Recommendation 5.6 – Changing culture and governance
All financial services entities should, as often as reasonably possible, take proper steps to:
- assess the entity’s culture and its governance;
- identify any problems with that culture and governance;
- deal with those problems; and
- determine whether the changes it has made have been effective.
Recommendation 5.7 – Supervision of culture and governance
In conducting its prudential supervision of APRA‑regulated institutions and in revising its prudential standards and guidance, APRA should:
- build a supervisory program focused on building culture that will mitigate the risk of misconduct;
- use a risk‑based approach to its reviews;
- assess the cultural drivers of misconduct in entities; and
- encourage entities to give proper attention to sound management of conduct risk and improving entity governance.