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New Evidence in Favor of Active Internal Whistleblowing

Over two decades ago, two of the largest corporate bankruptcies in U.S. history sprung up one after another—first Enron, then WorldCom—after the companies became mired in accounting and financial fraud.  In 2002, in response to these ethics breaches, President Bush passed the Sarbanes-Oxley Act, which established many of the internal controls now common in U.S. […]

Data & Behavioral Science: a new approach to risk management

I recently sat on a panel at an event hosted by Ropes and Gray LLP in connection with the launch of their new report, Data & Behavioral Science: a new approach to risk management.  The report summarizes survey results from 300 senior executives on the topic of compliance and behavioral science approaches to risk management.   […]

Trying to solve an ethical dilemma? Start with changing your mindset

Companies wishing to give employees an effective decision-making framework to confront ethical dilemmas now have a new tool in their arsenal.    Recent findings from researchers Ting Zhang, Francesca Gino and Joshua Margolis provide insight for corporate communications programs as well as middle managers.  In a paper published in the Academy of Management in June […]

Featured Expert Interview: Noel Boyland, on well-being, higher purpose, and connecting companies with the research community

Featured Expert:  Noel BoylandScreen Shot 2018-07-17 at 3.48.38 PM_0_0_0.png

What are your current areas of work and research?

I’m currently involved in several somewhat overlapping activities.  First, I am working with Duke University’s Center for Advanced Hindsight, founded by ES collaborator Dan Ariely, on a project involving the development and deployment of a peer-to-peer fundraising platform that will be used to co-fund health insurance for low income Kenyans.  This platform will incorporate the latest insights in behavioral science as it relates to altruistic behavior as well as serve as an experimentation platform to test hypotheses as to what features are most effective and then integrate those new insights.

New paradigms to tackle age-old governance problems

This article was originally published on the Thomson Reuters Regulatory Intelligence service, found here Since the creation of the modern corporation as a form of business, the issue of opportunistic behavior by managers has plagued shareholders. But new approaches to guiding behavior are offering alternatives to common governance failures. Most governance arrangements have grappled with […]

Middle Meddling: Management and ethics

Goal setting is often a subject of discussion about behavioral ethics and internal programs.  We’ve seen in recent cases such as at Wells Fargo and Volkswagen how cheating and lying become the norm when performance goals are not reasonably achievable.  Recent evidence in a paper by Niki den Nieuwenboer, João da Cunha, and ES collaborator Linda Treviño shows the internal dynamics and processes that lead directly to cheating behaviors.  

 

The researchers, one of which was embedded inside the company, observed managers and sales staff over 15 months at a large (10,000 employees) telecommunications company.  The company had established goals for its desk sales teams designed to motivate productivity, including a target for sales as well as sales-related work, such as making cold calls to customers, and gathering information about potential customers, among other planning activities.

Azish Filabi Presents on Measuring Corporate Culture at the 2018 OECD Conference

Last week, the Organisation for Economic Co-operation and Development (OECD) had its annual Anti-Corruption and Integrity Forum at their headquarters in Paris.  Entitled Planet Integrity: Building a Fairer Society, over 2,000 attendees discussed how integrity plays a role in improving economic inequality, enhances the benefits of public policies and government programs, and more broadly equalizes the gains of globalization.

Ethical Systems won one of the OECD Research Edge competition awards. The paper, co-written by Caterina Bulgarella and myself, provided the summary of our culture assessment framework, which demystifies an often complex organizational issue: how to define and measure ethical culture. 

COMMENTARY: Safeguarding financial ­firm cultures: five focus factors for directors

Board members have the difficult job of overseeing the success of a firm without getting involved in day-to-day management or operations.  Increasingly, they are expected to understand compliance and other risks of misbehavior, particularly as those risks have been shown to impact financial performance.

In a commentary I co-wrote with Mike Silva, Partner and Chair of the Financial Services Regulatory practice at DLA Piper, we emphasize the role of corporate culture in promoting good behavior as well as financial stability.

NY Fed Offers New Insights for Financial Services Firms

There are two new resources on the Governance and Culture Reform site of the Federal Reserve Bank of NY that highlight the regulatory trends with respect to managing culture in financial services firms. 

The first is a transcript from an event at Thomson Reuters on February 7, 2018, which was a moderated discussion among Bill Dudley (President of the NY Fed), Bill Rhodes (WR Rhodes Global Advisors), and Ellen Alemany  (Chairwoman and CEO of CIT Group), moderated by Rob Cox (Reuters News).  The panelists covered a wide array of matters relating to the topic of Banking Culture:  Still room for reform?

Dudley highlighted that while some progress has been made, there’s still much room for improvement.  For example, the NY Fed has proposed a banking registry to keep track of whether employees have left their jobs for reasons of fraud or other misconduct.  This would address the so called “rolling bad apples” problem, whereby companies may inadvertently hire a rogue employee of another firm because employment law discourages employers from sharing potentially derogatory information about former employees.  He mentions that the U.K. has perhaps made more progress on this matter, having already established a similar registry.

Prioritizing Social Responsibility in Companies: A coming firestorm?

In a development that Andrew Ross Sorkin of The New York Times believes will cause “a firestorm” in boardrooms across the country, Larry Fink, the CEO of BlackRock has sent a letter to the chief executives of the world’s largest public companies urging them to prioritize their company’s social responsibilities.

Sorkin writes that this is likely to be a watershed moment for American companies, given BlackRock’s position as one of the largest investors in the world with more than $6 trillion under management through 401(k) plans, exchange-traded funds and mutual funds.