The CFA Society VBA Netherlands Ethics Committee is pleased to invite you to its 2018 seminar:
The Slippery Slope:
Recognizing and overcoming ethics challenges
What can past ethics challenges teach us about future behavior? We have invited Nick Leeson, Johan Graafland and Wijnand Nuijts to help us learn how we can recognize and avoid, or even prevent, the slippery slope into unethical actions.
The collapse of Barings Bank and Nick Leeson's role in it is one of the most spectacular debacles in financial history. When the bank collapsed in 1995, it was described by the media as a 'wake up call' and that something like this 'could never happen again'. Yet, more than two decades later, there continue to be countless cases of rogue trading, financial scandal and corporate fraud in many industries around the world, from Jerome Kerviel at Societe Generale (2008) and Kweku Adoboli at UBS (2011) to the collapse of Lehman Brothers, Enron and more recent major corporate fraud such as the 2015 VW emissions scandal. Despite huge advances in technology, security and IT, at the heart of all of these cases lies human error and poor judgement. It is because of this human element that Nick's story remains as relevant today as it ever has been, and resonates with such a wide range of audiences.
Which leads to this dichotomy between the human element and trustworthiness: Today, there is more recognition that trustworthiness contributes to the functioning of markets. Trustworthiness increases trust, stimulates cooperation and diminishes transaction costs. Trustworthiness and trust are important conditions for societal acceptance of a free market society. If society believes that financial institutions do not exhibit integrity and due care in their dealings with customers, citizens will be more inclined to distrust these institutions and support government regulations that force them to consider customers' interests. After discussing the meaning of integrity and due care in the context of banking, prof. Johan Graafland will present the results of a recent representative survey among 5,877 Dutch citizens that inquired perceptions on due care, trust and support of free banking. He will show evidence that perceived due care affects trust in banks and that distrust fuels support of government regulation of financial institutions.
Although Nick Leeson's presentation is his personal story surrounding the collapse of Barings Bank for which he admits full accountability, he also speaks openly and candidly about the culture which existed at the time and the lack of accounting safeguards that ultimately led to the bank's collapse; the perfect segue into the presentation of Wijnand Nuijts. Wijnand will discuss the 'tone at the top' with a focus on how culture and behavior at board level impacts behavior within a (financial) institution and how measuring and influencing (creating awareness of the impact) behavior and culture can be used to internally to improve integrity as well as ethics.
Dealing with issues regarding ethics, trustworthiness, transparency and culture has become a key part of the job for financial professionals. Rebuilding trust and maintaining the integrity of financial markets is an ongoing process for all industry participants. By learning from past mistakes and applying the latest academic research and best-practices, the sector has made significant steps towards a better relationship with stakeholders. However, there is still much to learn and much work to be done.
This seminar is part of the ongoing outreach efforts of the CFA Society VBA Netherlands Ethics Committee to discuss relevant topics with industry participants and stakeholders. We believe that a continued focus on ethics an integrity is integral to shaping the future of our sector.
14:00 Welcome by the society. Introduction by Susan Spinner, CFA
14:15 Nick Leeson: The Failings of Barings Bank - Risk & Control; How It Is Still Relevant Today
15:15 Johan Graafland: Due care, trust and freedom of banking
16:05 Wijnand Nuijts: The impact of culture and behavior at board level
16:35 Panel discussion with Q&A moderated by Susan Spinner, CFA
17:05 Closing remarks
17:15 Networking drinks
18:30 End of program
Everyone is welcome to attend. Registration is required.
Nick Leeson, former Barings Trader
Nicholas William "Nick" Leeson (born 25 February 1967) is a former derivatives broker whose fraudulent, unauthorised speculative trading, for which he was sentenced to prison, caused the spectacular collapse of Barings Bank, the United Kingdom's oldest merchant bank. Between 2005 and 2011 he had management roles at League of Ireland club Galway United. He is also active on the speaking circuit, where he advises companies about risk and corporate responsibility.
Johan Graafland, professor of economics and business ethics at the University of Tilburg
Johan Graafland is an economist and theologian who specializes in philosophy of economics, economic ethics, business ethics, corporate social responsibility, and a Christian vision on economics.
His research in the field of economic ethics concerns the morality of economic institutions, such as market forces and the role of the government. His research in corporate social responsibility comprises various conceptual and empirical studies. Between 2010 and 2013 he carried out research on behalf of the European Union into the factors that encourage companies to adopt corporate social responsibility and their influence on sustainability. Since 2017, Graafland has been leading a consortium of four research groups at Tilburg University, Erasmus University, VU University and Radboud University in a three-year study into the role of virtues in the relationship between market forces and human well-being.
Wijnand Nuijts, Head Governance, Culture and Organizational Behaviour Department, DNB
Wijnand is heading the Governance, Behavior and Culture department of De Nederlandsche Bank. Since its inception in 2010, he has been responsible for the national and international development of an innovative type of supervision that focuses on leadership styles, group dynamics and the quality of decision making by companies. Together with a multidisciplinary team of organizational psychologists and governance experts, he is responsible for conducting numerous examinations into the effects of behavioral patterns for the performance of Dutch financial institutions. Personally, he takes great interest in analyzing human behavior within the context of board decision-making processes and he is convinced that a closer focus on human behavior with organizations and their boards, will contribute to their sustainable (financial) performance. He has published various (scientific) articles about these topics and provides training to internal and external on how to integrate behavior and culture in their work. In addition to his position with DNB, he carried out an eximamination on behalf of the Health and Youth Care Inspectorate into the organizational culture of a large hospital in the Netherlands in 2016. Prior to his current role, Wijnand held various management positions at De Nederlandsche Bank and before joining the Dutch Central Bank he has been working as a corporate finance consultant and attorney-at-law. Together with his wife and three children he lives in the coastal village of Bergen, just north of Amsterdam.
Moderator: Susan Spinner, CEO CFA Society Germany and
Business Ethics Lecturer at Goethe Business School
Everyone is welcome to attend. Registration is required. Be sure to register now in order to ensure your place at this essential and sure-to-be-popular event.