Occupy movement helped shift thinking about the ethics of banking

November 30, 2012

Posted by Tudor Rickards

Andrew HaldaneAndrew Haldane, [image supplied] an executive director of The Bank of England, recently told a meeting organised by Occupy, that the protesters had touched a “moral nerve” for the financial sector. He might also have been referring to the Church of England

A year ago, the direct action group Occupy had targeted the London Stock Exchange [15 October 2011] then formed a protest camp at nearby St Paul’s Cathedral, until their eviction by police.

In his speech on socially useful banking as reported by the Bank of England, Mr Haldane said:

“Occupy has been successful in its efforts to popularise the problems of the global financial system for one very simple reason: they are right …
There is the quiet, but unmistakable, sound of a leaf being turned. If I am right and a new leaf is being turned, then Occupy will have played a key role in this fledgling financial reformation. You have put the arguments. You have helped win the debate. And policymakers, like me, will need your continuing support in delivering that radical change.”

An independent voice

Haldane has been speaking up in an independent fashion for a Bank of England director for some years. In 2009 at the hight of the credit crisis he challenged the argument that measures to restrict banking bonuses would lead to an exodus of talent from the UK.

His independent views have been aired from his position as executive director for financial stability of the Bank of England. He is known to oppose high velocity trading [HVT} practices which involve a form of computer-aided trades in micro-seconds. [A brief insight into the mind-boggling nature of HVT illustrates the arguments for a small financial transaction levy. This remains a controversial issue favoured by many European bankers but anathema to the City of London where it is seen as another potentially damaging Euro-scam]

Meanwhile, a new leader emerges

Now Andrew Haldane pepares for a new chief, Mark Carney, appointed this week [Nov 26th 2012] by the Chancellor George Osborne. Mr Carney is the governor of the Canadian central bank and will have new powers as Bank of England governor by the time Sir Mervyn King steps down [in June 2012].

Carney a former Goldman Sachs banker had previously ruled himself out. This, and his non-English status, made him an outsider for the post.
Sir Mervyn said Mr Carney represented “a new generation of leadership for the Bank of England, and is an outstanding choice to succeed me”

Carney is widely seen as a brilliant and independent minded figure, who will have his own ideas about a range of issues on which Andrew Handane has commented, maybe including the moral high ground held by the Occupy movement.

For students of leadership

For students of leadership, this transition of institutional power from one leader to another will make an interesting and living case study.


Guilt: a new insight into leadership effectiveness and pathologies

November 27, 2012

Guilt has been identified as factor associated with leadership effectiveness. We assess the promise of the GASP scale, and consider the absence of guilt in leadership pathologies

Citing the work of Professor Taya Cohen [image opposite], William Kremer of the BBC World Service suggests that guilt may be an under-researched factor of leader effectiveness.

Shame and guilt cultures

For background, he notes the work of American anthropologist Ruth Benedict, who as early as the 1940s identified shame cultures such China and Japan, and guilt cultures such as America:

In a 1946 study, [Benedict] distinguished between “shame cultures” such as Japan and China, and “guilt cultures” such as the US. Whereas the guilty conscience is a means of social control in individualistic societies, face, honour and ostracism have the same role in Eastern societies, including China and Korea. Although the distinction is controversial, research suggests that in some cultures shame can be a springboard to positive action. For example, one study found that Chinese managers in Hong Kong used shame to resolve conflicts, while separate research has found that US managers were more likely to use shame to punish employees.

Professor Taya Cohen from Carnegie Mellon University has looked at the correlation between guilt proneness and ethical action. Her work is directed towards understanding the role of moral character traits, such as guilt proneness, and why interactions between groups are characterized by more competition, greed, and fear than are interactions between individuals.

The GASP scale

The GASP scale has been described in the scholarly journal of personality and social psychology in an article by Professor Cohen and co-workers, Introducing the GASP scale: A new measure of guilt and shame proneness.

Another gasp

The GASP scale is simple enough to produce another gasp from traditional cognitive psychologists who would deny that anything credible can be extracted from a four item inventory. [I would argue on the contrary that the more imaginative the concept, the simpler the means needed for collecting initial quantifiable data]

Claims for the emerging research

The research suggests that leadership may be associated with feelings of guilt which are translated into actions of social benefit. I have heard variations of this from friends who acknowledge a sense of guilt instilled in them through a Catholic education.

Leaping to conclusions

I find the central idea of interest although the concept is one which risks too rapid evaluation. There is need for some thorough ‘map-making and testing’ here. Maybe Benedict’s guilt/shame distinction would be a starting point.

