The Australian Securities and Investments Commission (ASIC) believes that culture within financial services organisations is more likely to be influenced by middle-management than by chief executives.
ASIC chairman, Greg Medcraft, has told a Challenger Legal and Corporate Affairs team offsite that evidence showed that organisational culture existed primarily at the individual business unit level.
"We know that employees are more likely to be influenced by the conduct of their direct managers and/or the top performer in their unit than they are by the board and other senior leaders," he said.
Medcraft said it was therefore important that the middle and front line managers "model the firm's values".
"This is because new staff and junior staff members often interpret rules based on what they have learned as acceptable conduct from their managers and colleagues," he said.
"If new staff see that the top performers are successful despite, or even because of, poor conduct, then messages from the board about the importance of the firm's values and good conduct will not be effective in changing behaviour or aligning conduct with those values."