Banking on team ethics : a team climate perspective on root causes of misconduct in financial services

Abstract

This book provides insights and tools for managers and in-

and external supervisors within financial services that help to define and

assess team climates in order to prevent future misconduct. Applying social

psychological insights about team conditions that invite unethical behaviour, can help understand and improve current work practices in financial services. Team climates are a blind spot for banks and financial supervisors. There is much to win by addressing dysfunctional team practices, as a way to prevent future misconduct. In this book I aimed to provide a practical approach to analyse team climate as an internal or external supervisor. I present the ‘Corrupting Barrels’ model that can be used to characterize teams on three aspects that facilitate unethical behaviour: ineffective error approach, outcome inequality and dysfunctional moral climate. By combining a deep dive review including observations and interviews with a survey, it is possible to effectively identify meaningful differences in team climate characteristics that are known precursors of organizational misbehaviour. The analysis provided is based on data gathered while the author worked as a senior supervisor of behaviour and culture at DNB and provides quotes from board members, senior managers and traders within large European banks.