Culture and governance

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 APRAregulated 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 riskbased 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.