The latest issue of AretéWork is out…

We’re mixing things up and moving the AretéWork Quarterly to a new shorter format which will instead arrive a little bit more often.

I hope you’ll want to follow along – and share with others who might benefit.

In this new issue you’ll find:

The latest from AretéWork – Including a new book I’ve contributed a chapter to – use the AUDIT20 to get 20% off from the publisher.

A Q&A Chris Campbell and David Barr – which is one of a new series of Q&As with leading thinkers in the field.

Interesting ethics links from elsewhere – Because sharing is caring … and if you have something you’d like included in a future issue, let me know.

What we’re reading – A quick summer round-up. Got recommendations to add? Be sure to send them along…All the best to you and yours. Let’s advance #EthicalBusinessPractice together.

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‘there is generally in my experience far more corruption in countries with very rigid rules and very limited discretion…’

A brief AretéThoughts Q&A with Florentin Blanc:

What is the most important thing that regulators must learn from the pandemic?

Outcomes are what matters, not processes. And to achieve outcomes, you need to keep focusing on assessing, understanding, detecting risks. You need flexibility, and data. But this a lesson even more for those who make the rules “above” regulators, which often constrain the latter rather than empower them.

Are there ways to achieve a suitable degree of regulatory discretion without increasing corruption risk? Why would this be helpful?

The short answer is: yes. Why would it be helpful, first? Because optimal rules don’t exist: rules cannot predict everything. If you make them too rigid and precise and narrow, you will end up with bureaucracy, and inability to adapt and respond to events.

If you make them too loose, they will be useless. You need discretion, definitely.

How to limit corruption? First, regulators need to adopt and publish clear guidelines on how they exercise discretion, so that there can be accountability and review. Second, there needs to be transparency, and results management, accountability for results. Third, of course, properly professional regulators, with careers that attract good people, ethical internal structures and management. This is vital.

Finally, there is generally in my experience far more corruption in countries with very rigid rules and very limited discretion…

What is your current favourite book or podcast and why?

I don’t listen to podcasts, only music. Bookwise, I enjoyed a lot the “Interdependency” series by John Scalzi and the “Lady Astronaut” series by Mary Robinette Kowal, of which I read the last volumes a couple months ago – I find science fiction always both refreshes my brain through evasion, and has very interesting insights into society, technology, economics etc. Apart from this, I am an avid Twitter user – this is where I learn stuff, for instance the “airborne Covid” stuff which right now is my most exciting area of work and leads to the question of whether and how we could have a new regulatory “field”, (indoor) air safety.

Will the pandemic speed up the pace of regulatory change in some countries and what will drive the change, if you feel it will happen?

Maybe! I sure hope so. Particularly, I wish it would help regulators and most importantly politicians who make the laws that regulators work within to realize the importance of understanding and managing risks, rather than focusing on what is easy to control and measure. If change does not happen, we will continue to flail around with regulatory measures that deliver no results but have significant costs.

Florentin Blanc is a Senior Policy Analyst at OECD.

Read more AretéThoughts Q&As

Summer reading list

What am I reading at the moment? Well, quite a few different things.

I am almost finished with the Fearless Organization by Amy C. Edmondson. I was particularly struck by her description of the different responses and outcomes between Fukushima Daiichi and Fukushima Daini in the earthquake and tsunami of 2011. Fukushima Daini was led by Naohiro Masuda, plant superintendent, who inspired life-saving teamwork from his 400 colleagues through honesty, vulnerability, communication and information sharing. And, Professor Edmondson explains how he did all this with a whiteboard. It is a gripping story, and worth the price of the book alone.

I have started Michele’s Wucker’s new book, You Are What You Risk: The New Art and Science of Navigating an Uncertain World, after listening to her talk to Christian Hunt on the Human Risk Podcast. If any of you are procrastinating about mitigating risks in your personal life, this is probably for you.

Another personally motivated choice is Nir Eyal’s Indistracable. Having coped with a short attention span all my life; I am finding that the pandemic has reduced it further, mainly as a result of spending so much time at home. I used to scroll mindlessly through social media while on the Underground or while travelling so it didn’t feel quite as much of a problem – when I arrived at my destination, I stopped. Now there is no destination. As he points out you can only be distracted from something – and he urges us to explore the root cause for example, asking ourselves, what am I trying to avoid. Needless to say, this type of introspection can be painful!

On the plus side, I’m reading the other contributions to Roger Miles’ new book (mine is Chapter 13 on cultural measurement). The title of the whole book is Culture Audit in Financial Services.

