I begin with remuneration. As I said in the Interim Report, ‘the conduct identified and criticised in [that] report was driven by the pursuit of profit – the entity’s revenue and profit, and the individual actor’s profit’.[1]
Of the topics dealt with in this chapter – culture, governance and remuneration – remuneration is the most concrete. It is also the topic that received the most immediate attention in the wake of the GFC. It is, therefore, a convenient place to begin an account of local and international efforts to improve governance, culture and remuneration practices since the GFC.
I start by providing an outline of those efforts. They form an important part of the backdrop for my recommendations in relation to remuneration practices. I will then consider some of the failings that have been identified in relation to the remuneration practices of financial services entities, and the ways in which those failings can be addressed.
[1] FSRC, Interim Report, vol 1, 302.