Restoring Trust in the Financial System
By Ron James
“Trust,” according to John Taft, CEO of RBC Wealth Management USA, “is the currency of the financial system.”. In his first book, Stewardship (2012), Taft described how a broken trust resulted in the largest financial crisis in recent history. In his latest book, A Force for Good (2015), Taft looks forward and calls “rebuilding trust” the top priority.
Taft reiterated these lessons at a recent CEBC public program, where he was joined by William Johnstone, executive chairman of D.A. Davidson and Bethany McLean, contributing editor at Vanity Fair and co-author of The Smartest Guys in the Room, All the Devils Are Here and recently released Shaky Ground. Taft listed solutions to rebuilding trust, including returning to a focus on: clients; mission and values based organizations; ethics and integrity in the industry; and completing the implementation of regulatory reforms.
Essential to rebuilding trust is aligning the expectations of society and the industry toward growth, stability, economic equality, sustainability and preservation of the system for future generations.
CEO’s Report: What’s On Your Mind?
By Ron James
First, how to advance the discussion in building values based cultures that comply with the letter and spirit of the rules, regulations and laws facing their organization. All had codes of conduct, mission and values statements. But most were still wrestling with how to embed the expected behaviors into the fabric of the organization. They valued the haven the center provides, creating an opportunity to explore the latest thinking among their peers, academic research and thought leaders about values based approaches to building an ethical culture.
Next, they worried about setting behavioral standards and expectations globally, especially in light of the consequences imposed by the Foreign Corrupt Practices Act. When doing business in countries with different cultural traditions, which norms prevail: the host country’s the home country’s…or both?
Continue reading to see how the center’s programming and research is focused on these same questions. I would like to hear from you. Please write me at firstname.lastname@example.org to share what’s on your mind.
March 4, 2016
8th Annual CEBC Ethics Case Competition
April 19, 2016
Save the Date
2016 Stakeholder Dialogue featuring Ari Weinzweig, CEO of Zingerman’s Community of Businesses
May 11, 2016
Minnesota Business Ethics Award
To learn more about becoming a member, please visit the Center’s website at www.cebcglobal.org.
What is Ethics 2.0?
Drawing on 30+ years’ experience in business ethics, Kirk Hanson, executive director of the Markulla Center for Applied Ethics at Santa Clara University, shared pointed insights at a recent CEBC Roundtable. Evolution of the field has been positive since the 1970s. However, compliance overshadows ethics, leading to a check-the-box approach and little work to build a consensus around a moral standard for business. Despite the importance of “tone at the top,” executives and boards are reluctant to articulate a moral voice beyond speaking of legal and standard market practices. As a result, most companies fail to define what their stated values mean for day-to-day practices. High minded words and catchy slogans (e.g., “don’t be evil”) don’t provide much practical guidance; they need to be stress tested.
Hanson applauded initiatives to build moral consensus, citing the UN Global Compact as one evolving effort, and he noted the emerging work done by psychologists on individual and organizational behavior. For Hanson, 90 percent of the time good ethics is good business, but because you can’t predict when the other 10 percent will emerge, your only choice is to work hard at building a strong ethical culture.
CEBC Business Leaders Forum
CEBC’s Leaders Forum brings together top level leaders of small and medium size businesses three times each year for a private conversation and exchange of ideas. In our recent gathering, we focused on reinforcing ethical behavior through performance evaluations. Begin setting expectations by describing what the values really mean and what they look like in practice long before any evaluation.
Communication giving voice to values has to be done by managers and supervisors, not just the CEO. Engage in small group meetings, use quick frequent surveys (i.e. Survey Monkey) and celebrate living the values. Office design also communicates values: does your organization have low walled cubicles, enclosed offices, open spaces for collaboration? And when giving feedback, remember that there are differing understandings of behavioral expectations across generations. Be prepared by linking areas of feedback to both the business goal and the specific core value.
Nominate a Business for the Minnesota Business Ethics Award
Has a company – your own, a competitor’s, a supplier’s – impressed you with its commitment to the highest standards of ethical business conduct? If so, consider nominating that business for the 17th Annual Minnesota Business Ethics Award (MBEA). Award recipients will be recognized at an awards luncheon banquet on May 11, 2016.
Listen to Minnesota Business Ethics Award – Is it worth it? to hear recipients reflect on the meaning of the award and the role of ethics in their businesses.
Last year’s recipients included:
- Victory Auto Service & Glass (small company category)
- North Star Resource Group (medium company category)
- Mary T. Inc. (large company category)
The MBEA is organized by the Society of Financial Service Professionals – Twin Cities Chapter, National Association of Insurance and Financial Advisors – Minnesota and the Center for Ethical Business Cultures (CEBC).
Pictured (left to right): Mary Tjosvold – co-founder of Mary T. Inc., Diane Yohn – Executive Vice President of North Star Resource Group, and Jeff Matt – President of Victory Auto Service & Glass.
Building Ethical Business Cultures in Emerging Markets: Risks and Opportunities
Midway through its ambitious book project, Building Ethical Business Cultures in Emerging Markets, scheduled for publication in 2016, the center hosted a two-day conference. On day one, nine authors representing perspectives from the BRICs (Brazil, Russia, India and China) and MISTs (Mexico, Indonesia, South Africa and Turkey) were joined by academics and business practitioners with global experience to explore risks, opportunities and challenges. Emery Koenig, Cargill vice chairman and chief risk officer, delivered a keynote address sharing Cargill’s experiences.
On the second day, the authors reflected on the discussion and agreed on a renewed focus to express the cultural differences not so much as challenges or risk for business, but as opportunities created out of the diversity; not so much a cookbook of how to do business “in” any of the emerging market countries, but how to embrace cultural diversity in the quest to expand and enhance business opportunities regardless of where the business is located.
Learn more at www.cebcglobal.org.