Glossary term
Misconduct
Subject: Governance, Ethics and Conduct
Also known as: Wrongdoing, Malpractice
Misconduct is behaviour by a member of an organisation or profession that breaks its rules, the law or accepted standards, such as fraud, harassment, falsifying records or abuse of position.
Explanation
The word covers a range, from minor lapses such as repeated lateness to gross misconduct such as theft or violence, which can justify dismissal without notice. Professional misconduct applies to doctors, lawyers, accountants and others whose licensing bodies can suspend or strike them off. Malpractice is the label often used for professional failure, such as negligent treatment or advice, and is common in medicine and law; it sits within misconduct here. In finance, regulators use the term for mis-selling, market abuse and rate rigging. Organisations deal with it through reporting channels, investigation, a fair hearing and sanctions in proportion to the breach. Case records help spot patterns. Discipline built on a vague rule is easy to challenge, so policies spell out which acts count as misconduct.
Example
A relationship manager at a bank changes customers' contact details to his own number so that he can approve their online transactions. A reconciliation check spots many accounts sharing one phone number. HR and internal audit investigate and confirm the manipulation. The bank dismisses him and reports the case to the regulator.
Not to be confused with
- Conduct Risk
- Conduct risk is the chance that behaviour harms customers or markets. Misconduct is an actual breach that has happened.