The Royal Commission and the Culture Crisis. Is it all too hard?

Why aren’t companies rushing to measure and proactively manage culture? 

Sean Bowman, Bob Barbour & Joel Bendall

Every now and then there are watershed economic or corporate events that have a seismic impact, and cause everyone to stop and ask the question…

…how did that happen?

Usually this is because either a lot of people lost a lot of money and/or because there were standards of behaviour that fell way below community expectations. Think GFC for example. 

Or more recently in Australia, the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry(the “Banking Royal Commission” or “RC”).

What happened in the Australian Banking Royal Commission?

The Banking Royal Commission was a broad inquiry into Australia’s Banking & Financial sector. To many it acted as an insight into corporate and executive behaviour generally. 

The real stories that emerged during the hearings were pretty atrocious.

“Customers” were billed for services they had not received, regulators were misled, people were sold products they didn’t need, some farmers lost everything they owned, and infamously dead customers continued to be billed. 

There were many other stories equally as disturbing, and throughout all of this executives received big bonuses as reward for such practices.

In total there were 76 recommendations stemming from the Banking Royal Commission, these findings included that at least 2 Australian financial institutions face criminal charges, while 19 companies will be referred for further investigation. 

Large corporate fines are likely, along with the possible imprisonment of executives. 

This is on top of customer remediation costs that could cost well over $2B as well a massive impact on the combined market capitalisation of these companies in the range of tens of billions of dollars. 

Almost every Australian has felt the impact, at the very least through a decline in the value of their superannuation. 

And this is just one industry sector. 

Is the same or similar corporate malfeasance happening elsewhere, or was Banking and Financial Services merely a special case? What if there was a Royal Commission into other sectors?