Much has been written about the disruptive changes that are continually assailing organisations and markets. Organisations that have been unable to adapt appropriately are being severely affected, including their failure to meet community expectations.
Many failures have been highlighted in findings emerging from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry ('The Royal Commission'), and from the APRA prudential review into CBA ('the APRA report'). The failings essentially fall into two categories:
- Putting self-interest and shareholder interest ahead of customer interests, and
- Despite long term efforts to regulate and enforce appropriate conduct, issues continue.
Two key questions that arise are:
- What are the limitations in our current thinking and ways of working that mean organisations have been ineffective in enforcing reasonable behaviour? What needs to be different to overcome these limitations?
- What needs to happen, individually and across society, to develop a much deeper awareness of our impact on others and take much greater responsibility to "do the right thing", even when no one is watching?
The APRA report explored organisational failings in addressing conduct issues. While the themes apply to one financial services organisation, they are relevant across industry (and to many organisations in other industries). Key themes included:
- People saw themselves as responsible to a process rather than responsible to an outcome.
- While organisational values were broadly promoted, there was insufficient focus on embedding these in day-to-day behaviours and actions.
- There were 'overly complex and bureaucratic decision-making processes that favoured collaboration over timely and effective outcomes' - (p3).
- Excessive reliance was placed on 'high IQ' over deeper analysis and questioning. This was exemplified by 'inadequate oversight and challenge by the Board' - (p96).