It could just be our algorithms, but over the past couple of years there’s been huge increase in the number of online share trading apps advertising across social platforms, YouTube and broadcast/streaming TV, promising quick and easy access to the share trading market.  

Historically, buying and selling shares through a stock broker and getting professional financial advice has been limited to high net worth individuals (with the cost of professional financial advice in Australia ranging from $2000 to $5000-plus per annum). But these apps promise an easy, low-barrier entry point and potential side hustle for people to start buying and selling shares from the comfort of their couch or even their bathroom.  

You don’t need any knowledge of the market and its statistics to start buying and selling at this entry level. As noted in The Ethics Centre’s latest podcast Life and Shares, nearly 5000 Australians opened an online account and started trading in the months after Covid-19 hit our shores, holding their shares for one day on average, with 80% losing money (although most would be classified as ‘toe dippers’ rather than traders). 

The issue is, many of these trading apps are gamified with incentives, like points accumulation and (relatively valueless) gifts or benefits the more trades you make. These companies charge a fee for every trade, so it’s in their interest for customers to make as many trades as possible. Research by the Ontario Securities Commission found that groups using gamified apps, “made around about 40% more trades than control groups.” 

This implicitly encourages day trading, where buyers play on the volatility of the market by buying and selling securities quickly, often in the same day, in the hope of turning a quick profit. 

“The general market wisdom is that time in the market generally beats timing the market,” says Angel Xiong, head of the finance department in the School of Economics at RMIT. 

Day trading flips this by trying to predict rapid price movements based off the news of the day, and this is where it starts to verge into gambling-adjacent behaviour.

Cameron Buchanan, of ASIC accredited online training centre, the International Day Trading Academy, says, “people often treat trading like they are gambling. And the main reason is because most gamblers don’t expect to lose. So emotionally, a lot of us are hardwired to not [want to] experience loss. We want certainty. And if we are coming into the trading markets, there’s a lot of uncertainty in it.” 

Even if you know your stats and have a plan for your buy and sell points, Cameron says, “I know from my own experience, you get so locked into that trade and the emotion is so strong. You don’t want to take that loss because of the hope that the market turns around and gives you that positive feeling.” 

Angel Xiong, Head of Finance in the School of Economics at RMIT, studies behavioural financial biases. “One of these biases is something we call attribution bias,” Xiong says, “which means people tend to attribute their success to strategy and skills, but when they lose money, they attribute it to, ‘Oh, it’s just bad luck’. So in terms of whether they [day traders] have strategy, it is really up to debate.” Consequently, Xiong believes, “stock market trading and gambling in casinos or online betting are very similar.” 

As Ravi Dutta Powell, Senior Advisor at the Behavioural Insights Team, notes in episode 4, “the more that you gamify it, the more it starts to move into that gambling space and becomes less about the underlying financial products and more about engagement with the app and trying to get people to spend more money even though that may not necessarily be in their best financial interests… The real cost is the increased risk of losing the money you’ve invested because you’re making more trades.”  

Addiction specialists, like the clinical psychologist interviewed in episode 3, warn that day traders can develop trading habits that closely resemble gambling addiction. “Certain forms of trading are addictive in and of itself,” the psychologist says. “The more high volatility securities or platforms where you can be in debt to the platform. Those are more risky plays and those can become quite addictive. As somebody who works in gambling, share trading looks identical to that and actually responds to treatment for gambling.” 

“As somebody who works in gambling, share trading looks identical to that and actually responds to treatment for gambling.”

Symptoms of addictive behaviour include developing an obsession with trading, chasing winning streaks, trying to recoup losses, investing larger and larger amounts to chase the thrill, buying into the Sunk Cost Fallacy, and investing money in shares you haven’t properly researched.  

But even if you’re going for “time in the market,” researching your buys thoroughly and buying blue chip stocks, it can still go bad due to that aforementioned “volatility”. Look at the effect of the Covid-19 pandemic on the market, or the stock market crashes of 2002 and 2008, and it becomes clear that no stock is a “sure win”, especially when your emotions are pushing you to avoid a loss and hold on for the market to turn around.  

All you can accurately control, as Life and Shares host Cris Parker puts it in episode 4, is to ask yourself, “What are my values? How much am I prepared to lose?” – and brush up on your financial literacy before you start dropping bundles. 

Life and Shares unpicks the share market so you can make decisions you’ll be proud of. Listen now on Spotify and Apple Podcasts.  

