How (not) to define banking culture

The Group of Thirty has recently published a report entitled Banking Conduct and Culture. The Group of Thirty is a high-profile think tank covering global finance with members such as Paul Volcker, former Chairman of the Fed; Mark Carney, Govenor or the Bank of England; and Mario Draghi, President of the ECB. As the subtitle indicates, the report is meant as a “call for sustained and comprehensive reform”:

“There must be a sustained focus on conduct and culture by banks and the banking industry, boards, and management. Firms and their leaderships need to make major improvements in the culture within the banking industry and within individual firms.” (p. 11)

A lot about the report is to be recommended. It provides a good overview of current interventions to improve organisational culture in banking. It urges leaders of banks as well as regulators to move beyond lofty value statements, towards a firm integration of an ethical culture into banks. It does so by calling for a “fundamental shift in the overall mindset on culture”, and making ethics count when designing incentive structures, performance management, and promotion paths.

Alas, the report fails at providing a helpful definition of organisational culture. It fails in ways that some very old-fashioned conceptual analysis could have prevented. Continue reading

New research program in financial ethics at University of Gothenburg

Joakim Sandberg, Associate Professor of Philosophy at University of Gothenburg, has been selected as Wallenberg Academy Fellow by the Royal Academy of Sciences in Sweden. The fellowship is designed to give stable financial support to the most promising young researchers of all academic disciplines. Sandberg will receive five years of full research funding plus a hefty research budget that is supposed to cover junior associates, workshops and travels. So be on the look out for new junior positions at Gothenburg in the near future!

Sandberg’s research program is called “The Philosophy of Responsible Finance” and deals with foundational issues in financial ethics. The aim is to develop a theory of the division of labor in society which stakes out a more sustainable role for financial agents and markets. The program will also evaluate some of the currently proposed measures for making the financial system more socially responsible. These include changing the bonus system for financial executives, legislation on robotic trade in securities, and a global tax on financial transactions.