Governance, culture and ethics have never been more relevant across Australian business. We have seen a growing lack of trust in institutions, in traditional structures and even in some cases in people’s success. Noting that the full title of the Hayne royal commission featured the word ‘misconduct’, ethical business practices and corporate governance really do matter for today’s boards and management teams. These expectations mean that governance, risk and compliance efforts need to move beyond the traditional ‘tick the box’ approach
Governance Institute’s Ethics Index (third edition), which was issued in 2018 confirms these headlines. The overall Ethics Index dropped slightly in 2018, likely due to the decrease seen for the banking, finance and insurance sector, which perhaps unsurprisingly, was reported as the lowest scoring industry group.
The Australian Financial Complaints Authority (AFCA) chair, David Locke, recently went on record stating that ‘the Hayne royal commission exposed a spectrum of behaviour that ranged from the unlawful to the lawful but unfair and unethical — it’s about… cutting corners, and it’s about there being no consequences for regulatory failure’. He backed this up with the statistic that AFCA were on track to receive 80,000 complaints in its first year of operation.