In this podcast, (Risk Assessment Network + Exchange) RANE’s Serina Vash sits down with Azish Filabi, Executive Director, Ethical Systems, to discuss what drives a healthy corporate culture and best practices for creating and maintaining that culture. Through research and collaboration with the best academics in the field, Azish dedicates her time to helping businesses assess and promote ethical behavior and culture in their organizations.
A March 14 New York Times Dealbook article by David Zaring of the Wharton School looks at bank culture from a regulatory perspective and questions why NY FED regulators are taking on the grand task of attempting to make culture and ethics an important part of bank supervision- especially when “creating and regulating culture by regulatory fiat is so difficult.”
Ethical Systems has made fortifying ethical corporate culture a main concentration of our efforts, as there is no better determinant to predicting misconduct. An ethical systems approach to business ethics considers the interplay between corporate culture with considerations for how to motivate individual to be more ethical (nudging),and the regulatory (guiding policies that impact behavior and outcomes).
When examining company culture, leaders should consider whether it is one in which company values are infused into all aspects of the operation, where managers lead by example and teams are encouraged to speak up about ethics and other issues? Or, if it is a culture in which checking the compliance boxes off a list is seen as most important and certain behavior is tolerated by high-performers but not allowed for others?
One challenge identified in academic literature on behavioral ethics and business is finding practical applications for the lessons learned from test environments. All of us at Ethical Systems, including our collaborators and partners, are working on how to best leverage these findings.
This challenge is succinctly presented by Donald C. Langevoort of Georgetown University in a recent article about behavioral ethics and behavioral compliance. As he points out, the lessons from behavioral ethics are intuitive and while the outcomes aren't necessarily predictable, they are often unsurprising. It makes sense, for example, that 'just in time' communications improve ethical decision-making because the reminder of the moral fallout of one's choices become prominent. In another example, Langevoort describes the concept of ethical blind spots- as popularized by two ES collaborators, Max Bazerman and Ann Tenbrunsel- distorting good judgment and sensible decision making.
While talk in August can normally drift to Labor Day vacation plans and how to brew the perfect pitcher of iced tea, a different sort of discussion began to surface in offices (and backyards) across America: that of workplace culture and the different extremes that workers at Amazon report as the norm.
The New York Times article that started it all, "Wrestling Big Ideas in a Grueling Workplace," provided an eye-opening look into the management practices, feedback loops and performance measurement metrics at Amazon, eliciting both accolades and acrimony from current and former employees. After much debate, the dust settled at a realization that the intensity is both a blessing and a curse and tailored for only certain kinds of personalities. An overarching theme was that burnout is common and, to a certain extent, expected.
At a recent banking summit in China, the focus was on how international banks can regain the moral high ground. In response, Norman Chan, chief executive of the Hong Kong Monetary Authority, wrote a piece in the South China Morning Post that argues this will be difficult unless banks move from a shareholder model to a stakeholder focus. At Ethical Systems, we couldn’t agree more.
When companies- especially banks- prioritize short-term profits over the health of their long-term relationships and reputation, they invite ethical problems, long term costs, and the animosity of the general public. Yet, while the call to action is simple, the steps needed to get there are anything but.