Benjamin Lawsky, New York state’s superintendent of financial services, was the featured speaker at the 27th annual Briloff Lecture held Oct. 30 at the Anderson Center Chamber Hall.
Photo by Jonathan Cohen
State regulator addresses accountability gap in Briloff Lecture speech
November 5, 2013Tweet
Added to the angst that many people feel about the financial crisis is a sense of outrage that the parties responsible will never face any consequences. This condition is what New York state’s superintendent of financial services refers to as the accountability gap. Prosecution is reactive and only part of the solution, he says, and there needs to be an emphasis on changing the regulatory environment. Having served as both a federal prosecutor and state regulator, he has experience from each perspective.
Benjamin M. Lawsky was the featured speaker at the 27th Annual Abraham J. Briloff Lecture on Accountability and Society, held Oct. 30 at the Anderson Center Chamber Hall. Lawsky’s office regulates the operation of all insurance companies in New York, all state-chartered depository institutions and most U.S.-based branches and agencies of foreign banking institutions.
The annual lecture series, sponsored by the School of Management, brings the accounting, business and campus communities together to contemplate topics of business ethics and corporate social responsibility. Briloff is Presidential Professor Emeritus of Accounting and Ethics at Binghamton University, and has been long recognized as an ethical voice in the accounting profession. He was awarded the University Medal earlier in 2012. He is also professor emeritus of accounting at Baruch College, City University of New York.
In his remarks to a crowd of more than 400 – which included students, faculty and alumni – Lawsky said criminal prosecutions have been extremely difficult in cases of financial malfeasance because defendants need to be found guilty beyond a reasonable doubt. Even so, he believes prosecutors, overall, have not tried hard enough to pursue convictions.
“The firms themselves are enormous, diffuse and incredibly complicated,” he says. “Assigning blame to individuals is exceedingly hard when talking about complex firms. [Sadly], we’re unlikely to see many criminal prosecutions coming out of the recent financial crisis.”
Lawsky believes the approach to achieving a more ethical business environment should be forward-looking and that regulators can play a prominent role in closing the accountability gap.
“When you right the wrongs of the past in a way that deters future bad conduct, you create a system that leads to improvement,” Lawsky says. “We need to actually hold individuals to account and we need to expose in a detailed and significant way what the bad conduct was.”
Donald Nieman, provost and executive vice president for academic affairs, says the Briloff Lecture is a rich intellectual event that epitomizes the values of a premier public university.
“For Professor Briloff, the bottom line is as much about ethics and transparency as it is about profit,” Nieman says. “This lecture is special because it focuses on his passion and touches on issues that are at the heart of the free enterprise system. No system can operate effectively without trust.”
The namesake of the lecture series echoed Nieman’s comments while commending Lawsky for his work on behalf of the state’s citizens.
“[What he does] is meant to insure the blessings of liberty to ourselves and prosperity,” Briloff says.
Upinder Dhillon, dean and Koffman Scholar, says a focus on accountability has become increasingly necessary in today’s business climate.
“We are continually reminded of the importance of this lecture as businesses continue to struggle with ethical failures,” he says.