The Australian Royal Commission into Misconduct in Banking, Superannuation, and Financial Services publicly released their Final Report earlier this week. Today, the Governance Institute of Australia (“GIA”) weighed in with their perspective on how the industry must respond to the report which caps a traumatic year of testimony and public scrutiny into the culture and practices of its members.

Recognizing the fundamental impact the industry has on the economy as a whole, the GIA notes that “How these institutions respond to Hayne’s report will be vital, because building long term stability and performance of the sector will determine the health of the Australian economy as a whole.”

At the root of the scandals and misconduct revealed by The Royal Commission is a common culture which treated compliance as a purely mechanistic exercise while failing to as the fundamental question which is “Should We?”. Instead, management teams across the industry chose to ignore clear warning signs because their activity was technically ‘compliant’. In the GIA’s words, “[Reform] cannot be based around an attitude of it being a ‘box-ticking’ exercise for compliance purposes.”

What is needed is a wholesale rethink of governance and the tools that executives use to measure and manage their cultures for accountability and to rebuild trust with the public.

Read the article: Royal Commission: Governance Culture of ‘Box-ticking’ is Over

Read the Royal Commission final report: Final Report – Australian Royal Commission into Misconduct in Financial Services