Unconventional Wisdom: A Talking Blog by Steve Saenz

Governance Gone Wrong, Very Very Wrong...

7/14/2012

Wall Street executives say "wrongdoing is necessary"

At this stage of the game, the headline above should hardly surprise anyone. The first thing that comes to mind is that if 25% of Wall Street executives admit to knowing about or witnessing unethical behavior in their companies first-hand, imagine how prevalent it really is. The second is that cheating is not limited to Wall Street!

My personal opinion, which is simply based on direct and repeated observations, is that cheating, in its many forms, exists in all industries and walks of life. It is all around us.

As it turns out, I am currently doing some research on this subject as part of a project I am working on. Fortunately or unfortunately, revelations like this continue to crawl out of the woodwork like cockroaches.

About the Survey
Labaton Sucharow LLP today announced the results of its survey of 500 financial services professionals across the United States and United Kingdom. The survey is being released in conjunction with the launch of the firm's SEC Whistleblower Eligibility Calculator.

Article via Reuters
Video via CBS News
Securities & Exchange Commission: Whistleblower Program

Isolated Incident or Pervasive Patronizing? (err, Paterno-izing)

Speaking of cockroaches, the video below from Fox News describes how Joe Paterno and other top Penn State officials hushed up child sex abuse allegations against Jerry Sandusky more than a decade ago for fear of bad publicity, allowing the former assistant football coach to prey on other youngsters, according to a scathing report issued Thursday on the scandal. All of this makes me wonder, is this an isolated incident or yet another example of the pervasive patronizing that permeates our populace? You make the call, sports fans...

Every director of a public company should read six pages (97-102) of the former FBI Director Louis Freeh’s report on the Penn State sexual abuse scandal. Those pages contain his findings about his own client: the Board of Trustees of Penn State.

Source: WSJ Deal Journal

Are we predictably irrational?

Lest we focus too much on sensational headlines (you really can't make this stuff up) I want to introduce you to the work of a behavioral economist that just makes a lot of sense to me. In the video below, Dan Ariely (visiting professor @MIT and aspiring comedian) talks about the "bugs" in our moral code (i.e., the hidden reasons we think it's OK to cheat and steal). He uses clever studies to make his point that we are predictably irrational and can be influenced in ways we cannot grasp. According to Ariely, the most difficult thing for most of us is to recognize that, sometimes, we are so blinded by our own incentives that we cannot see how our conflicts of interest work on us...