about human behavior. 1 again, this is a good thing. i am particularly fond of a description of one method, coined by cass sunstein and richard thaler : the “ nudge. ” i believe compliance will, in the near future, supplement an existing framework that restricts poor choices with new ways to encourage good choices. here is a classic example of the type of change i have in mind. when employers recommend that their employees “ opt in ” to retirement plans, they achieve a far lower rate of participation than when employees are automatically enrolled, but may “ opt out. ” what accounts for this? the economics of the plan work either way. and the incentives have not changed. employees are not promised more money if they choose not to “ opt out ” than if they choose to “ opt in. ” but a better result is achieved by “ nudging ” employees simply by changing the starting point. 2 compliance programs may be more likely to achieve their desired effects if they are based on studies of how people actually behave. here are three ideas that would benefit from continued empirical study. 1 / 6 bis central bankers'speeches first, can we increase participation in voluntary training and education programs by prepopulating enrollment? that is, can we rely on the same type of inertia that keeps employees from opting out of retirement savings programs? i ’ m speaking here of programs above and beyond the minimum training firms already require. these might explore in greater depth the ethical decisions that come up in corporate life — in particular, times when the corporation ’ s interest and a client ’ s interest appear to diverge. second, i am interested in the potential for certain employees to serve as carriers for social norms. their identification is not always based on rank in a corporate hierarchy. step one is to find out who these people are. we might, for example, attempt to map electronic communication within an organization. we might then ask how these can people become living, breathing “ nudges ” in favor of better behavior. third, and more generally, i wonder whether our approach to compliance is, at times, too rulesbased. this is a classic “ rules versus standards ” debate, that is familiar to many lawyers. 3 a surfeit of rules may cause employees to believe that they are not trusted. this could create the misimpression that it is someone else ’ s job to consider long - term consequences or what is the right thing to do. now, i am

want to raise one final topic with you today, which, to my mind, is related to the question of accountability. it is the risk that control groups in large institutions can evolve to a place where they are driven by their own self - preservation or immediate concerns. if the compliance regime — inclusive of policies, procedures, testing, monitoring, etc. — is geared toward shielding the compliance function itself from blame or responsibility, then it has failed to serve the institution. it also risks becoming irrelevant. compliance has to resist adopting a “ check the box ” mentality — slavishly adhering to formal rules while ignoring standards of suitability, integrity, and fairness. compliance personnel are professionals. as such, they are entrusted to exercise judgment. they are expected to make conscious choices, not merely to rely on the outcome of a particular process. 6 lawyers are not immune from a similar criticism : permitting the avoidance of legal risk to become a goal in itself, rather than a tool for advancing the purposes of the organization. when an acutely litigious mindset prevents a company from launching a cross - organizational review, or 5 / 6 bis central bankers'speeches writing a self - critical report, the near - term goal of managing discovery has overrun the broader interests of the company in honest self - assessment and improvement. a legal group should not automatically veer toward shutting down self - reflection for the sake of being able to rest easy about litigation. similarly, compliance cannot rest easy when its processes succeed in building a paper trail, but do little to uncover and resolve problematic behavior. in short, some risks are worth taking. thank you for listening to my remarks today. i am happy to take any questions. 1 see generally donald langevoort, “ behavioral ethics, behavioral compliance, ” in research handbook on corporate crime and financial misdealing ( jennifer arlen, ed. ) ( 2016 ). 2 see michael barr et al., “ behaviorally informed regulation, ” in behavioral foundations of public policy ( e. shafir, ed. ) 440 – 64 ( 2012 ). 3 see kathleen m. sullivan, “ the supreme court 1991 term : forward : the justices of rules and standards, ” 106 harv. l. rev. 22, 57 ( 1992 ) ( arguing that the choice of a rule or a standard depends on where the “ legal directive... fall on the continuum of discretion ” — that is, how much do we trust the decisionmaker? )