New Metric for Financial Performance: Return on Integrity

A recent CFA Institute article discusses what integrity means in the financial industry and the role it plays in performance results.

The article quotes Rob Lake, founder of London-based consulting firm Authentic Investor, who argues that integrity should be a central factor in today’s investment decisions: “Integrity for an investment professional now means paying full attention to the impacts of the way we invest—climate change, human rights, diversity—the whole agenda of ESG and the UN Sustainable Development Goals…we have mounting evidence that investments with this lens generate superior financial returns.”

Marelen Norgaard Carolus, CEO of Danish fintech company MyBanker, says, “We are seeing a paradigm shift where millennials, women, and entrepreneurs are now valuing integrity. They want something different from their banks and in society.” She believes that the focus on integrity results in investors being happy with lower returns because they value strong ethics and “Return on Integrity.” 

Paul Ross of LONDON Advertising says, “It’s no marketing secret that integrity plays a critical role in how you go about building relationships with consumers—and that translates indirectly to financial performance.”

The two versions of ROI, the article concludes, don’t have to be unaligned. “Whether we are talking about leading with personal ethics or corporate brand reputation, Return on Integrity will be the new metric for financial performance.”