People Risk (i.e. the uncertainty and potential for loss or failure caused by human behaviour or the decisions of employees) has been played out ad nauseam at the Banking Royal Commission. Overwhelmingly, the highlighted behaviour has been organisational culture allowing, in some cases encouraging, the pursuit of greed disguised as profit. Although it is acknowledged the regulators, ASIC and APRA, have not always sought to prosecute or seek remedial action consistent with general community expectations, neglect by boards with strict accountability for governing in the best interests of the organisation has not provided corporate Australia with a level of assurance that all boards are in control and protecting the interests of their shareholders and other key stakeholders.
Without question we are seeing a fundamental disregard for the rule of law in some areas of corporate Australia. The time has come for the directors and boards who are accountable for ensuring the proper and ethical function of our corporations to take back control. The time has come for those directors and boards to enforce ethical behaviour and reignite robust customer service cultures.
We at Effective Governance, the pre-eminent governance and corporate culture advisors in Australia, have the expertise and demonstrated achievements across the financial services professions to provide the solutions for boards to excel. In fact, we have developed Australia’s first Corporate Culture and People Risk diagnostic specifically designed to assist boards to review culture and the underlying risks inherent in human behaviour when operating outside of desired cultural norms. The diagnostic allows boards to implement a more robust governance framework that not only provides oversight for financial, regulatory and strategic risks, but also monitors the sometimes (when we are not looking) less visible risks within people and social systems.
Effective Governance sees its role as providing advice and support to boards in order to develop a robust governance framework based on an agreed culture of compliance with the law and alignment with values.