Corporate culture inconsistent with actual behaviour
Financial services firms are still lagging in correcting their corporate culture with a clash between public statements of accountability and the internal actions of staff and executives.
Furthermore firms are still considering not whether an ethical dilemma is right or wrong but whether they can get away with not dealing with it appropriately, according to the Australian Prudential Regulatory Authority chair Wayne Byres.
Speaking at the Symposium on Asian Banking and Finance in Singapore on Friday, Byres said there was still room for serious improvement in the areas of governance, culture and remuneration.
He stated that while culture was a 'nebulous concept' APRA regularly saw groups failing to ask whether behaviour was right and "instead, the question has often been 'can I get away with this?'".
"More ominously, in some cases it appears no question was asked because the attitude was 'if you ain't cheating, you ain't trying'. For an industry that is ultimately founded on trust, something serious is amiss, and strong and ethical leadership within financial firms is needed to set this right."
Byres criticised the financial incentives given to some individuals in financial services and said these were a truer indication of what an organisation truly values and were often at odds with wider statements released by the organisations which employ the individuals.
"It is clear that, in many cases, aspirational statements of organisational culture have been no match for the personal incentives that are created for individuals," Byres said.
"Much of the post-crisis reform agenda has been aimed at getting the organisational interests of financial firms more aligned with those of the wider community. Getting personal incentives correspondingly aligned with organisational interests needs to be seen as equally important."
Recommended for you
Single adviser-led firms continue to expand their footprint in the Australian advice ecosystem, Adviser Ratings research shows, as market conditions prove favourable for boutique practices.
With HNW investors representing the largest market for alternative assets, Praemium and CoreData research underscores why this presents a compelling opportunity for advisers.
Having completed the successful integration of Diverger, Count has upgraded its forecast for expected synergy benefits achieved by the acquisition by a third.
Australia’s largest licensee has seen the biggest number of adviser losses over the past week, while the expected wave of new entrants has boosted overall adviser numbers.
