Azish Filabi's blog

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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Azish Filabi Interviewed by the American Marketing Association

Ethical Systems CEO Azish Filabi, was interviewed in a far-reaching discussion with Hal Conick published on Marketing News, a publication of the American Marketing Association.

In the piece, which covers both the components and traits of an ethical leader as well as how to make ethics front and center in the hiring process and how marketers can be more ethical, Azish connects research with practice, helping identify academic reference points to confirm potential, and profitable, strategies.

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A New Paradigm For "Just" Business: JUST Capital publishes its research results

In 1970 Milton Friedman wrote a now famous essay in the NY Times Magazine declaring that the social responsibility of business is to increase its profits.  Since then, writers and researchers have been debating whether this accurately reflects the responsibilities of business in society.  In the decade since the Global Financial Crisis these debates have become particularly critical, with some participants questioning the basic principles of free market capitalism and whether they serve our current societal needs.


But what if the best way to do right by shareholders was to run a socially responsible business? 


New findings by JUST Capital are showing that this is often the case.  JUST Capital is a non-profit research organization whose mission is “to build a more just marketplace that better reflects the true priorities of the American people.”  Their distinctive research approach began with a survey of the U.S. public on what they believe makes a “JUST” company.   

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Are We In a Compliance Arms Race?

Over at the NYU Law's Compliance and Enforcement blog, ES CEO Azish Filabi has written a guest post on whether companies are in a compliance arms race-- and the detrimental impact it can have on organizational culture and ethics.

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Is Your Legal Department Creating Organizational Risk?

This piece, written by Ethical Systems CEO Azish Filabi, was originally published on The FCPA Blog and is cross-posted here.


At the 2017 Global Ethics Summit, put on by the Ethisphere Institute, Caroline Rees of SHIFT spoke on a panel about business and human rights.

When asked about differences in stakeholder management approaches between European and U.S. businesses, and why U.S. companies are not as far along as their European counterparts, she highlighted that U.S. lawyers have a more dominant role. 

When business leaders want to audit their supply chain, for example, lawyers often warn against such initiatives in the absence of a regulatory mandate. But, as Rees discussed, the existence of human rights risk in your supply chain is not a secret -- it’s just a question of when and how it will be exposed.

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Book Summary: The Rule of Nobody

In The Rule of Nobody, Philip Howard describes how bureaucracy is stifling U.S. institutions as well as the spirit of autonomy and free will among Americans. We live within a system whereby layers upon layers of often incomprehensible and inconsistent regulations, mandatory disclosures and requirements create a society that is “governed by dead laws” — meaning that since many of today’s laws are so outdated, they have been rendered irrelevant because layers of new (and sometimes inconsistent) laws have been enacted after them, or they have become otherwise destructive to the social good because they hamper progress. 

The Rule of Nobody [homepage | public library]

By: Philip K. Howard

Summarized by Azish Filabi

The book is packed with examples of inept laws replacing common sense human judgment.  In many cases, government agencies are comprised of well-meaning individuals who can’t apply their common sense and best judgment to resolve the problems they are hired to manage.

His recommendations for restoring human control of democracy and bringing about good government involves a series of reforms (summarized below) towards principles-based regulation, including appointing independent commissions to review and propose amendments to existing laws, to mandatory sunset provisions of all laws with budgetary impact, thus compelling Congress to consider the present needs of constituents when allocating expenditures.    

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