Weekend Reading: The Top Starling Insights Publications of 2024
This piece first appeared in Starling Insights' newsletter on December 22, 2024. If you are interested in receiving our thrice-weekly newsletter, among many other benefits, please consider signing up as a Member of Starling Insights.
Happy Holidays! In this, our last publication of 2024, we will review some of the articles, videos, Deeper Dive reports, and other publications that received the most attention on Starling Insights over the past year
In addition to our regular reporting, we look forward to sharing more videos and original research in 2025. If you enjoy the content that we offer, and you’re not already a Member, please do consider joining the Starling Insights community over the holiday break!
Compendium: Strong and Effective Supervision of Governance and Culture
In this In Focus article, Chris Gower , Executive Director of the Cross-Industry Insights Division at the Australian Prudential Regulation Authority (APRA), argues that culture and governance are matters that warrant focus from prudential regulators.
"It has long been recognised that deficiencies in governance and risk culture can be early indicators of potential financial risks," Gower writes. "However, in a world where complex non-financial risk is growing rapidly, global regulators are increasingly recognising that the key to viability is not only to require more capital and liquidity, but also for supervisors to require good governance and a sound risk culture."
Observation: Did Deloitte Miss a Nigerian Company's Massive Fraud?
In January, we featured a report from Forbes on how the U.S. Securities and Exchange Commission (SEC) had uncovered a startling case of financial misrepresentation involving a Nigerian company, the Tingo Group.
Despite Tingo receiving a clean audit from Deloitte that "verified" a cash balance of $462 million, the SEC found only $50 (no, not $50 million) in the company's accounts.
Deloitte was certainly not alone. A substantial portion of our coverage in 2024 has focused on challenges related to audit quality and professional conduct in the audit sector globally.
Deeper Dive: Physician, Heal Thyself
Earlier this year, Starling Insights published "Physician, Heal Thyself," a Deeper Dive report discussing global efforts to hold regulators accountable for their organizational culture and the outcomes such culture may drive.
"Physician, Heal Thyself" features contributions from Miki Bowman , a Member of the US Federal Reserve Board , Wayne Byres , past-Chair of APRA, and Charles Randell , past-Chair of the UK Financial Conduct Authority .
Compendium: An Interview with Dr. Terri Patterson
In this Peer Perspectives interview, Starling Advisor Dr. Terri Patterson , past-Chief of the US Federal Bureau of Investigation (FBI) 's elite Behavioral Analysis Unit, explains how policymakers can work to reverse the degradation of societal trust.
"We are currently seeing an unprecedented fraying of the trust in governing bodies and institutions," Patterson says. "In today’s polarized, 'us against them' environment, it becomes even more important for policymakers to guard against human cognitive susceptibilities when formulating policy recommendations and regulatory requirements."
Observation: Lloyds Identifies Risk Management as a "Blocker"
In April, it was reported by the Financial Times that Lloyds Banking Group , one of the largest financial institutions in the UK, was restructuring its risk management division following an internal review that identified it as a "blocker to [its] strategic transformation.
Chief Risk Officer Stephen Shelley stated in a memo that two-thirds of executives perceive risk management as obstructing progress, and less than half of the workforce believes in promoting intelligent risk-taking. The overhaul would primarily focus on non-financial risk management, aiming to facilitate faster operations with clearer roles and responsibilities, Shelley said.
Video: In Conversation with Amy Edmondson and Jamie Fiore Higgins
Over the past year, Starling Insights published a three-part video series featuring Amy Edmondson , the Novartis Professor of Leadership and Management at Harvard Business School , and Jamie Fiore Higgins , author of Bully Market: My Story of Money and Misogyny at Goldman Sachs, moderated by Gillian Tett of the Financial Times.
The series touched on the value of psychological safety, managing toxic work environments, and how to recognize risks associated with the normalization of deviance. Click the button below to watch the latest video and find links to the other videos in this series.
Compendium: The Regulatory Supercycle
In this Good Counsel article, Margaret Tahyar , Head of the Financial Institutions Group at law firm Davis Polk & Wardwell LLP , calls for small and mid-size banks to focus on improving governance and risk management to allow for further growth.
"[I]n this imperfect world, many banking organizations find themselves in situations where they must clean up enforcement actions or other supervisory smudges before the organization can grow or merge," Tahyar writes. "To prepare to grow into a larger, more complex organization and to be integration ready, a banking organization must keep its house in order."
Observation: UK FCA Launches Widespread Probe Into Misconduct Cases
In February, the FCA directed over 1000 banks, insurers, and brokerages to disclose how many cases of sexual harassment, discrimination, and other non-financial misconduct they had recorded since 2021, and how those cases were resolved.
When the FCA published the results of that probe in October, they showed that the number of misconduct cases reported had increased each year from 2021 to 2023. While the distribution of the specific types of misconduct reported varied across industries, bullying and discrimination were the most common, comprising 26% and 23% of cases, respectively.
Event: Starling's 2024 Compendium Launch Event
To coincide with the launch of our 2024 Compendium in June, Starling hosted a Launch Event featuring contributors to the current and past reports and select invited guests. Members of Starling Insights can access nearly 12 hours of session recordings on global regulatory developments, assessments of governance and supervision in the wake of the 2023 banking turmoil, and key topics in culture management.
While a small number of recordings are available on a complimentary basis to those who register for an "Observer" account, Premium Members can access the full set of conversations with our esteemed panelists and discussants.
Observation: Is Diversity Actually Good for Business?
In an article published in The Spectator earlier this year, London Business School Professor Alex Edmans considers whether the truism that "diversity is good for business" is actually true at all.
Edmans analyzes several of the widely-touted studies that ostensibly proved a connection between diversity and investment performance. In many cases, there are severe problems in their methodologies. In others, simple correlation is taken to imply causation. However, Edmans does not believe that companies should abandon the worthy goal of improving diversity altogether. Instead, they should be clear that this is a social goal, not a business-driven one.