business entities in the Insurance
sector of the country. The entity Freedom Insurance is known to be one of the most popular
insurance sector company in Australia, whose business model was mainly based on sales of
the insurance products with the strategy of the outbound calls. The entity’s business practice

and that of the other companies’ came into light during the sixth round of hearings on day 51
of commission inquiries, and the article provides a summary of the said practices employed
which is detrimental to the interests of the customers (Han, 2018).
Some of the chief tactics as listed in article as explained as follows. The insurance industries
would adopt the “fair enough” questions into their sales tactics, which is regarded as a
potential breach of the criminal anti-hawking laws, as they try to woo the customers to buy
their products. Thus, the first issue highlighted in the article is that while the generic ethical
principles makes it mandatory for the entities to abide by the applicable legal rules, the
companies in the insurance sector repeatedly breached the same for their economic interests.
The further business practices as highlighted in the articles are the use of the emotive and
intrusive questions to the customers to convince them for the insurance policies, use of the
cornering techniques, and further giving no time to customers to think, thereby leading them
to buy the policies. Thus, the second issue highlighted the unfair sales policies by the
companies for their economic interests, which completely led to the sidelining of the
consumers right to be completely informed and aware of the terms and conditions of such
complex insurance products. Thus, the companies placed their economic interests above the
societal interests as depicted by the unhealthy sales techniques. The third and most important
issue highlighted in the article was the company’s overall policies with regard to the sales and
the remuneration of the employees, which led to the unethical business practices and
detriment to the human dignity. The same is highlighted through the case study of the
company Freedom Insurance, where the company in one instance sells a life insurance policy
to the son of a customer who was suffering from a mental illness namely the “down
syndrome.” The case is important as was heard by the Royal Commission as well and
highlighted the fact that employees were heavily engaged in unethical sales practices. In the
mentioned case, as the article highlights that while the sales employee were aware of the
condition of the individual on the call. In addition, the fact that other individual was not able
to understand and evaluate the terms of the policies as told, yet the insurance policy contract
worth $10.60 fortnightly payments were sold to him on the phone call. Thus, the case is
descriptive of the aggressive sales culture at the entity business environment and the policies.
The issue significant here is that while the customer’s interests are already not been
considered as efficiently, as they should have been, further the employees are induced to
adopt the said procedures in the light of the provision of the incentives, awards and other
internal recognitions for the high sales. Thus, in order to avail such rewards, the employees of

the entities belonging to the finance and insurance sector sell products without paying heed to
the customer’s sentiments, moral principles and human dignity.
Underlying concepts/theories relevant to article
A number of ethical theories have been established over the years, to guide the individuals
and the organisations. One such ethical theory that is significant to be noted in relation to the
mentioned article is the ethical theory of deontology. The philosopher Immanuel Kant has
developed the said theory which centres on the fact that one must perform the duties
religiously irrespective of the overall outcomes of the actions (Vadastreanu, Maier and Maier,
2015). Applying the principles of the ethical theory of deontology on the stated circumstances
in the article, it can be stated that the companies have been consistently failing to perform
their duties which includes complying with the legal rules such as anti-hawking laws,
competition and Consumer Act and others. In addition, the duty to provide full and relevant
information to the customers has also not been complied with and duty to educate and guide
the employees of the entity has also been ignored, in the efforts to earn the economic profits.
In contrast to the above theory is the theory of utilitarianism in context of business, which is
focussed on creation of happiness and utility as a whole, from the economic activities. On
application of the stated theory it can be further stated that the interests of the various
stakeholder groups such as the customers, regulators, investors have not been considered
while designing the overall policies of the enterprise who faced the inquires. While, the said
organisations maintained their chief objective to earn the profits and provide long term
wealth and goodwill to the shareholders and managerial groups, the other groups have been
left out. Thus, there lies no social utility as a whole in the mentioned tactics and business
policies.
General critique of the article
The article presents a detailed insight about the culture and policies of the popular business
entities like Freedom Insurance and others covered in the insurance sector. There is a strong
agreement with the fact in the article that the same highlights the unethical sales culture in
one of the most renowned business sector of the country. The article minutely covers the
various aspects of the ethics, values and human dignity which is the prime need of the
businesses, as the business derive their resources from the society, so there lies an ethical

obligation to pay back and share the rewards. Thus, the article highlights the chief reasons of
why the insurance sector came under the radar of the Royal Banking Commission.
Conclusion
The discussions carried on in the previous parts, enable to reach the conclusions that it is the
primary duty of the entities to facilitate the overall wellbeing to the society as they thrive to
earn the economic profits. The ethical critique of the article shed light on the various
unethical practices employees by the enterprises in spite of the prevalence of the statutes in
this regard. The article highlights the roles of the senior management of the companies
towards the advancement of the rights and interests of the various stakeholder groups. The
conduct of the inquiries by the Hayne Commission depicts the fact that necessary steps would
be taken by the regulators if the entities fail to consider the human values and ethical conduct
in their profit earning motives. Hence, it can be concluded that in order to succeed in long run
and avail an overall appreciation from the society, it is vital for the business enterprises to
adopt ethical business practices in earning profits.

References
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