In an era where mud sticks like glue, corporate tolerance has waned to such a degree that the need to keep hard-fought reputations is outweighing respect for human fallibility. 

Careers and hard-won professional reputations built over many decades can come tumbling down overnight after off-the cuff-comments or even private messages sent to a colleague are made public, overshadowing years of hard work.  

And the corporations they work for often seek to condemn, seek a resignation and shuffle talent out the door than chalk it up as an error of judgment, forgive and move on.   

Tasmanian Attorney-General Elise Archer was forced to resign after one leaked message to the media appeared to be an exasperated reference to victim-survivors of child sexual abuse. Archer was not given the opportunity to challenge the claims made against her and is adamant that the messages were taken out of context.  

Another study found 312 news articles about people who had been fired due to a social media post. These included teachers fired after coming out as bisexual on Instagram, and a retail employee let go over a racist post on Facebook.  

While racism was the most common reason workers were fired in these news stories, other forms of discriminatory behaviour included posts about workplace conflict, bad jokes, insensitive posts, acts of violence and even political content. Of course, there’s no doubt of dozens more cases that aren’t even made public.  

Are companies too quick to condemn?

The blurred lines between knowingly behaving unethically at work and comments shared without our permission raises the question of whether corporations are too quick to condemn indiscretions in favour of their reputation. While public trust in elected officials is critical, it’s also important to remember that these officials are also human beings. 

As workplaces are prioritising accountability and ethical standards to ensure safe and productive environments, too often we are seeing errors of judgement costing hard-working professionals their reputation, not to mention their future earning potential after they are ousted from their job.  

It begs the question: What ever happened to an individuals’ right to make a mistake and for the rest of society not to leave them out in the cold forever? Have we come to a point where our inner thoughts and feelings shared in private are indicative of our ability to do our job?  

Where we draw the line

Despite private messages being made public costing people their jobs and reputations, career coach Renata Bernarde believes that private messages should remain private and usually aren’t a true reflection of our ability to do our job.  

“When leaked, we can see that private messages can offer glimpses into someone’s personal thoughts and feelings, which might be expressed without the filter they would use in a professional setting. That said, if private messages reveal behaviours or beliefs that directly contradict the values and responsibilities of their public role, it’s a valid concern. For instance, a diversity and inclusion leader advocating for equality should not have private messages showcasing prejudice.”  

However, Bernarde urges corporations to avoid blanket penalties, saying we need to be cautious about using isolated messages out of context to vilify individuals. “It’s essential to consider the entirety of the person’s character and contributions,” she says.  

The art of corporate forgiveness

There are occasional cases of corporate forgiveness. Western Australian man Cameron Waugh was charged with six counts of insider trading and was released on bail. He has since appointed the interim CEO of a company that’s obviously deemed his skills more valuable.   

While forgiveness and the opportunity to secure a new job after misconduct is complex and multifaceted, human resources and emotional resilience expert Shane Warren says that it’s important that workplaces acknowledge that making a mistake pertains to the psychological and emotional harm caused by actions that violate one’s deeply held moral beliefs. 

“Any doctrine of faith reminds us that human fallibility is an inherent part of our nature, and the capacity to make mistakes is universal. The idea that an individual who has ‘stuffed up’ should not be punished indefinitely for errors resonates with our core principles of fairness and modern desire to embrace personal growth.”    

However, Warren admits that balancing the need for accountability with the recognition of our humanity can be challenging. Nevertheless, fostering a culture of learning, growth and restorative justice can help strike a more equitable balance between accountability and compassion in any workplace, he says. 

The process of forgiveness and reintegration into the workforce should ideally involve steps such as acknowledging wrongdoing, seeking rehabilitation or counselling, demonstrating genuine remorse and showing a sustained commitment to personal growth and ethical behaviour. The timing for a new job may vary depending on individual circumstances and the severity of the misconduct, he says.  

“Perhaps instead, society needs to bear in mind that everyone is fallible. If indiscretions or mistakes happen, when addressed and an apology is allowed to be given, it can lead to greater resilience, better understanding and personal and professional development.”  

Corporate Australia is having a rough time in 2023.

PwC made headlines for selling out Australian citizens by flogging details of the government’s tax avoidance schemes to potential corporate tax avoiders. Qantas has been raked over the coals for, amongst other things, lying to customers and illegally sacking workers. Elsewhere corporations are pilloried for scandalously excessive executive pay, Dickensian industrial relations standards, wilfully aggressive tax avoidance, and heartless profiteering.  