And I’m reading Noise by Kahneman, Sunstein and Sibony after listening to three different podcasts featuring one or all of the authors. They must be exhausted!

I finished Rutger Bregman’s delightful book Humankind, A Hopeful History, and would recommend it to anyone who listens to the news daily.

What are you reading? Let me know on LinkedIn or @ruthsteinholtz.

OUT NOW: Culture Audit in Financial Services

In the next wave of conduct regulation in financial markets, from 2021 conduct regulators in the UK and elsewhere expect firms to produce evidence on how they are improving behaviour and culture. Facing this, many practitioners are anxious that their current reporting and management information (MI) are irrelevant to meeting as-yet unclear regulatory expectations.

This book provides the insights and tools firms need to report on culture, securing both enhanced business value and the regulator’s approval. Culture is now seen as a key contributor to good governance, feeding into existing discourse on environmental, social and governance (ESG) factors and the emerging dialogue on ‘non-financial (mis)conduct’, but conventional measures of business quality are unfit for the new reporting agenda. Culture Audit in Financial Services follows the arc of ‘behavioural regulation’ to examine what the regulator really wants, before offering guidance on how culture audit differs from conventional auditing, how to put the latest pure-research findings to work, and the key features of well-designed conduct and culture reports.

Written by an impartial author and a variety of contributors (including yours truly) with extensive experience working with practitioners, regulators, and many of the world’s finest academic initiatives, this book is filled with practical, grounded advice on how best to approach this new challenge and avoid infractions.

Get your copy today.

Proceedings: 13th Conference on Good Regulatory Practices

In case you missed, the proceedings from the APEC 13th Conference on Good Regulatory Practices are now available:

13th Conference on Good Regulatory Practices (GRP13)
13th Conference on Good Regulatory Practices (GRP13)

Emerging technologies have been and will be impacting all areas of social and economic activities, including transportation, education, finance, and health care.  While offering great promise, they also present unique challenges for regulators to strike a balance between promoting productivity and innovation, and maintaining health, safety, and environmental protections.  The GRP13 conference was held virtually to exchange notes among members and learn from the experts on their vast experience, lessons learned and best practices in improving mutual understanding about how regulatory policy itself is affected by the digital economy and in turn, how policymakers can improve regulatory system, making it agile to enable technological innovation. 

This report summarizes the experts’ sharing on regulatory design, delivery and reform with regards to new and emerging technologies, as well as touching on the relevance of the topics to the current crisis of COVID-19.  Performance-based regulations, regulatory sandboxes, international standards and international regulatory cooperation (IRC) were among the key points highlighted in the conference. Two of the key outcomes include the importance of private-public sector collaboration and further deliberation of the IRC.

Download the full report

Thanks to Srikanth Mangalam from the Public Risk Management Institute for introducing #EthicalBusinessRegulation to the proceedings. You can read an earlier Q&A with Srikanth here.

‘…be wary of sweeping generalisations of “the top 5 things to transform your training impact”’

A brief AretéThoughts Q&A with Chris Campbell & David Barr:

So David, you and Chris have just written the IBE’s latest Good Practice Guide – Trends and innovations in effective ethics education, what are your key takeaways:

Hmmm, I fear that’s hard to answer succinctly, or at least for me! It stems from what we heard clearly from all the ethics & compliance (E&C) heads we were fortunate to speak with. Which is: every company’s E&C programme has its own unique context – driving their risk profile, attitudes, resources and knowledge regarding E&C. All of which fundamentally impact what training actions (in the next 12 to 24 months at least) will have the greatest impact.

So, our first key takeaway: be wary of sweeping generalisations of “the top 5 things to transform your training impact” or “follow these key best practices for better performance”. But with that caveat in mind, if you step back far enough there were three key trends that in some way everyone we spoke with was grappling with.

Firstly, an increasing necessity to break down training and communication silos; and to co-ordinate, plan and co-develop training in a much more aligned way with other key corporate functions. Most notably HR and Health & Safety, but depending on context almost any function. This is simply necessitated by employee overload and ethics & compliance needing to impact behaviours and capabilities and not just knowledge and awareness.

Then, very closely linked with this is strengthening the focus on having the learner at the heart of your training strategy. We know this sounds almost too simplistic, but the E&C leaders we spoke with are being increasingly candid with themselves about how this core principle gets knocked off course. To their credit.