The absence of guilt

I find Professor Cohen’s work a refreshing addition to the leadership canon. Most of my life I have tended to dismiss guilt as a residue of social shaping and something to be overcome. However, a complete absence of guilt may be a contributing factor to the behaviour of leaders deficient in ethical judgements of their actions, and thus one explanation for the much discussed dark side of leadership.


Should the National Hockey League Players Association (NHLPA) be responsible for player safety on the ice?

November 20, 2012

Guy H.J. Bourbonnière,
Director of Canadian Healthcare & Educational Markets, and Comprehensive & Energy Solutions,
Ingersoll Rand

During this spring’s Hockey playoffs, Phoenix Coyotes winger Raffi Torres applied a vicious hit to the head of star player Marian Hossa of the Chicago Hawks. The National Hockey League imposed a 25 game suspension, which was quickly appealed by the Players association. The case reveals some interesting dilemmas.

An odd assumption

The NHLPA is made up of athlete members and executive leaders with the mandate to represent the players of the National Hockey League (NHL) and to guarantee that their rights as players are upheld under the terms of the Collective Bargaining Agreement. One of the odd assumptions is the players expect the NHL to protect their association members from one other’s misdemeanors.

The new collective bargaining agreement

The NHLPA is in the news [October 2012] as players come together to negotiate a new collective bargaining agreement with the NHL. There is no mention of the recent on-ice assaults.

The dilemma that the NHLPA player leaders have, is that while they attempt to work together to improve the financial position and working conditions of players, they also compete against each other every time they play a hockey game.

The game is quick, violent and dangerous. Often players break the rules to inflict forms of intimidation against each other (i.e. fellow association members) to win a game.

In fact, the NHL has to put new measures in place regularly to deter fellow association members from hurting each other in both premeditated and spontaneous violent actions. It is a real irony that the NHL has to impose regulations to protect fellow association members from each other.

Sometimes simple, sometimes serious

These regulations may be as simple as penalizing a team and player for a short period of time by reducing the number of players they can have on the ice surface during play. In more serious cases, the player can be suspended for a number of games, and forfeit his pay for those games that he is suspended.

On a regular basis, the NHLPA appeals these suspensions to protect the rights of the offending player. I wonder how the victim of the assault feels when his own player’s association is defending his assaulter. It makes more sense that suspensions be doled out by the NHLPA instead of the NHL.
The most recent example was during this spring’s playoff where repeat offender Raffi Torres applied a vicious hit to the head of star player Marian Hossa. The National Hockey League imposed a 25 game suspension which was quickly appealed by the NHLPA.

‘Who owns the problem?’

The NHLPA should re-write the charter on what constitutes a member in good standing, to include respect for their fellow members. Using their fists or sticks as weapons against each other should not be tolerated by the NHLPA. The NHLPA should not expect the NHL to have to protect players from each other.

Lindsay’s legacy

The NHLPA was formed by a heroic leader (and player) named Ted Lindsay (Duff, 2008). He formed the original NHLPA at a time when it was easy for owners to ostracize players who confronted the owners. It is now the time for a new heroic leader to come forward and move beyond the paradigm of a players’ association as a unified front vs. team owners. The players are extremely well-paid and are working under good labour conditions. The people who are hurting them and shortening their careers through assaults on the ice, are fellow members. An enhanced mandate of the NHLPA should include the enforcement of appropriate on-ice behavior and remove players who choose not to comply.

To go more deeply

Duff, B. (2008) Seven: A Salute to Ted Lindsay.1st ed. Olympia Entertainment
Kelly, M. (2012) Raffi Torres suspended 25 games by NHL for Hossa hit: Apr 21, 2012. Available at:
http://www.cbc.ca/sports/hockey/nhl/story/2012/04/21/sp-raffi-torres-suspension.html (Accessed: 15 August 2012)
Ross, A. (2010) ‘Trust and Antitrust: The Failure of the First National Hockey League Players’ Association, 1957-1958’, University of Guelph
Available at: http://uoguelph.academia.edu/JAndrewRoss/Papers/480136/Trust_and_Antitrust_The_Failure_of_the_First_National_Hockey_League_Players_Association_1957_-1958
(Accessed: 26 July 2012)
The Canadian Press. (2012) NHL reduces Raffi Torres suspension by four games, Available at: http://www.theglobeandmail.com/sports/hockey/nhl-reduces-raffi-torres-suspension-by-four-games/article4384878/ (Accessed: 15 August 2012)
CONSTITUTION OF THE NATIONAL HOCKEY LEAGUE PLAYERS’ ASSOCIATION [Online]. Available at: http://www.nhlpa.com/docs/about-us/nhlpa_constitution.pdf
2011-12 Official NHL Rulebook [Online]. Available at: http://www.nhl.com/nhl/en/v3/ext/pdfs/2011-12_RULE_BOOK.pdf

Image from

4.bp.blogspot.com


Is another Arab Israeli war about to break out?

