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Featured Ethics [and Sustainability] Scholar for January: Tensie Whelan

Interview with Tensie Whelan, Clinical Professor and Director of the Center for Sustainable Business at NYU Stern

 

Why was now the right time to launch the Center for Sustainable Business here at Stern? Why was Stern the right home for this important center? 

Business manages the majority of the resources on the planet.  In the US, for example, business is responsible for $18 trillion of GDP and government and civil society $3 trillion. If we wish to solve the environmental and social challenges before us, we need business to play a leadership role. Stern, with its location in the world’s financial center, and its award-winning faculty and students who are focused on finance, can play a unique role in addressing the structural problems of shareholder capitalism and the Center for Sustainable Business can assist the transition to a capitalism better suited to the needs of the 21st century.

The moment is right because a growing number of business leaders such as Paul Polman at Unilever, John Mackey at Whole Foods and Larry Fink at BlackRock are questioning the benefits of short-termism and are turning to their broader purpose in society.  These business leaders need research, networks and employees who can help them on this journey and CSB can be a key partner.

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Crosspost: The (Il)legitimacy of Compliance?

Cross posted from NYU Law's PCCE's Compliance & Enforcement blog.

 

Each new compliance scandal triggers something of a “what were they thinking” response among those who consider it self-evident that sensible people inside a business organization would try hard to avoid behaviors that can bring such serious legal and reputation harm.  So it is with the current subject of fascination, Wells Fargo. “Salespeople” (many of whom were branch employees serving customers’ basic banking needs) created millions of unauthorized customer accounts of various sorts in order to generate fee revenues.  While some corporate legal violations are implicitly blessed from above because any sanctions can be seen as just the cost of doing business, such was probably not the case here.

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2016 End of Year Letter from Jonathan Haidt

Dear Friends:

2016 has been a year of extraordinary change. Many of these changes make our mission – to help companies strengthen their ethical cultures using behavioral science research – more vital than ever.

Consider just these three facts:

  1. Populist movements around the world are usually antagonistic towards large corporations, which they often perceive as engaging in predatory behavior
  2. The recent U.S. election likely means a new and lighter-touch approach to regulation and compliance, particularly in the financial services industry
  3. The Brexit vote means that Britain must quickly decide upon its own approach to regulation.

Putting these together: The world is hungry for new ideas on how to improve business ethics in ways that do not rely as heavily as before on detailed rules formulated by legislatures and regulators. There is a desperate need to help businesses become more self-regulating, in ways that will protect multiple stakeholders while increasing the dynamism and profitability of the business.

That is exactly what Ethical Systems is doing and we have made great progress towards our goals this year.

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2016 Collaborators in the News: A Year of Many Achievements

2016 was a year of many achievements for our growing collaborator network. We invite you to browse a highlight list of the research, articles, appearances and talks that helped advance our mission and promote a greater understanding of ethics, decision making, and ethical systems design.

Browse our collaborators and their highlights and achievements from this year >>

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MBA: Means Being Aware to Short-Termism

It takes a commitment to business and a desire to better oneself that motivates earning a Master in Business Administration. The degree is seen as a passport to financial success and business leadership, a necessary piece of the puzzle should you want to attain keys to the executive suite.

Yet, a new study by Danny Miller, research professor at HEC Montreal and Xiaowei Xu, an assistant professor at the University of Rhode Island shows that for MBA-holders who go on to lead companies and achieve a level of recognition in mainstream media, self-interested behavior becomes more apparent and their firms can suffer as a result.

Acknowledging that earning an MBA does not cause people to be any less reliable, honest or ethical than others, Miller and Xu’s findings have implications for executive compensation, the dangers of short-termism and how the drive to be distinguished among peers may create a blind spot when thinking about other areas of the business.

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Ethical Systems Design: Crosspost from AuditFutures

ethics-conf-p2Cross posted from the AuditFutures Blog. See original post here.

 

On 23rd November, we hosted a conference exploring the concept of organisational culture and what systemic approaches we can take to foster ethical culture within organisations, particularly professional service firms. This interdisciplinary conference engaged around 100 leading international academics, business leaders and accounting professionals in a holistic discussion on the significant role of culture in organisations.

