In Australia the public hearings at the Royal Commission into misconduct in the financial services industry came to an end last week. Over the past year there have been 68 hearing days and 138 witnesses called to give evidence to the inquiry. And despite publishing a comprehensive interim report in September that forensically reviewed the […]
By Dennis Gentilin, founding director of Human Systems Advisory and an adjunct fellow at Macquarie University. He was employed at the National Australia Bank for 16 years.
As readers of this blog may know, there is currently an inquiry into the banking and finance industry in Australia. Prime Minister Malcolm Turnbull announced The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry in November 2017. Former High Court Judge Kenneth Hayne AC was appointed as the commissioner shortly after the announcement and public hearings commenced earlier this year.
Dennis Gentilin is the author of “The Origins of Ethical Failures” (Routledge, 2016) and the Founding Director of Human Systems Advisory.
Last week, Mr Stephen Sedgwick AO released the findings from his review into remuneration arrangements for retail banking staff in Australia (the final report can be downloaded here). The review is part of a broader program of work being undertaken by the Australian Bankers Association that is aiming to address the culture and conduct issues within the banking sector.
With this objective in mind, the review represents a significant (albeit small) step in the right direction. Although some may question whether Mr Sedgwick went far enough, he has squarely placed the ball in the banks’ court and left them under no illusions that change is needed.
What are your main areas of research/work?
Let me begin by stating that I don’t see myself as a scholar (at least not formally). However I do see enormous value in using the findings and tools from the social and behavioral sciences to help address the ethical challenges facing the business world. This is one of the many reasons I am a big advocate of Ethical Systems.
As one would expect given my experience and background (outlined below), my primary area of interest is employee voice and speak up cultures. What my experience showed me is that even the best “formal systems” (rules, regulations, compliance and other such artifacts) have shortcomings. The best (and arguably the only) way to overcome these is to nurture the “human systems” within organizations. A speak up culture is a core component of this latter system.
The increased exposure recently provided to the actions of whistleblowers at organisations like CommInsure, Theiss and 7-Eleven is, in a perverse way, a very positive development. Obviously we feel for those who under extremely difficult circumstances have taken considerable personal risk to expose wrongdoing, especially if their selfless actions have come at a cost. This latter outcome can never be excused. However, the increased publicity is proving to be a catalyst for change.
And there is no question that change is needed. At the organisational level companies must begin to recognise that there are enormous benefits associated with giving employees voice. Even the best laid compliance framework has limitations, and the most effective way to overcome these is to promote and embrace a speak up culture – employees shining a torch on poor conduct should be cherished not chastised.
Guest post from Dennis Gentilin of the National Australia Bank and author of the forthcoming book, “The Origins of Ethical Failures”
As we all know, last week the car manufacturer Volkswagen admitted to installing software in over 11 million of their diesel engine cars that was designed to cheat emission tests. At worst, some commentators have suggested that Volkswagen are responsible for the premature death of people with respiratory conditions. At best, it is extraordinarily deceitful and unethical conduct.
It is highly unlikely that a scandal of this magnitude is the work of a handful of rogues. Rather it points to a systemic disrespect for principled conduct at numerous levels of the organization. No doubt the pending investigation will uncover failures in governance and compliance. However, as with all corporate scandals of this nature, my hypothesis is that at least one (or some) of the following five factors would have been at play: