Investment banks – and the financial services industry at large – continue to bear the reputational scares of some high-profile ethical scandals. In spite of numerous efforts for avoiding ethical risk, emotional contagion, a key factor of ethical risk remains largely overlooked. Hence, it is critical to address the question of how emotional contagion arises and how it can be detected.
Following a number of high-profile ethical scandals in investment banks, the call for changing corporate culture is increasingly gaining traction. However, beyond the fact that cultural change programmes often fail to deliver upon their expected outcomes, such programmes may not be required – or should, at least, be revisited – in order to tackle emotional contagion – the often-overlooked key factor of ethical risk. This should hardly come as a surprise considering that at the end of the day, “you bring your emotions to work. They drive behaviour and other feelings. Think of people as emotion conductors”.1
Emotional contagion is a three-step process through which an individual’s emotions transfer to another individual within a group. During the first stage, non-conscious mimicry occurs, whereby individuals subtly copy one another’s non-verbal cues. During the second stage, a feedback process occurs, whereby individuals translate non-verbal cues into an emotion. During the third stage, a full contagion process occurs, whereby the emotions and behaviours of individuals within a group become synchronised. Two factors are likely to influence this three-step process of emotional contagion, namely, the valence (positive or negative) of the emotion and the arousal level wherein the emotion is expressed.
About the Author
Dr. Alexandria Dobra-Kiel is Assistant Manager in Deloitte focussing on corporate strategy and behavioural analytics and a Guest Lecturer at Warwick Business School. She obtained her PhD from the University of Warwick and her MPhil from the University of Cambridge. Prior to Deloitte, Alexandra worked as a Senior Associate at Duff & Phelps, as an Analyst at Accenture and as a Seconded Analyst at the Accenture Institute for High Performance. She is invited speaker at leading business schools and firms and the recipient of a number of prestigious international honours and awards including Academy of Management, Falling Walls and the Swiss National Science Foundation.
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