The Final Report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry outlined the need for change in the finance sector. It is widely accepted that poor culture is a key contributor to major behavioral and governance failings, which harm consumers, investors and markets.
The momentum for change is strong and represents an opportunity for businesses, boards and governments to rebuild trust with Australians. We must adopt long-term, sustainable practices, underpinned by responsible management of assets. Good culture is at the heart of the
change we need to see.
Corporate culture can be described as the shared values and norms that shape the behaviours and mindsets of a company’s staff. That said, it is a broad and qualitative concept which raises many questions. One thing is certain, culture can drive or discourage misconduct.
Our members consider that long-term, sustainable investment is underpinned by sound management of environmental, social and governance (ESG) risks and opportunities. They recognise that good culture is not supplementary to effective management, but integral to it. They understand the link between corporate culture and organisational diversity.
In particular, gender diversity can assist in developing corporate culture, with diverse directors more likely to identify a broader set of risks and opportunities, and a diverse board demonstrating the company’s commitment to diversity and inclusion more broadly.
This policy outlines proposals to improve corporate culture, which we will advocate for on behalf of our members and investors.