Azish Filabi's blog

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

Featured Expert:  Noel Boyland

What are your current areas of work and research?

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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.

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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.

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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. 

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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.

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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.

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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.

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Ethical Systems Files Amicus Brief in Defense of Internal Whistleblowers

This post originally appeared on The FCPA Blog. It is cross posted here.

On November 28, 2017, the Supreme Court will hear arguments in Digital Realty Trust v. Paul Somers on the question of whether the whistleblower protections of the Dodd-Frank Act extend to internal whistleblowers, or only to those who report to the SEC.

Research shows that the majority of employees who report misconduct do so internally, through informal discussions with managers and other conduits.  If the Court interprets the Act’s protections as extending only to those who provide information to the SEC, it could stymie and complicate the important work of ethics & compliance ers.

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[Updated] The Ethics Case for Due Diligence: Azish Filabi's New "Expert Analysis" on Law360

The case for business ethics was recently made very clear to me when I co-chaired at the New York State Bar Association International Section’s Seasonal Meeting in Guatemala, particularly as it relates to hidden ethics risks in M&A transactions.  I wrote a piece for the Law360 site as part of their "Expert Analysis" explaining these risks.  It's a case study about A.P Moller-Maersk who purchased a port in Guatemala in 2016 just before it became embroiled in a corruption scandal, eventually adding another $43M to their acquisition costs to get a new, clean permit.

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Featured Business Ethics and Compliance Expert: Azish Filabi

Interview with Azish Filabi, CEO of Ethical Systems

 

As the CEO of Ethical Systems, what keeps you motivated? Are you optimistic about the current state of business? 

I am motivated every day by the opportunity to connect businesses with research and strategies that will make them more ethical and productive for the long term. We at Ethical Systems believe that good ethics is good business and our mission is to strengthen ethics within organizations by providing content, resources and tools by which to improve internal cultures and climates. It is rewarding to know that our organization is playing a needed role, and connecting with like-minded professionals.

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