On this occasion our speakers will be Professor Will Harvey and Navdeep Arora from the University of Exeter Business School who will, in a follow up from the very successful seminar hosted in December 2019, provide an update on the topic of professional misconduct, using data and research obtained in an 18 month period.
The last two decades have witnessed a sharp increase in large scale professional misconduct such as Enron, the Panama Papers, Tyco, VW and Nissan. Whilst the roles of professionals and professional services firms underlying these debacles have been clearly evidenced, it is less well understood how and why individuals commit professional misconduct.
Drawing on 18 months of interviews and focus group with 70 inmates at a federal prison in the United States, their research provides four insights into what led these previously successful and well-educated individuals to commit professional misconduct.
- First, individuals rarely set out to commit misconduct, but rather sleep-walk across ethical lines.
- Second, organisational factors dynamically interact with individual triggers to cause individuals to succumb to professional misconduct, when placed within a certain environmental context.
- Third, individual intuition rather than greed drives professional misconduct.
- Fourth, despite an emphasis on improving controls, compliance and normative behaviours, excessive regulation can surprisingly increase misconduct.
They argue that these insights are particularly salient in the post-coronavirus economy where individual professionals are likely to face unprecedented pressures of organizational cost cutting, aggressive financial targets, and regulatory changes.
Their data shows that under the pressure of aggressive control and compliance regimes, individuals conflate ethical issues with cost-benefit decisions, and therefore, interventions need to focus on individual behaviours rather than be simply mandated and enforced. They argue that the current one-size-fits-all “three lines of defence” approach through aggressive controls, compliance and training to drive normative behaviours is gradually crumbling with rapidly shifting regulatory boundaries. The compliance and controls regime related to pandemic-related actions, cryptocurrency usage for payments, and cyber risk protocols are just a few examples of practices that are blurring the boundaries between various professions and occupations, and need to evolve to “three lines of enablement”.
They suggest that three lines of enablement might include: i) A corporate governance and regulatory regime with evidence-based controls, rather than one-size-fits-all, ii) Data & AI driven insights for predicting, mitigating and preventing professional misconduct, and iii) behavioural interventions to empower and enable the desired conduct.
This will be an interactive session, allowing you to post questions in the chat window and interact with the speakers.
If you would like to join us please book your place via this link.