The Hayne banking royal commission spent a year dragging the finance industry through the wringer for unethical, criminal and predatory behaviour.

The shocking findings emerging from the commission left many wondering whether bankers had any ethical guidelines.

In fact they did. It was called the Banking and Finance Oath and was implemented in 2013. It is an ethical code that is voluntary for bankers to sign up to, has no enforcement teeth and has never pinged anyone for misconduct.

It was put together under the auspices of business ethicist Simon Longstaff of the Ethics Centre, who now says it has been ineffectual.

Few have joined

“There’s been a relatively low take-up. If it had a mass membership of tens of thousands then it would have held people to account and much of the reprehensible behaviour unearthed by Kenneth Hayne’s royal commission could not have occurred,” Mr Longstaff said.

The oath is as follows:

The oath is voluntary and signed up to by individuals rather than by the banks themselves. The big banks all have compulsory codes of practice their employees must sign onto, but they also didn’t prevent the behaviour Commissioner Hayne unearthed.

Just how many people have signed on to the voluntary oath is not altogether clear.

Cris Parker, a board member of The Banking and Finance Oath, says there are more than 3000 members but only 1278 are listed on its site. The differences result from the fact that people enter and leave the industry regularly and it is difficult to keep up with Oath membership details.

Ms Parker says the oath aims to “create a common language around ethics”. Individuals can bring breaches to the attention of the oath. It then appoints a three-person panel to investigate.

“People can recognise what they have done and change their behaviour,” she said.

Nobody has been rubbed out

In the almost six years it has been in existence no one has been expelled for code breaches, but investigations have been activated “a few times”, Ms Parker said.

Observers say the oath doesn’t improve behaviour.

“We welcome any efforts to bring ethics to the finance sector. But for a system to work you need rules that work, are monitored and are enforceable,” said Erin Turner, campaigns director at Choice.

“If someone breaks the oath something has to happen, otherwise it’s not worth the paper it is written on.

“The royal commission certainly shows there needs to be an improvement in standards in the industry. But an oath needs to trigger actions, not just words,” said Katherine Temple, policy director at the Consumer Action Law Centre.

The big banks have supported the project and their bosses have signed on after former Commonwealth Bank chief Ian Narev was embarrassed in 2016 by telling a parliamentary committee that he hadn’t thought he needed to.

“The sole reason that I haven’t agreed to date is not that I don’t agree with the content … my view is that the day I took the job, I signed up for that. So I took a personal decision that it’s not something that I would do.”

The Dutch version has teeth

The Banking and Finance Oath was actually the first of its type in the world.

News of it travelled to Europe and a Dutch delegation came to look at it. But the Netherlands took a vastly different approach to Australia, making it compulsory and introducing legal sanctions to enforce it.

That approach is not favoured by Ms Parker: “If it becomes compulsory, there are compliance and technical issues.”

Members pay $20 a year for oath membership and signatories are from across the finance sector.

But sector giants CBA and NAB have very few members, while Dutch group Rabobank and Westpac have higher representation.

Mr Longstaff said the reluctance to join could have been a result of bankers feeling conflicted about their actions.

“Was it that people felt hypocritical if they signed up, or that it would have been too complicated with the banks charging fees for no service?” he said.