Modelling the desired behaviors sets a powerful example and serves as a form of behavioral risk mitigation. All of these actions reflect choices that a firm makes, either implicitly or explicitly, that can build cultural capital. On the other hand, cultural capital can also decline or deteriorate as a result of internal choices. For example, overt incidences of misconduct such as a trading scandal or a legal issue, deviations between employees’ actual experiences and a firms’ stated values, or observations of 2/5  BIS central bankers' speeches  inappropriate behavior that is tolerated or even rewarded can all contribute to the depreciation of a firm’s cultural capital. This decline can be self-reinforcing as certain behaviors are rewarded and individuals advance in an organization, or the composition of the workforce changes as employees choose to work at firms with higher cultural capital. The Pandemic’s Impact on Cultural Capital While the discussion so far has focused on how internal choices that a firm or its employees make can impact cultural capital, it is equally true that external factors have the potential to have a similar impact. For example, changes to social norms around what constitutes acceptable workplace practices can alter behavioral norms inside a firm. The nation-wide racial justice movement is another example of an external factor that could impact the internal culture, based on the choices a firm makes in its response. The current COVID-19 pandemic will also surely impact cultural capital in unpredictable and enduring ways.

At a 2017 conference, hosted by the New York Fed, representatives from across the industry came together to discuss how boards of directors assess their firms’ cultures, hold management accountable, the benefits of data and benchmarking, and finally, the role of performance management and incentives.4 Since then, several firms have started to use big data to perform network analysis to understand how culture is transmitted through an organization. Others have further honed their ability to gather qualitative data and interpret it in new ways. There is a greater recognition that there are no simple and straightforward metrics to tell them where they stand vis-à-vis cultural capital.5 Rather, these firms are regularly experimenting with new ways to identify patterns within complex systems that are continuously evolving. A number of firms have recognized that the data they gather must be contextualized. Cultural capital is not a single statistic; one part of a firm could have generous stores of it, while another department or geography requires more focused investment and attention. From the accumulation perspective, building cultural capital means investing in the way the organization approaches everything it does, including defining its purpose, setting its business strategy and risk appetite, training, communications, decision-making, prioritization, compensation practices, and how employees are incented to interact with colleagues, clients, and customers. A critical part of sustained investment is that business leaders and boards of directors see it as their responsibility to set the tone from the top.