The event built on our Future Firms project which explores in a systemic way the interdependencies of the different aspects of the firm: culture, governance, technology, services, structure, and people and what this means for the future of .

Our Ethics by Design Conference explored the key challenges and trends, faced through the interaction between the three levels of employees, the organisation and society. Participants explored the possible design ideas that can be implemented to work towards overcoming these challenges and forming a more ethical culture.

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Featured Ethics Scholar for December: Dennis Gentilin

Interview with Dennis Gentilin, Whistleblower, Author and Consultant on Corporate Citizenship

 

What are your main areas of research/work?

Let me begin by stating that I don’t see myself as a scholar (at least not formally). However I do see enormous value in using the findings and tools from the social and behavioral sciences to help address the ethical challenges facing the business world. This is one of the many reasons I am a big advocate of Ethical Systems.

As one would expect given my experience and background (outlined below), my primary area of interest is employee voice and speak up cultures. What my experience showed me is that even the best “formal systems” (rules, regulations, compliance and other such artifacts) have shortcomings. The best (and arguably the only) way to overcome these is to nurture the “human systems” within organizations. A speak up culture is a core component of this latter system.

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The UK’s Banking Standards Board: Should a US model follow?

I recently returned from a trip to London, where I spoke about the role of ethics and culture in organizations with varied, leading professionals. My meeting with the Banking Standards Board (“BSB”) stands out as a potential model for what financial services firms in the U.S. could emulate.

The BSB is a non-profit organization, established by the industry in the wake of the 2008 financial crisis to address core challenges relating to the culture of banking, and help restore the industry’s trust and reputation.

To raise standards of behavior in financial services, the BSB began with a comprehensive analysis of the current standards for culture, the details of which are provided in their 2015 assessment report, identifying themes relating to norms within the banking industry. After conducting assessments at individual firms, and extrapolating common themes, they plan to use these as the framework for future work plans. This assessment creates a baseline so that firms and the BSB can then measure the impact of reform efforts, both internal ethics programs and industry and regulatory initiatives, over time. As I’ve written in previous blog posts, evidence-based ethics research and culture measurement are key to determining what works to drive more ethical behavior in organizations. In order to improve culture, researchers need to help firms better measure their culture and track changes in indicators over time. The BSB has taken a vital step towards this goal.

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Bias Among Choice Architects: On psychology and regulation

In their seminal work on `nudges,’ Cass Sunstein and Richard Thaler have made a tremendously influential contribution to academic policy research and to practical policy.  They insightfully describe how to improve people’s saving, consumption, and life choices by improving the `choice architecture’ (the structure and framing) of decision problems. Specifically, the idea is to help people who are subject to psychological bias—i.e., just about everyone—make better choices.

                Sunstein and Thaler emphasize that this can often be achieved without coercion, a policy strategy which they call `libertarian paternalism.’ Over the last decade, Sunstein and Thaler and their followers have devised many ways in which the lives of people can be improved by seemingly modest and non-invasive tweaks in individual choice problems. Just think about whether people would eat as much candy if it were only found in the back of supermarket aisles. It is no accident that it is also prominently displayed at the checkout stand where hungry shoppers must stand around staring at it. Who wouldn’t want an improvement on that choice architecture?

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Featured Ethics Scholar for November: Beverly Kracher, PhD

Interview with Beverly Kracher, Robert B. Daugherty Chair and Professor in Business Ethics & Society and CEO / Executive Director of the Business Ethics Alliance in Omaha, NE

What are your main areas of research/work at Creighton University?

First, let me tell you what I’d like to do. Before I retire or die, I’d like to collaborate with musicians to create a set of positive business ethics jingles that stick in our brains as much as the Oscar Mayer Baloney song (of course, since Oscar Mayer doesn’t resonate with everyone, we’d need to identify the jingles for each part of the world).

However, I haven’t found the musicians who want to work on this project yet. So, recently I have spent my time on city-level business ethics as Executive Director/CEO of the Business Ethics Alliance.

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