Research by the market researchers at Roy Morgan recently revealed that the level of trust Australians have in corporations is at the lowest it has ever been since they started measuring it. The downward trend started with COVID but has been in free fall since the middle of 2022. Roy Morgan CEO Michelle Levine describes what is going on as the result of ‘moral blindness’ of corporations.  

There is an apparent irony in play. Today’s corporations are accused of this moral blindness, while many publicly embrace ethics by taking increasingly active roles in important matters of public purpose and social impact. Corporations are weighing in on a variety of crucial political issues, such as the Indigenous Voice to Parliament, LGBTQIA+ rights, and the climate crisis. 

Business as a force for good?

In the era of ‘woke capitalism’ the business world seems to feel little cognitive dissonance, let alone hypocrisy, about parading their ethical credentials in public while acting like ruthless and exploitative profiteers in the market. Being economically exploitative and socially progressive is the name of the game for many corporations.

The socially progressive position regards businesses as having the potential to be a ‘force for good’, especially by adopting progressive positions on social and environmental causes. Think of Qantas’ ‘pride flights’, PwC’s commitment to social impact, or the broad adoption of diversity and climate change initiatives by businesses of all kinds.  

Many regard corporate engagement with political causes as being genuinely motivated by ethical care for their ‘stakeholders’. This view is not universal. Others see corporate activism as comprising of shallow, inauthentic and self-interested grandstanding. Between green-washing, woke-washing and virtue-signalling, corporations have been accused of using ethics to feather their own nests.  

Yet others see corporate social and environmental engagement as incontrovertible evidence that CEOs have been held captive by radical left-wing activists. By this account weak-willed executives are being exploited by nefarious militants trying to use corporations as a Trojan Horse to infiltrate mainstream society.  

The ‘vile maxim’ of corporate selfishness

Whichever position you might be aligned with, so-called ‘woke’ practices are in apparent contrast to the exploitative and ruthless competitive behaviours of companies like Qantas and PwC that have contributed to the demise of trust in corporations. When it comes to business, the ethical principle at play is akin to what, many years ago, economist Adam Smith condemned as the ‘vile maxim’. As he wrote in The Wealth of Nations back in 1776: 

“All for ourselves and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind. As soon, therefore, as they could find a method of consuming the whole value of their rents themselves, they had no disposition to share them with any other persons.” 

It is clear that many people running businesses today are enthusiastic followers of this vile maxim. To suggest this is ‘moral blindness’ can be misleading because (no matter how vile) there is an ethics at play here, and one that is widely accepted. Ayn Rand notoriously championed such an ethics as being beholden to ‘the virtue of selfishness’. By Rand’s account, pursuing self-interest is a valid, if not desirable, moral position. She stood against sacrifice as being a moral principle, instead seeing merit in “concern with one’s own interests”.  

Free market capitalism was, for Rand, an ideal manifestation of her ethics. This all suggests that selfishness is not moral blindness, it is part of an ethical system that drives much business behaviour. It is also the ethics that is at the heart of Australia’s lack of confidence in the corporate world.  

How to build trust

Between the twin poles of ‘woke capitalism’ and the ‘vile maxim’ we have something of a corporate identity crisis. Increasingly selfish profit-seeking in the economic sphere is matched with attestations to the pursuit of public good in the social sphere. That is not to say that all companies are vile or woke, clearly many are not. It is a fair call that enough of them are that it has led to a breakdown of public confidence in corporate Australia.  

What does this all mean for how Australian corporations can build public trust? One answer is resolving their identity crisis by truly embracing and communicating the role of business in a liberal-democratic society. While businesses are responsible for returns on capital investment, that is neither their sole nor primary purpose. Neither is supporting progressive social positions without concern for the economy. 

In its present condition Australian corporate capitalism is characterised by skyrocketing economic inequality, excessive executive pay, inflation fuelled by profiteering, and increasingly precarious employment. That Australian citizens do not trust corporations is an entirely rational assessment.  

Corporate Australia’s challenge is to actively recognise and pursue its real social purpose. This purpose is about driving innovation and economic growth for shared prosperity, providing meaningful and secure jobs with decent pay, paying taxes that fund public services, as well as ensuring investors get a reasonable return.

Rebuilding trust is simple. What remains to be seen is which of Australia’s fallen corporations will have the courage to abandon their attachment to the vile maxim.