Organizational Culture Drives Ethical Behaviour: Evidence From Pilot Studies Azish Filabi, Executive Director, Ethical Systems, NY, NY, USA
[email protected] Caterina Bulgarella, Independent Ethics Advisor & Culture Architect, NY, NY, USA
[email protected] Abstract Regulators around the world are increasingly focusing on organizational culture to help them curb corruption in companies. After the Global Financial Crisis in particular, the financial services sector regulators, both in the UK and the US, have encouraged financial institutions to report on how they manage the culture in their organizations, and to determine ways that culture impacts desired behaviors at the firm. In the U.K., the sector has created a Banking Standards Board that conducts culture assessments at member companies. In the U.S., FINRA, the broker-dealer regulatory organization, requires that companies report on culture, and the NY Fed, and the OCC emphasize the role that culture plays in regulating behavior and conduct and their expectation that firms actively manage their culture, and require reporting in some cases. In 2016 and 2017, a team of researchers collaborating with Ethical Systems, a research collaboration housed at the NYU-Stern School of Business, came together to determine the appropriate constructs for what constitutes ethical culture. The results of that work are described in this paper, including the development of a data-driven framework for ethical culture in organizations. 1 The framework is an analog to Herzberg’s two-factor theory, which is a simple model that describes the positive and negative continuums on which individuals express workplace attitudes. Applied to ethical culture, the research shows that there are both positive aspects of an ethical culture (Qualifiers) and negative aspects (Disqualifiers).