An “Unspeakable” Driver of Banking Culture


In the Harry Potter books and movies, there is a character so evil, so foul, so corrupting that ordinary people refused to say his name.  Instead they referred to him as “he who must not be named”!  Of course that was the evil Lord Voldemort, the arch-villain of the series and the nemesis of the hero, Harry Potter.  He-Who-Must-Not-Be-Named-voldemort-vs-aro-21933014-495-660

Rather than just not liking him, the real reason people refused to speak his name was because a Taboo had been placed upon the name so that Voldemort or his followers would be able to trace anyone who utters it and destroy them.

In other words, don’t talk about him and you won’t get in trouble!

The “Unspeakable” in Banking

Corporate culture is a collection of accepted and habitual actions and behaviours that determine how employees at all levels conduct their work, how they treat each other and customers.  Many times these habitual behaviours are rooted in beliefs about the “way things are (or should be)” or “how to survive and get ahead in this company“. Many of these beliefs are almost invisible and rooted in the stories employees regularly hear in the workplace (and the bar) and the way their boss behaves towards them.

In the case of modern banking there are strong yet invisible beliefs that seem to be industry wide and not just limited to one particular bank. One of the reasons for this homogeneity of culture in modern banking is the ease at which bank executives and senior managers move from one bank to another. It is not unusual for a senior executive to have worked at two or three different banks in the space of 10 years.  Some even take their whole teams with them when they move.  So it is easy to see how beliefs and behaviours about how to get things done, make money and be accepted can quickly spread.  And these ways of acting are often fuelled by the behaviour of the senior leaders as well as the policies and procedures they put in place. A self-reinforcing system.

Those who tend to challenge these “accepted rules” or behave differently tend to experience considerable peer pressure to conform and if not, they get quickly ostracised by the subculture they belong to.  Sounds more and more like “he who must not be named”! Talking about “it” gets you in trouble.

And the biggest “unspeakable” in banking is compensation and bonuses. Traders and employees are often told by their bosses not to talk about their compensation and bonuses. Bonus negotiations for top managers seems to be a very closed-door affair, with often heated debates and shouting about how much I got versus how much I should get!

Even when pressed by the regulators to disclose compensation guidelines and bonus policies, senior banking executives resist and have a lot of reasons why large salaries and a secretive bonus system is necessary. The biggest reason is: “we need large salaries and big bonus opportunities in order to attract the best and the brightest, especially since banking is a very complex business and requires top intellects to manage and deliver”. And who created the complexity? Who created the unfathomable derivatives like the Credit Default Swaps that helped bring about the 2008 global meltdown? So is it these same best and brightest that are responsible for over $150 billion in fines between 2009-2013? In this case too much cleverness seems to be a liability!

The large compensation and bonuses may be justified in some way since investment banking is stressful and complicated, but it also drives certain types of behaviours, which then build a certain type of internal corporate culture. And here is where the banking establishment puts their head in the sand. They are unwilling to talk about the possibilities that their compensation policies (and other internal policies and procedures) may actually be driving the wrong types of behaviours.

For those of us who have spent the past 30 years studying and consulting on corporate culture, it is a proven principle that internal policies and procedures, and especially compensation policies, are among the top three ingredients that drive employee behaviours and determine corporate culture (along with the behaviour of senior leaders, hiring profiles and national culture elements).

parking wardensHere’s a Simple example.  Parking meter officers on a bonus system tend to write more citations than those on a salary. Those selling stocks tend to push those with the highest commission rate, whether or not they are good for their clients.  The list goes on and on.  It’s human nature. Why should banks be any different?

But at least some in the banking world are waking up to the principle of compensation Apple_barrelpolicies driving behaviour. Mark Carney, Governor of the Bank of England, recently spoke about the culture of banking this way: “it’s not a case of a few rotten apples. We’ve had PPI, Libor, forex and all the rest. The problem is probably the barrels”.

If we are going to reshape the culture of banking to bring back public trust and reduce the outrageous number of unethical activities and huge fines levied on banks, then we need to have a real open and honest debate about all the drivers of corporate culture in banking, especially compensation and bonuses.

Let’s face “He Who Must Not Be Named” head on.


Posted by:  John R Childress

Senior Advisor on Corporate Culture, Leadership and Strategy Execution
Author of LEVERAGE: The CEO’s Guide to Corporate Culture
Visiting Professor, IE Business School, Madrid


PS: John also writes thriller novels

About johnrchildress

John Childress is a pioneer in the field of strategy execution, culture change, executive leadership and organization effectiveness, author of several books and numerous articles on leadership, an effective public speaker and workshop facilitator for Boards and senior executive teams. In 1978 John co-founded The Senn-Delaney Leadership Consulting Group, the first international consulting firm to focus exclusively on culture change, leadership development and senior team alignment. Between 1978 and 2000 he served as its President and CEO and guided the international expansion of the company. His work with senior leadership teams has included companies in crisis (GPU Nuclear – owner of the Three Mile Island Nuclear Plants following the accident), deregulated industries (natural gas pipelines, telecommunications and the breakup of The Bell Telephone Companies), mergers and acquisitions and classic business turnaround scenarios with global organizations from the Fortune 500 and FTSE 250 ranks. He has designed and conducted consulting engagements in the US, UK, Europe, Middle East, Africa, China and Asia. Currently John is an independent advisor to CEO’s, Boards, management teams and organisations on strategy execution, corporate culture, leadership team effectiveness, business performance and executive development. John was born in the Cascade Mountains of Oregon and eventually moved to Carmel Highlands, California during most of his business career. John is a Phi Beta Kappa scholar with a BA degree (Magna cum Laude) from the University of California, a Masters Degree from Harvard University and was a PhD candidate at the University of Hawaii before deciding on a career as a business entrepreneur in the mid-70s. In 1968-69 he attended the American University of Beirut and it was there that his interest in cultures, leadership and group dynamics began to take shape. John Childress resides in London and the south of France with his family and is an avid flyfisherman, with recent trips to Alaska, the Amazon River, Tierra del Fuego, and Kamchatka in the far east of Russia. He is a trustee for Young Virtuosi, a foundation to support talented young musicians. You can reach John at or
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1 Response to An “Unspeakable” Driver of Banking Culture

  1. Pingback: The Blind Leading the Blind: Conduct Risk in Financial Services | John R Childress . . . Rethinking

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