About compliance and governance: Thoughts arising from banking royal commission

  • Every organisation is faced with conduct risk.
  • How can an organisation ensure that its people are willing and enabled to consistently make good decisions?
  • The organisation needs to be clear about what it wants to achieve and needs to achieve and to put in place systems that align with those objectives.

White figures holding hands next to blue question mark

The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry has exposed remarkable failures in risk management, compliance and culture that have claimed the careers of a number of senior managers and directors and seen the threat of litigation.

The underlying issues are not unique to the world of finance. Every organisation is faced with conduct risk.

Management and governance systems, are multifaceted systems in which people operate. One weakness may undermine the effectiveness of the whole system. For organisations struggling with repeated incidents and near misses arising from the conduct of their personnel, it is tempting to think that there needs to be a focus on one thing. Often that one thing is the rhetoric of ‘zero tolerance’ compliance. Often it is training. Sometimes it is culture. At the time of writing the newspapers have carried articles focusing on training, coaching, culture, embedding compliance officers, compliance software, remuneration systems and other ‘silver bullets’.

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