Then finally, and again these are all closely entwined, building out more informal and on-the-job training interventions, and not only relying on formal training, be it eLearning or live sessions.

Chris we heard a lot about putting the learner at the centre of your ethics training; how exactly can that be achieved?

For me, this is the big one and most ethics & compliance teams get it and start with the right intentions but through the process this becomes gradually lost or significantly compromised. It comes back to:

  • How does this benefit the individual and the organisation?  
  • Am I being efficient with their time and respectful of their knowledge and experience?

Using some form of profiling or test really helps, so that the content delivered (irrespective of medium) is relevant and can be applied. Use the technology for what its good at – targeting key information to the right person at the right time. Use the time you have face to face (real or virtual) to have purposeful conversations that allow a learner to really share their challenges and frustrations.

Being ‘learner centric’ means putting the learner at the heart of the training and considering everything through their eyes. How will a learner experience the education, how does the process of learning make them feel and what do we expect them to do differently as a result? Though I would stress it shouldn’t be read as simply “learner easy”. Training must still stretch and challenge; and it can still be demanding. 

David, can you share a short example of this?

There are many, but one we’ve been closely involved with and that’s having significant impact is the Responsible Business Discussion programme that Cedric Dubar and his team at Volvo Cars are leading. It stemmed originally from their Integrity Champions network being equipped with a suite of short discussion guides that they could draw from and use at local briefings or leadership meetings etc. These proved very popular with both the Champions and their colleagues. So with that foundation Cedric and the team pushed to receive backing from the Executive Committee to have nearly 4,000 managers run a Responsible Business Discussion every quarter with their teams.  Each discussion requires about 20 – 25 minutes of preparation time and supports an informal, but purposeful, ethics & compliance orientated discussion to be facilitated by a team member (normally the manager, but it doesn’t have to be). Each discussion focuses on a straightforward, but compelling case study or thought piece and will close with the team agreeing some specific takeaways that they can action.

For us this is learner centric, as it’s a team led discussion so immediately close and contextualised for the team, it results in the team agreeing their own actions, as team based there’s minimal disruption, and as 20 – 25 minutes once a quarter, minimal time. But across Volvo Cars they now have nearly 35,000 colleagues having a quarterly ethics & compliance discussion, led by a close colleague, where they develop and agree the actions. That’s remarkably powerful, and for us, very learner centric.

How do you think the pandemic has shaped the delivery of ethics training and are those changes here to stay?

I think we have all rapidly accelerated our capabilities and comfort with virtual sessions. Virtual delivery used to be wrapped in complex set-up instructions, guidance on backdrops and how to be “professional” when online. For the most that is gone, many people don’t want the corporate backdrop and like the brief window into each other’s lives. I think virtually delivered content will be a bigger part of the delivery mix, I think it will eat into eLearning as well as live physical sessions. And with regard to live sessions as Joni Mitchell said “you don’t know what you’ve got till it’s gone.” There is a greater respect for the value in being face to face and having a focused session that allows you to really dig into issues.

David, I know you are a big on your Podcasts, what would you recommend that those of us in the ethics & compliance world listen to:

It would have to be Tim Harford’s More or Less on BBC Sounds. It digs into numbers and statistics quoted in the media and encourages a questioning, but overall positive mindset. I’m a huge believer in being comfortable to question and kindly interrogate what is presented as fact!

And from you Chris what about a book?

The Tyranny of Merit by Michael Sandel. Sandel has been described as the greatest living philosopher, I have always found his writing to be entertaining and accessible. This book forced me to challenge some uncomfortable truths about my attitude to meritocracy. Thoroughly recommended!

Chris Campbell & David Barr are the co-founders of Campbell Barr.

Culture & Conduct Deep Dive: Leading Culture/Behavioural Change

1LoD has launched a new Culture & Conduct Deep Dive which will examine culture and conduct in more granular detail than ever before. The event will take place in 3 hour blocks starting at 13.00 BST / 08.00 EDT in a safe, off the record environment.

The in-depth analysis into Culture and Conduct will ensure high quality interaction between delegates through content rich panel discussions, keynote addresses, and a series of carefully managed private interactive discussions.

And talking of panels, I hope to see you at:

The Challenge of Leading Culture/Behavioural Change

12 May 2021 – 15.05-15.55 BST

  • What are the challenges that leaders and their executive teams face in leading culture/behavioural change?
  • How well equipped are leaders to cope with the challenges of leading change?
  • How can financial institutions better equip themselves in the future?

