By “choice architecture,” I mean the broad array of options that promote decisions aligned with the values and goals of your respective firms.5 How choices are presented can have a dramatic impact on outcomes. Taking account of ordinary, human biases —including the ones I just mentioned—and organizational culture can help you present options in a manner that yields better results. In the world of risk controls, individuals face choices every day—choices whether to walk right up to the line of appropriate behavior and risk crossing it; choices to get more or less compensation in exchange for riskier behavior; and choices to raise their hands (or not) when they suspect that something has gone awry. In my view, effective controls require an appropriate balance of narrowly focused, prescriptive rules, and broader principles and standards. The precise balance will vary, depending on the task and the firm. But regardless of the setting, a thoughtful set of risk controls can improve the choices that employees make. One other word of advice on choices. People need time—time to stop, breathe, and ask for help if they need it. Making decisions sooner than necessary can lead to mistakes. As human beings, we do not always see consequences in the first instance. We need time to process. Of course, time can sometimes seem like a luxury. Time is, after all, money—or so we have been told. But the consequences of making the wrong choice because you are in a hurry can be far more expensive.
Lawyers, for instance, can be disbarred, and complaints against them can become matters of public record. That is added incentive to maintain the skills, character, and other qualifications required to become (and remain) a member of the bar. And, critically, professions do not stop improving. Lawyers continue—I hope—to seek a more just society. Doctors, a healthier one. I do not mean to call for the equivalent of the legal bar for bankers—although it might not be a bad idea. But there are elements of professions that could be useful. For example, forums like this one facilitate information sharing and promote a sense of community. A code of professional conduct is another example. Again, I refer you to the work of the Banking Standards Board, 5/7  BIS central bankers' speeches  which has developed a “Statement of Principles for Strengthening Professionalism.” Like Bill Dudley, I have argued that banking would benefit from a misconduct database. 15 Records of employee misconduct would be available to future employers to combat the so-called “rolling bad apple” phenomenon. Hopefully this would encourage more careful choices by bankers in the same way that the risk of disbarment prompts lawyers to think about the long-term consequences of their decisions. None of these ideas is a magic bullet. But they may be helpful as you consider how the first line of defense and the financial services industry develop as a profession. Conclusion: professional courage Let me end with one final thought on professionalism.