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Governance & Culture Reform

Governance & Culture Reform
Podcast Series on The Role of Accountability in Preventing Misconduct
The Teller Window
2024 Governance and Culture Reform Conference: The Elements of Accountability
The Teller Window
Ten Years of Governance and Culture Reform: Taking Stock
Speeches
Hennessy: Culture and Conduct in 2024: An Update from the New York Fed
The Teller Window
The New York Fed’s Governance and Culture Reform Initiative: An Overview
Governance & Culture Reform
Full Resource List

New York Fed

Speeches

Hennessy: Culture and Conduct: Key Learnings and the Year Ahead from the New York Fed

In remarks at 1LoD's Culture & Conduct Deep Dive event, Head of the Governance and Culture Reform Initiative James Hennessy highlighted some key themes and learnings from recent efforts and shared what's ahead for the Culture Initiative.

(DATE: MARCH 7, 2023)

Hennessy: Emerging Trends in Culture Reform: The New York Fed’s Perspective

In remarks at 1LoD's Culture & Conduct Deep Dive event, Head of the Governance and Culture Reform Initiative James Hennessy discussed three emerging factors that have deepened the study and analysis of culture.

(DATE: MARCH 22, 2022)

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Events

2023 Governance and Culture Reform Conference

The conference dove into what motivates behavior and how to foster a learning culture within organizations, among other topics.

(DATE: June 20, 2023)

Culture and the New Workplace

This webinar considered a range of questions about the evolution of the workplace and its influence on organizational culture.

(DATE: OCTOBER 4, 2022)

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Podcast Series

Banking Culture Reform: Building Cultures of Curiosity and Learning

This four-episode series focuses on the techniques firms can use to cultivate cultures that are inquisitive and surface the mistakes, motivations, and behaviors that hinder optimal performance and progress towards stronger and healthier organizational cultures.

(DATE: December 2023)

Banking Culture Reform: Trust, Technology, and The New Workplace

This three-episode series examines how trust, technology, and the dynamics of the hybrid workplace affect the norms and mindsets that contribute to organizational cultures through interviews with thought and industry leaders across banking, data science, ethics, social psychology, and academia.

(DATE: December 2022)

Banking Culture Reform: Norms, Mindsets, and Decision-Making

This nine-episode series examines the norms and mindsets that contribute to the spectrum of decision-making, from ethical to unethical, through interviews with thought and industry leaders representing a broad range of experience across banking, regulation, psychology, neuroscience, and aeronautics and space.

(DATE: November 2021)

Publications

Bank Culture and the Official Sector: A Spectrum of Options

Culture is a topic of growing interest in financial services. This article by New York Fed senior leaders can prompt conversations with academics, regulators, and bankers about how culture contributes to decisions and behaviors in the financial services industry.

(DATE: February 2020)

The Economics of Why Companies Don’t Fix Their Toxic Cultures

In this Harvard Business Review article, Head of Supervision Kevin Stiroh discusses the role culture plays in corporate misconduct and shares why he thinks these problematic cultures persist.

(DATE: MARCH 22, 2018)

Misconduct Risk, Culture, and Supervision

In this white paper, the conceptual argument is made for why supervisors should care about a financial institution's culture and how it is supports supervisors' approach to risk management.

(DATE: DECEMBER 7, 2017)

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Other Resources

Speeches

Elderson: Exchanging Views for Better Bank Governance and Risk Culture

Vice-Chair of the European Central Bank (ECB) Supervisory Board Frank Elderson delivered remarks on the ECB’s guide which outlines its supervisory expectations of firms on governance and risk culture issues.

(DATE: September 2024)

Bowman: Update on Economic Outlook, and Perspective on Bank Culture, M&A, and Liquidity

Federal Reserve Governor Michelle W. Bowman discusses the role of culture at banks and at supervisory and regulatory authorities.

(DATE: AUGUST 2024)

Shepperd: How Culture Must Change to Meet Expectations

Emily Shepperd, Chief Operating Officer and Executive Director of Authorizations at the Financial Conduct Authority, discusses the importance of culture in delivering good consumer outcomes and assessing fitness and propriety of staff.

(DATE: JUNE 26, 2023)

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Industry Resources

Irish Banking Culture Board Annual Report (2023-2024)

The Irish Banking Culture Board published its annual report which highlights progress made toward improving firm cultures and building public trust.

(DATE: NOVEMBER 2024)

ECIIA: Auditing Risk Culture

The European Confederation of Institutes of Internal Auditing’s Banking Committee issued a paper on the risk culture landscape and various aspects of risk culture audits, including possible audit approaches, regulatory expectations, and the range of challenges culture auditors face.

