Culture through the eyes of the Banking Royal Commission
Directors, take note!
The Hayne Royal Commission - Recommendation 5.6:
“All financial services entities should, as often as reasonably possible, take proper steps to:
assess the entity’s culture and its governance;
identify any problems with that culture and governance;
deal with those problems; and
determine whether the changes it has made have been effective.”
Directors have a responsibility to care about the culture of the companies they steward
Hayne points out that directors have a responsibility for culture. A director’s duty “demands consideration of more than the financial returns that will be available to shareholders in any particular period”. He goes on to state that the long-term financial advantage of a corporation is likely to include “the interests of shareholders, customers, employees and all associated with any corporation”.
This brings to mind a conversation I had last year with someone from an organisation representing company directors where I asked if they’d like us to deliver a talk about culture. I was informed that “culture is not one of a director’s responsibilities – It’s an operational matter”.
Well, I think the Royal Commission is telling us that directors should very much care about culture.
Watch our in-depth training video: The Culture Effect - Why you need to establish a purpose-driven culture before even worrying about systems and strategy.