I'm not the only one fed up with "bratty" corporate-scandal emails.
"If you read the e-mails from the Libor scandal," writes New York Times columnist David Brooks, "you get the same sensation you get from reading the e-mails in so many recent scandals: these people are brats; they have no sense that they are guardians for an institution the world depends on; they have no consciousness of their larger social role."
Brooks argues, convincingly, that our country's current elites -- including the executive leadership teams of financial services firms -- lack the "stewardship mentality" possessed by our country's previous elites (the old-boy Protestant Establishment) who "cruelly ostracized people who did not live up to their codes of gentlemanly conduct and scrupulosity."
Instead of ostracizing scrupulosity violations, today's financial services industry elites actually compensate people who flout codes of conduct and company values; this is one of the key findings of a survey of 500 U.S. and U.K. financial services professionals conducted by Labaton Sucharow LLP, the first law firm in the country to establish a practice exclusively focused on protecting and advocating for whistleblowers who report possible securities violations to the SEC.
Among its many dispiriting but not surprising (in light of rate-rigging and money-laundering among other misbehavior) results, the survey finds that 30 percent of respondents reported their compensation or bonus plan created pressure to compromise ethical standards or violate the law. What's more, 23 percent of respondents reported other pressures that may lead to unethical or illegal conduct.
Here are some of the survey's other key findings:
- 26 percent of respondents indicate that they had observed or had firsthand knowledge of wrongdoing in the workplace;
- Nearly 25 percent of respondents believed that financial services professionals may need to engage in unethical or illegal conduct in order to be successful;
- Sixteen percent of respondents say they would commit a crime -- insider trading -- if they could get away with it; and
- Only one in four financial services professionals believe regulatory watchdogs (i.e., regulations combined with enforcement) are effective.
I found this finding particularly disheartening: "Doubt about ethical conduct pervades financial services organizations. Only 41 percent of respondents reported that staff within their own organization had 'definitely not' engaged in unethical or illegal conduct to be successful."
That doubt stems from the state of organizational cultures within financial firms; these cultures, as Brooks mentions, appear to be lacking the stewardship mentality necessary to prevent the missteps that result in rate-rigging, money-laundering and other scandalous shenanigans.
"The best way to avoid corporate scandals," the Labaton Sucharow survey indicates, "is to establish and nurture a culture of integrity in the workplace. Too often, scandals result from a long chain of mistakes, where one breakdown in judgment cascades to another breakdown, and then another. In time, isolated and seemingly random unethical or illegal choices snowball into front page scandals."
At the risk of sounding like a broken record: Does your risk management program assess the integrity of your organization's culture? If not, chances are that your company's own elites are failing to fulfill their stewardship responsibilities.