A ‘whatever it takes’ culture remains pervasive in some banking entities and flies beneath the radar of very senior executives, according to the Finance Sector Union (FSU).
The FSU has used its submission to the Senate Economics Legislation Committee review of the Government’s Bank Executive Accountability Regime (BEAR) to argue that it may take many years for poor culture to be removed from banking management.
“In many cases, individuals have risen through the ranks of an incentives based industry over a period of decades,” the FSU submission said. “A ‘whatever it takes’ culture remains pervasive in some entities, and flies beneath the radar of very senior executives.”
The FSU submission pointed to the number of initiatives put in place by the Federal Government to address issues in the banking industry but questioned whether they would all gel to produce an appropriate outcome.
“This rapid roll out of accountability systems is likely to lead to convoluted outcomes and is unlikely to lead to a situation of rebuilding the necessary trust across the industry,” it said.
“It is of significant concern to the FSU that by pursuing ad hoc reforms that are developed and implemented in isolation of each other, systems designed to ensure accountability and improved culture will do neither,” the submission said. “In fact, a disparate system with different regulatory oversight runs a risk of failing in the prime objective of BEAR and other accountability regimes.”
It said that of all the initiatives, only the BEAR provided for genuine transparency and administrative appeals processes.
“It is possible that by only providing an administrative appeals process to executives through BEAR, a cultural and accountability divide is created between executives and frontline workers, who do not have such an appeal process and are therefore potentially exposed as scapegoats for poor outcomes.”