November 19, 2012

Is another Arab Israeli war about to break out in Gaza? News reports of the last week suggest that is at least a possibility

 Sometimes global events seem to confirm the fatalistic view that as everything changes everything remains the same.  This week, [Nov 10-16  2012] the escalating bloodshed in Gaza and Israel seems too familiar to offer prospects of a meaningful peace process between Israel and its Neighbours.  

Too many war initiatives

There have been too many war initiatives followed by peace initiatives over too many years.

What the news reports are saying

The gulf between ‘maps’ of opposing views is well-illustrated in the following quotes taken from the BBC News Service and Reuters.

 Independent Jerusalem-based Palestinian newspaper Al-Quds

When Israel decided to assassinate Ahmed al-Jabari and continue its raids into Gaza, it chose to set the region ablaze militarily and politically… At a time when Hamas and the other forces expressed readiness to abide by the truce, the Israeli government made its party and electoral considerations top priority and thus decided to escalate the situation

Mordechai Kedar in the mainstream Israeli newspaper Maariv:

No doubt the liquidation of Ahmed al-Jabari is an earthquake in Gaza and around it… Israel should send clear messages to Hamas leaders: they cannot tour the world as diplomats by day and behave like terrorists by night.

Military correspondent Aluf Benn, in the Israeli broadsheet Haaretz:

 

The assassination of Jabari will go down in history as another showy military action initiated by an outgoing government on the eve of an election… Prime Minister Benjamin Netanyahu is interested in neutralising every possible rival, and Defence Minister Ehud Barak is fighting for enough votes to return to the Knesset. A war against Hamas will wipe out the electoral aspirations of the ditherer Ehud Olmert… and it will kick the ‘social and economic issue’ that serves the Labour Party off the agenda.

 

Nidal al-Mughrabi, Reuters

 Israel is losing popular support in the ‘new’ Middle East, analysts say. In an earlier clash, the three-week winter war of 2008-2009, many Palestinian rivals blamed Hamas’s rocket-firing bravado for bringing Israel’s military might down on Gaza.

That war ended with over 1,400 Palestinians in early graves and a territory scarred by bombing, shelling and invasion. Israel lost 13 lives in the lopsided battle, and Hamas licked its wounds.

This time is different. The Arab Spring has changed the Middle East, and Hamas has more powerful weapons.

“Hundreds of civilians may be killed if the Israelis invade,” says Ali Al-Ahmed [a Gaza resident]. “But once they leave, rockets will follow them home, so they would fail.”

Leaders we deserve?

The maxim that we get the Leaders we deserve is tested daily.  Rarely is the test carried out under such tragic circumstances.


Government Minister says definition of child poverty is flawed. What does that mean?

November 15, 2012

David Laws speaking on behalf of the Government says that the definition of Child Poverty is flawed and needs changing. But to understand what he means you need a ‘map’ about the nature of definitions

Tudor Rickards

The Government Work and Pensions Secretary Iain Duncan Smith will say in a speech today [15th Nov 2012] that simply focusing on income levels is too narrow and other factors should be considered.

The newly appointed Schools Minister David Laws added:

“Traditionally we have defined poverty simply by income. But this is not enough. The experience of child poverty is about more than whether their family income this week is low.”

Debate on the nature definitions may seem abstract and academic while children in deprived financial circumstances are in need of practical measures to help.

In one sense I agree. Progress is less likely if a subject is not understood.

Working definitions

I find it useful to think in terms of ‘working definitions’ which are provisional and useful ways of promoting conversation. If we agree in discussion, we have reached a common ‘platform of understanding’.

Lexical definitions

A dictionary provides a set of lexical definitions, sometimes indicating which are archaic [no longer of common usage].

‘Correctness’ of definitions

Based on the context of the Minister’s remarks, he was talking about a search for a definition that would be ‘correct’, that is to say a true representation of something which may be empirical or conceptual. Politicians and law-givers can create one form of legitimacy for a definition ‘Child Poverty is as it was defined under the Poverty of Children act’, or ‘the Poverty of Children investigation’. Politicians would naturally prefer to have a say in what the ‘correct’ definition is. This makes it easier to defend policies by reference to the definition.

