New Video: "Normalization of Deviance
We are excited to share the next installment in our video series with Amy Edmondson and Jamie Fiore Higgins “Normalization of Deviance". In this episode Amy and Jamie discuss the process by which bad outcomes can arise when small deviations from formal standards become the norm ("the way things are done around here") over time.
The Threat of Operational Risk in Canada
In a recent report, credit rating agency Morningstar DBRS discusses the increasing threat of operational risk to Canadian financial institutions. The report notes that "exposure to these risks has grown substantially", driven by rapid technological advancements, increased reliance on third parties, geopolitical tensions, and large-scale mergers.
Deeper Dive: Physician, Heal Thyself
In recent years, banking sector regulators and supervisors have been seen to suffer from the same cultural and behavioral ills that trouble the firms they oversee, the Deeper Dive argues, even as these officials insist that firms do a better job of managing their own culture and conduct related risks.
Nero-Moments: How Collapse of Social Trust Leads to State Breakdown
Public trust in the US federal government has plummeted this decline threatens social stability, as mutual trust and cooperation are crucial for societal cohesion. Historical examples, like Nero's fall, illustrate how the collapse of support networks can lead to state disintegration. Understanding the sociological and psychological factors behind such collapses is essential for predicting and preventing similar outcomes today.
Challenges with Supervision
Last year’s bank failures left many asking, "Where were the supervisors?" Warning signs may be obvious in hindsight, but only serve to demonstrate that current oversight is overly reliant on supervisory judgement. So long as culture and risk governance remain a matter of subjective judgement, regulators and firms will remain challenged in deciding when intervention is necessary.
