Most business leaders harbor a deeply-rooted belief: Offices as sanctuaries of corporate integrity, bustling with industrious individuals who diligently toe the line of right conduct under the leader’s watchful eye. Indeed, that’s a major reason why many business leaders want their employees in the office: they feel they can keep control, ensuring compliance with laws, rules, and policies. However, a recent peer-reviewed study in the European Financial Management journal comes to puncture this inflated balloon of conventional wisdom: Bankers working from home, while brewing their morning coffees in pajamas, have been setting a higher ethical standard than their well-heeled office counterparts.
That certainly puts a different twist on the demands by JP Morgan and Goldman Sachs that their bankers work from the office five days a week! These major banks could be unwittingly opening the door for greater financial misconduct by forcing in-office work.
Financial conduct in a remote world
Imagine a trader, comfortably ensconced in a cozy home office, engaging in remarkably fewer instances of financial misconduct than their counterparts in the tumultuous trading floor. It’s a plot twist that could give a Hollywood scriptwriter a run for their money.
This dramatic revelation was born from the meticulous analysis of data from one of the top five U.K. banks. During the year-long period of lockdown, researchers scrutinized misconduct reports relating to 162 traders. The resulting data unveiled a startling truth: traders working from home had a modest 7.3% chance of sparking a misconduct alert, while their office-going brethren had a spine-chilling 37.6% probability.
In other words, the hallowed office, often hailed as a paragon of professionalism and integrity, was home to over five times more instances of misconduct than the remote workplace.
Unethical behavior is contagious
Unethical conduct, it seems, is as contagious as a yawn during a monotonous Monday morning office meeting. Like a chuckle that leads to a laugh riot, one wayward trader can lead to an avalanche of similar behavior.
This trend is not dissimilar to a classic high school scenario where the temptation to “fit in” can lead to a spiral of poor choices. Even within the hallowed halls of finance, no one is immune to the infectious nature of unethical behavior.
The researchers assert that removing a trader from an office environment riddled with unprofessional conduct significantly reduces their likelihood of engaging in similar indiscretions. The analogy is akin to moving a box of doughnuts away from a group of dieting colleagues–when temptation is out of sight, it’s also out of mind.
The surprising strengths of remote work
The phenomenon of remote work, once considered a novelty limited to Silicon Valley and independent freelancers, has revealed itself to be a mighty fortress against unethical behavior.
One key reason lies in the diminished access to inside information and market rumors–both potent catalysts for financial misconduct. Office environments often provide ample opportunities for such information to be exchanged, like over a clandestine chat during a smoke break or a whispered conversation in the corner of the canteen. In contrast, a home office makes the window for such under-the-table information exchanges elusive.
The hidden enemy of cognitive biases
Before we go any further, let’s pause and consider the silent saboteurs of ethical behavior: cognitive biases. These deeply ingrained mental shortcuts often shape our behavior in ways we don’t recognize. Like invisible puppeteers, they subtly pull our strings, guiding our actions, often leading us astray in thinking about hybrid work, as I tell my client companies trying to figure out their return-to-office plans.
In the case of misconduct, let’s focus on two specific cognitive biases that provide valuable insight into our discussion: the confirmation bias and the status quo bias.
Confirmation bias, a classic villain in the plot of rational thinking, involves favoring information that confirms our pre-existing beliefs or values. If a trader firmly believes that bending the rules is a norm (albeit unspoken) in the high-stakes financial industry, when they hear snippets of chatter about a colleague who manipulated market rumors for gain without facing consequences, their belief is reinforced. This reinforcement might nudge them further down the unethical path.
In an office environment, where information (and misinformation) flows freely, confirmation bias has a ripe playground to reinforce harmful beliefs. Conversely, the isolation of remote work might shield traders from such damaging confirmations, leading to a decrease in misconduct.
Status quo bias, another way our minds deceive us, is our preference for keeping things the same, especially when faced with change or uncertainty.
For a trader who’s grown accustomed to the cutthroat office culture, where bending rules is sometimes deemed a necessary evil to stay ahead, the status quo bias might make them reluctant to alter their behavior, even in the face of clear ethical guidelines. They might perceive a change towards ethical conduct as a risky shift, threatening their standing or success. In a home setting, away from the immediate pressures and ingrained norms of the office, this bias loses much of its persuasive power.
When cognitive biases are at play, achieving a culture of integrity can be akin to climbing a greased pole. However, recognizing these biases is the first step in combating them. In a remote work setup, confirmation bias and status quo bias have fewer chances to interfere, which could explain the surprising upswing in ethical behavior observed among remote workers.
The future of ethics is hybrid
If the future of work is, indeed, a hybrid model, we find ourselves on the cusp of a unique opportunity to reshape the norms of ethical conduct. It’s a strange yet thrilling thought that a domestic environment–often punctuated with errant kids, barking dogs, and overflowing laundry baskets–could be the secret weapon in the battle against financial misconduct.
So, as we embark on the journey to redefine work, it’s high time we discarded the antiquated, office-centric playbook.
The next time you think of honesty and ethics, don’t visualize gleaming office towers filled with well-dressed professionals. Instead, picture the humble home office–unpretentious yet powerful, an unassuming beacon of financial integrity.
Good behavior isn’t dictated by where you sit, but by the ethical stand you take. No matter where we choose to log in from, integrity must always be a priority.
Source: Fortune
