is uncovered by the authorities. rules may be followed to the letter, but not in spirit. all of this increases misconduct risk and potentially damages the firm and the industry over time. to be clear, i am not saying this is easy. culture is difficult to assess because it is not a single, point - in - time metric, but a multi - dimensional concept with different implications for different parts of an organization. this complexity suggests that no single metric, solution, approach, or template will work for every firm in every circumstance. 5 consider the different roles of key players in mitigating misconduct risk and building and sustaining a healthy culture. the board of directors, senior management, staff, investors, industry groups, and the official sector might all see and assess aspects of a firm ’ s culture differently. today, i will focus on a few of these stakeholders. boards of directors in 2017, the new york fed hosted a culture measurement workshop that included a panel of board members from various financial firms. there was consensus among the panelists that board members play a critical role in a firm ’ s governance structure and culture. moreover, corporate boards independently assess whether management is setting the right tone and hold management accountable for any gaps between a firm ’ s values and its actual business practices. proposed guidance from the federal reserve suggests that the responsibilities of an effective board of directors include setting strategy and risk tolerance, supporting independent risk management, managing information flows, ensuring appropriate expertise, and holding senior management accountable for effective execution. 6 behavioral indicators can help boards understand their firms ’ cultures and identify potential trouble spots within the organization. corporate boards use various methods to obtain information and assess culture, such as meeting with many levels of employees, receiving thirdparty assessments, and conducting 360 reviews of the ceo and top leaders. organizations like the u. k. banking standards board ( bsb ) can provide outside benchmarking data against which to measure the culture within one ’ s own firm. 7 corporate boards for financial firms may also import practices and lessons from other industries. finally, the board members that participated in the new york fed ’ s workshop agreed that a board ’ s own culture matters ; it needs independent 2 / 6 bis central bankers'speeches voices, diverse perspectives, and opportunity for debate. senior management the federal reserve published a proposal on corporate governance that states that senior management is responsible for the execution of strategy and day - to - day operations consistent with the firm ’ s stated risk appetite, ensuring safety and soundness

’ ve not been challenging ourselves enough. most ceos will tell you that that their people are their greatest asset. i know that to be true. that ’ s another reason why an inclusive culture is something that ’ s so important, and needs to be embedded across an organization. it ’ s not enough for diversity to live in hr documents and policies. we need to create an environment where everyone has the potential to flourish ; to bring their best, most innovative, and creative selves to work ; and to do the best work of their careers. so how do we make progress? we need to have honest and open conversations every day. not just about work performance and ideas, but on everything. we need to make sure that everyone — regardless of their background, their age, the color of their skin, their sexual orientation, or their gender identity — feels their perspectives are heard and valued. creating an inclusive culture has no end date. like so many aspects of culture and values, it ’ s not a project with a deadline, where we can say, “ ok, we ’ re done now. ” instead, we need to be constantly reassessing our goals, refining what we do, and how we do it. we need to be vigilant, attuned to change, and open to new ideas. because it ’ s one thing to create an open culture, but a much harder challenge to keep it that way. i ’ m reminded of a quote by brene brown, which i believe sums this up : “ to not have the conversation because of discomfort is the definition of privilege … ” when we step back, when the dialogue — however uncomfortable it may be — stops, or is never initiated in the first place, is when there ’ s a problem. it ’ s the conversations that aren ’ t spoken that erode trust, alienate people, and take us back. i ’ d like to conclude where i began. i spend a lot of time examining data, and it ’ s a source of constant disappointment and frustration that lgbt people, women, and people of color continue to have less economic opportunity than their straight, white, male counterparts. creating equality of opportunity at the national level is a challenge the united states continues to struggle with. but it ’ s both the right thing to do and the only way we ’ ll reach our full economic potential. creating a more diverse — and equally important — a more inclusive federal reserve is a key 2 / 3 bis