It is important to be aware of a pervasive belief that there is a ‘correct’ definition in the stronger sense of capturing the essential features of whatever is being defined.

Essentialism

Professor Keith Grint has argued in his books that definitions of leadership assume ‘essentialism’, [the ‘real stuff’] whereas it may be more value to consider leadership as being defined in terms of non-essential terms such as interpretations of reality ‘as we see it’.

Theoretical definitions

Investigative research requires yet another kind of definition which makes clear the ‘map’ being examined in the research, and offers scope for further enquiry or ‘map-testing’. In this case, the ‘map’ is that of Child Poverty. IThe politicians are attempting to help in the drawing up of the new map.

Where’s the pain?

The clinical and ‘scientific’ approach sets aside real world suffering and pain. Political scientists have the trickier task of indicating they are primarily concerned with more than definitions.


Greece Demonstrates, Syria bleeds

November 14, 2012

In Greece, Political leaders continue to battle for the country’s economic survival. The ruling coalition is introducing increasingly unpopular austerity concessions. Refugees from Syria find there is little compassion for their plight. Leadership lessons are hard to find

The political and economic turmoil in Greece continues.

Last week [7th November 2012] judges and doctors participated in a general strike. As politicians deliberated, over 80,000 angry protestors including a group of policemen in uniform, demonstrated outside the Parliament buildings.

The Greek dilemma

The Greek dilemma is increasingly seen as misery and decline inside the Economic community, or misery and decline outside it.

If Greece leaves

The most vulnerable members of the Economic community such as Greece, Spain and Portugal all have the most recent history of military dictatorships ‘rescuing’ the country at its time of need. Is there any evidence of that about to happen? It seems at least a possibility, if Greece leaves the EEC.

Meanwhile, in Syria

Meanwhile the national turmoil has implications for the bloody conflict waging in neighbouring Syria. [14th November 2012]. Even the cold statistics make heart-breaking reading.

The Syrian Red Crescent charity says two and a half million people have been displaced within Syria, and a UN refugee agency considers the estimate on the conservative side. Nearly half a million Syrians have fled to neighbouring countries, the UN says. Figures of more than thirty people have been killed since the uprising against President Assad began over the last eighteen months.

Civilians flee in their thousands into camps on the Turkish border.

Life savings for an eight mile boat journey.

I watched a BBC Newsnight report last night, which showed desperate Syrian families prepared to spend their life savings in a risky crossing of eight miles, into Greece. Hardly surprisingly, those who arrive find the bitterness of people at their own plight, and a mood of heightened xenophobia against immigrants in general.

Leadership, what leadership?

I would like to draw some instructive leadership lessons from these stories, but they are hard to find. Perhaps there is the paradox to consider of the weakness of strong leaders and the limits to autocratic rule. Maybe we should think about the inter-connectedness of events which make dominant theories of leadership too simplistic to help us understand events and find actions which protect the interests of those most at risk.


Lord Alistair McAlpine’s story

November 12, 2012

This morning [Nevember 6th 2012] I came across my unpublished notes concerning a story written by Lord Alistair McAlpine. It seems a good time to publish them in this era of scandals concealed and scandals revealed

The notes were tucked away in a book, and seem to have been written sometime in the late 1990s. I must have been collecting materials on political leadership, but I can’t recall completing them for publication.

Political intrigue

In the first of my notes, the author is writing about a political intrigue around a leadership challenge. He warns that the plotters have to be careful because “there was a time when the stalking horse won and stayed there for three terms (in office)”.

Hypocrisy and cynicism

In the second extract, I had marked up the following passage:

“Hypocrisy and cynicism are not uniquely the stuff of politics nor indeed of politicians. They are weapons of the second-rate in all walks of life … the tools of those who would only better their own positions. Those I write of have neither principles nor morals so they cannot be chastised for what they do”.

The trades are completely different

A final quote mused on “how strange it is that politicians have such admiration for those who succeed in business … The delusion explains a lot of the problems suffered by our nation … [because] the two trades are totally different”.

Disclaimer

The extracts are from Lord McAlpine’s work of fiction, Letters to a young politician, written around the mid 1990s. I re-read my copy of the book for this post.

You will find an excellent review of the book, by Andrew Marr, who exercises the reviewer’s right to avoid revealing how Lord McAlpine’s story turns out in the end.

Lord McAlpine has suffered from false accusations this week [Nov 6th-12th 2012]. The false allegations, repeated on the BBC’s Newsnight programme, contributed to the resignation of George Entwistle from the post of Director General of the BBC.