Banking on good governance
The ongoing Royal Commission into the nation’s financial services industry has opened a veritable can of worms.
We’re just a short time in and already we have heard a litany of appallingly unethical – if not illegal – behaviour that touches on everything from allegations of bribery and forged documents to lying to the regulators, selling policies to those who can’t afford them and even charging fees to dead clients.
The culture in some of these companies has been so shockingly toxic that not only have CEO and chair heads rolled but the Treasurer warned that wrongdoers could face gaol.
"The culture in some of these companies has been so shockingly toxic that not only have CEO and chair heads rolled but the Treasurer warned that wrongdoers could face gaol."https://t.co/Pl1ob8vIcc #corpgov #royalcommission
— Governance Matters (@GovernanceMatt) May 16, 2018
Banking on transparent relationships
One of the more startling revelations to come out of the Royal Commission into misconduct in the Banking, Superannuation and Financial Services Industry emerged in mid-March when the management of the Commonwealth Bank of Australia (CBA) was accused of having told its board one thing and the Australian Securities & Investments Commission (ASIC) something radically different.
— Governance Matters (@GovernanceMatt) April 16, 2018
It all had to do with CBA’s add-on insurance product that, under the Credit Card Plus banner, was sold to some customers who, because they were unemployed at the time of purchase, could never make a claim.
The bank executives knew there were some 64,000 affected customers – a figure that would rise to 100,000 following further investigation – but chose to greatly dilute the magnitude by advising ASIC that there were 27,800 cases. Continue reading
Trust is increasingly a must
There’s an advert doing the rounds that has a ‘trust is a must’ payoff line and while I seem to recall that it’s for a homebuilding company, it would make a perfect slogan for a campaign on the key institutions of Australian society.
"Trust is increasingly a must". Read our latest blog article here: https://t.co/RYHaFoFGdt
— Governance Matters (@GovernanceMatt) April 2, 2018
I was left with this prevailing thought after reading the somewhat alarming findings of a number of recent respected pieces of research, one the Edelman Trust Barometer and the other Roy Morgan Research. Both highlight that trust is a top priority and, in the case of the 2018 Edelman Trust Barometer – a global survey across 28 countries – it shows that each of Australia’s four key institutions of government, business, NGOs and media are among the least-trusted in the world. Continue reading
The shifting sands of auditing should send signal to boards
— Governance Matters (@GovernanceMatt) April 4, 2016
You might recall back in mid-2015 we chatted about the Australian Securities and Investments Commission – or ASIC – and its push to make it easier to prosecute company executives and directors for overseeing poor business culture that leads to very poor business performance.
We spoke then of it representing a seismic shift on the governance landscape and it’s good to learn that the rumblings continue, this time in the corridors of some of the world’s most prestigious accounting firms.
Just recently, KPMG announced that it has broken with a century-long tradition of hiring only accounting and economics graduates for its auditing section by taking on 42 graduates in this area who boast none of these qualifications. Rather, they come with what are termed “soft skills” – in areas such as mathematics, IT, social science…and even counter terrorism.
What’s more, KPMG anticipates that one-third of its almost 400 audit graduate intake this year will have no accounting background.
ASIC looks to get tough on corporate culture misfits
When companies collapse and the extensive forensic investigations have been completed, there’s usually a common element lurking in all corporate collapses, in all countries, all over the world.
A toxic corporate culture that has been allowed to fester.
All of which makes the recent news out of Canberra that the corporate watchdog, the Australian Securities and Investments Commission – or ASIC – is pushing to make it easier to prosecute company executives and directors for overseeing poor corporate cultures that lead to poor outcomes for consumers.
Culture’s at core of best practice risk management
As every organisation knows, when you move in a strategic direction, your travelling companion is invariably risk.
That’s the irrefutable ying and yang of the strategy process.
But what the really successful organisations also know is that planning is but one of the elements required to effectively manage risk. They know only too well – and subscribe to – the truism that even the best laid plans of mice and men can, and often do, go awry.
And they appreciate that the key piece in any organisation’s risk management puzzle is its culture. Get that right and you’re well on your way.