(DATE: JULY 2024)

Financial Markets Standards Board: Spotlight Review on Conduct & Culture Management Information

Research from the Financial Markets Standards Board (FMSB) examines the current practice of 24 major financial firms around management information on conduct and culture. The findings of their Spotlight Review paper suggest good progress on reducing misconduct and a shift in attention to non-financial risks and broader cultural change across firms.

(DATE: JULY 24, 2023)

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Academic Resources

City University of London: Understanding Best Practice in Industry Self-Regulation

This interview-based study of the Financial Services Culture Board (FSCB) informs discussions about the legacy of the organization by examining its most impactful activities, the cultural changes taking place among member firms, and its best practices and most valuable features.

(DATE: MAY 9, 2023)

Harvard University: Sociological Perspectives on the Bank Failures of 2023

Harvard University’s Department of History held a webinar which examined the March bank failures through a social sciences lens.

(DATE: APRIL 19, 2023)

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OFFICIAL SECTOR RESOURCES

Office of the Superintendent of Financial Institutions: Regulatory Notice-Culture Risk Management

Canada’s Office of the Superintendent of Financial Institutions released a new regulatory notice outlining supervisory expectations for managing culture risk.

(DATE: November 2024)

European Central Bank: Draft Guide on Governance and Risk Culture

The European Central Bank published draft guidance clarifying supervisors’ expectations and outlining good observed practices regarding the composition and functioning of management bodies and committees, roles and responsibilities of internal control functions, risk appetite frameworks, and the importance of assessing and reporting on risk culture.

(DATE: JULY 2024)

NYS Dept. of Financial Services: Guidance on Character and Fitness Assessments

The New York State Department of Financial Services issued an industry letter providing guidance on its expectations for firms’ frameworks for reviewing and assessing the character and fitness of their directors, senior officers, and managers.

(DATE: JANUARY 2024)

European Central Bank: Effective Management Bodies–The Bedrock of Well-Run Banks

In this blog post, European Central Bank Executive Board Member Frank Elderson discusses management body effectiveness, and the crucial role a firm’s board plays in constructively challenging existing perspectives.

(DATE: JULY 20, 2023)

Office of the Comptroller of the Currency: Proposed Consumer Trust in Banking Survey

The Office of the Comptroller of the Currency (OCC) is requesting information and public comment on a proposed annual survey that would track and assess consumer trust in banks and banking supervision over time.

(DATE: JUNE 9, 2023)

Department of Justice: Pilot Program on Compensation Incentives and Clawbacks

The Department of Justice launched a three-year pilot program on compensation incentives and clawbacks designed to shift the burden of corporate wrongdoing away from shareholders and onto those directly responsible.

(DATE: MARCH 3, 2023)

Department of Justice: U.S. Attorney’s Offices’ Voluntary Self-Disclosure Policy

The Department of Justice implemented a new Voluntary Self-Disclosure Policy which details the circumstances under which a company will be considered to have made a voluntary self-disclosure of misconduct to a United States Attorney’s Office.

(DATE: FEBRUARY 22, 2023)

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About This Initiative

The New York Fed's Governance & Culture Reform initiative is designed to foster discussion about corporate governance and encourage the continued improvement of culture and conduct in the financial services industry.

The Path Ahead

“The journey toward reforming culture in the banking and financial services industry is a long one. And there’s no single action that a regulator or a bank can take to make it happen. Getting it right is going to require the will and expertise of regulators, financial services firms, academics, and practitioners. And while changing organizational culture is a long-term, complex, and challenging task, I’m optimistic that we can and we will make progress. And the Federal Reserve Bank of New York is committed to being a partner on that journey.”

-- New York Fed President and CEO John C. Williams, “Banking Culture: The Path Ahead” (June 2019)

Disclaimer

Except where expressly indicated, none of these materials necessarily represent the views of the New York Fed or any other part of the Federal Reserve System.

The Teller Window

For additional information on the New York Fed’s Governance & Culture Reform initiative, see The Teller Window.

The Education and Industry Forum

The New York Fed’s Education and Industry Forum (EIF) brings together representatives from business schools and senior industry professionals to integrate ethical decision-making into the education of the next generation of the financial services workforce.

Contacts

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Governance & Culture Reform

Podcast Series on The Role of Accountability in Preventing Misconduct

2024 Governance and Culture Reform Conference: The Elements of Accountability

Ten Years of Governance and Culture Reform: Taking Stock

Hennessy: Culture and Conduct in 2024: An Update from the New York Fed

The New York Fed’s Governance and Culture Reform Initiative: An Overview

Full Resource List