Failings of organisational culture, governance arrangements and remuneration systems lie at the heart of much of the misconduct examined in this Commission. Improvements in the culture of financial services entities, their governance arrangements and their remuneration systems should reduce the Read More …
Category: Culture, Governance and Remuneration
3.3 Accountability
Accountability is centrally important to any consideration of culture, governance and remuneration. Clear accountability is vital to effective governance. It ensures that issues are resolved, and resolved effectively. It fosters a culture where risks are managed soundly. It lies at Read More …
3.2 Priorities
Proper governance requires setting priorities. Setting priorities requires choices. Sometimes the choice is between conflicting goals or conflicting courses of action; often the choice is about application of resources, timing or relative importance. In the present context, two different, but Read More …
3.1 The role of the board
Boards cannot operate properly without having the right information. And boards do not operate effectively if they do not challenge management. Two instances examined in evidence can be used to explain and justify those propositions. Both show the importance of Read More …
3 Governance
Coming now to the third of the principal themes of this chapter, as I said earlier, governance refers to all of the structures and processes by which an entity is run. It embraces not only by whom, and how, decisions Read More …
2.2 Changing culture
As I have said, each financial services entity is responsible for its own culture. Each must form a view of its culture, identify problems, develop and implement a plan to deal with them, and then determine whether the changes it Read More …
2.1 Supervising culture
2.1.1Responses to the GFC While prudential supervisors have no doubt formed views about the culture of financial institutions for many years, the idea that the culture of financial institutions was directly linked to financial soundness and stability only appears to Read More …
2 Culture
I have said more than once in this chapter that an entity’s remuneration and incentive arrangements show what the entity values. Hence, consideration of those arrangements may provide a useful starting point for an examination of the entity’s culture. But Read More …
1.3 Front line remuneration
Much of the evidence the Commission obtained about remuneration of front line staff related to the front line or ‘customer‑facing’ staff in banks. Much of the discussion below is framed with that context in mind. But what is said applies Read More …
1.2 Executive remuneration
Regulatory and other bodies considering the links between remuneration practices and misconduct have given particular attention to the remuneration of executives because it is the board and senior management of financial services entities who are responsible for, and have the Read More …