With the outcomes of the Banking Royal Commission being released via a report earlier this month, it is no surprise that cultural issues were found to be one of the major causes of the current state of affairs in our banking institutions.
I came across this article written by Girard Dorney (HRM Online) in my AHRI newsletter where the author has made a link to the possible effects on HR created by Kenneth Haynes final report.
Click here to read the article.
Girard states that since the global financial crisis there has been an agreement – that culture is important, and it affects every aspect of how business performs. What isn’t clear is understanding why and how – culture is still difficult to measure.
The report breaks down its section on culture into 3 parts:
- Remuneration – poorly designed remuneration arrangements can increase the risk of misconduct plus frontline staff must be remunerated on not only the ‘what’ but also the ‘how’ of the way they get the required results
- Culture – the need to assess and regulate culture to ensure the culture is not rewarding unethical behaviour (a fascinating recommendation)
- Governance – ensuring that the Board makes culture a priority
In a nutshell, the report is recommending that we find a way to regulate cultures – starting to measure a business’ culture – the behaviours that are being driven/encouraged to create success/profit, and determining if these behaviours are ethical/right. Then having a process to address these behaviours if they are found to be unethical.
So, take a few moments to read the report and ponder the opportunities that these types of recommendations could create to improve yours and all business’ culture to reduce the risk.