The Royal Commission into Misconduct in the Financial Services Sector in Australia has highlighted and indeed helped drive the need for cultural change in the financial sector. This short discussion identifies just five impediments to deep cultural change in the industry.
The five impediments identified are not intended to be comprehensive , however they do serve to illustrate some of the challenges. What can be done from a culture change perspective will also be specific to organisations and can be the topic of another discussion. Before launching into the five impediments let’s set the scene.
Corporate Culture: Culture is often defined as ‘The way we do things around here!” That’s true enough and the universal nature of the statement suggests that just about anything you do can influence culture one way or another. That has been foundational to nearly all my professional work. And the financial institutions will be doing a lot following the Royal Commission.
Expect Textbook Corporate Responses: Much of the response will be good corporate stuff: action plans based around the Royal Commission findings; public relations releases; interviews with a polite, conscientious, empathic CEOs (or the next best person); divesting now unwanted businesses; reviewing remuneration strategies; fixing IT problems; changing a few executives; learning to live with a more active regulator with some new rules; Board members bein more vigilant; winding back the aggressiveness of the sales culture (at least for a while); convincing the public that the banks and others are not really the bad guys, etcetera. The largely ‘virtue signaling’ corporate programs of social responsibility, sustainability, leadership and core values will probably be ramped up and just maybe taken more seriously. Some of what will happen will be uncomfortable, regardless it is all pretty well understood and a variation of what the organisations do now – it will all be implemented within the same corporatist paradigm. In the public arena, some executives being charged with criminal offences will mostly be new (if it happens), and the bank boards will themselves face a decision regarding how much support (direct or indirect) they (shareholders and investors) will fund for these executives.Continue reading