Panel

  • Dr. Roger Noon – Moderator, 1LoD
  • Nancy Harrington-Jones – Chief Culture & Conduct Officer for the Americas, Société Générale
  • Rebecca Goad – Global Head of Business Risk & Culture, Global Banking, HSBC
  • Ruth Steinholtz – Managing Partner, AretéWork & Author, Ethical Business Practice and Regulation: A Behavioural and Values-based Approach to Compliance and Enforcement
  • Femke de Vries – Managing Partner, &samhoud; Professor in Supervision at Groningen University
Download the full agenda for both days here. 

Don’t miss out. Book now. 

The Culture & Conduct Deep Dive is CPD certified so that delegates attendance can be utilised to demonstrate professional development.

Audit Firm Culture: Challenge. Trust. Transformation

Just in from the Financial Reporting Council (FRC) – a welcome international conference on the importance of culture.

Audit Firm Culture: Challenge. Trust. Transformation.

The conference will explore the link between audit firm culture and audit quality with the objective of accelerating the pace of change for cultural transformation in the audit profession.

The conference will comprise of a week of lunchtime sessions, involving speakers and panel debates. There will be leading academics, directors, regulators, standard setters and culture change experts. They will be speaking on topics ranging from the link between audit quality and audit firm culture, developing an auditor’s mindset of professional scepticism and challenge, the role of the audit committee, how to assess and measure culture and the role of the regulator in supervising culture.

The conference will consist of five lunchtime virtual webinars (21 June 2021 – 25 June 2021) and will be of interest to audit professionals, audit committee chairs, academics, international regulators, culture change experts, directors and other stakeholders.

LEARN MORE & REGISTER

Countering Corruption through Collaboration: Youth Perspectives and Engagement

Just in from our friends at the United Nations Office on Drugs and Crime (UNODC):

Coming up from Monday 24 – Wednesday 26 May 2021:

Youth Forum on Countering Corruption through Collaboration: Youth Perspectives and Engagement” . The event is being held virtually – learn more here:

The Youth Forum is being organised as a special event that will directly contribute to the United Nations Special Session of the General Assembly (UNGASS) on challenges and measures to prevent and combat corruption and strengthen international cooperation to be held from 2 to 4 June 2021 at UNHQ in New York.

Recognising the effect of corruption on young people, and the value of youth perspectives in working to curb it, the Youth Forum is intended to provide a platform for young people to share ideas about how to amplify youth-led actions and enhance youth engagement in anti-corruption efforts around the globe.

The main elements and ideas discussed at this Youth Forum will be directly communicated to Heads of State and Government through a Youth Forum Summary Statement to be delivered by a youth forum representative during the opening segment of UNGASS itself. The Youth Forum Summary Statement will also be transmitted to the Commission on Crime Prevention and Criminal Justice.

Over the course of three days, three thematic panel discussions will be held on the topics of:

  1. Corruption and its effect on young people
  2. Youth engagement in preventing and combating corruption
  3. Youth expectations for UNGASS and beyond

REGISTRATION – Open until 5 May 2021.

Further details about the Youth Forum will be provided to registered participants after 5 May, including how to get involved in discussions in the lead-up to the event.

Please help disseminate information about the UNGASS Youth Forum to your networks.

We hope you will join us to stand #unitedagainstcorruption!

Crystallising value in a  Purpose Oriented Culture

I hope you’ll join me for this at the Conduct & Culture Summit organised by Armstrong Wolfe – Three days of virtual webinars for the Financial Services Global COO and CCO community.

Theme:Purpose and Leadership
Date:19th April 2021
Time:1:00pm-2:30pm BST
Topic:Crystallising value in a  Purpose Oriented Culture
Format:Keynote

It is an opportunity to hear from industry and regulatory leaders, prominent academics and those at the forefront of behavioural science on how culture and conduct are shaping the Financial Services industry.


About:
Advanced and progressive thinking in relation to managing culture and conduct.

What it is not:
The dissection of established operational processes, policies and mandates in place today.

Who should attend:
Business heads accountable for culture and conduct and the appointed executives responsible for determining how best to protect the franchise from evolving threats.

Its focus on culture, the importance of cultural cohesion and the changing demands of the conduct agenda have never been more important and complex than now. The COVID-19 crisis has placed the industry into a uniquely challenging place but with every test there exists opportunity to embrace change and meet this contest with innovation and courage.

REGISTER FOR THE SUMMIT HERE