As an academic at heart, I have a self-confessed bias toward research. But in this case, there’s real value in understanding the full breadth and depth of these issues. One of the most important reasons is that we can debunk some of the myths that have acted as a security blanket to the industry. Too often, when things go wrong, business leaders blame a single “bad apple” as the cause of the problem. But focusing on an individual bad actor can obscure a culture in which people feel that misconduct in the pursuit of profit is tolerated, or even condoned. The “bad apple” theory acts as an excuse for not doing the hard work of cultural reform. In this process of blaming bad apples, leaders fail to look at what’s happening to the rest of the barrel. What kind of environment has let the rot set in? Understanding the full complexity of what forms a culture is important, but our unique position within the financial system means the Federal Reserve Bank of New York must do more. Our Role in Achieving Progress Three principles—“connect,” “convene,” and “catalyze”—guide my thinking in this area. Connecting people with the latest data and research—and sharing experiences—gives them the insights and tools they need to make change. Conferences like this one are critical—as is our online research hub, which acts as a clearing house for the latest information and initiatives from a wide range of organizations. But, that’s not enough.
What Do We Do to Get to a “Good” Culture? 1/3  BIS central bankers' speeches  The second thing is we need to understand what contributes to a good culture, and what allows a bad one to flourish. What fosters an organizational culture where people feel empowered to speak up? And what leads to a work environment where employees feel emboldened to commit fraud? That’s one of the things I’m most looking forward to in today’s conference. I can’t wait to hear the insights from such a variety of voices. Looking beyond our own narrow frame of reference to other fields of study, like organizational psychology, will help us understand how to achieve the progress that’s so desperately needed. Behavioral science really gets to the root of how human nature interacts with an organization’s processes. Everything from how we set goals to how we motivate our staff to achieve those goals has an effect on culture, for better or for worse. This is where the rubber hits the road for most organizations, in the financial services industry, and beyond. We’re also going to hear from experts on the role technology plays, including the ethics of data handling, and what artificial intelligence means for relationships with customers. And I’m particularly looking forward to hearing about how diversity, something that’s a strategic priority for me and this Bank, affects cultural norms. This includes diversity not only in terms of race and gender, but diversity of thought and experience, which also affects an organization’s culture and decision-making.