The Real Cost of the Banking Royal Commission… Trust
11 Feb 2019
How on earth did they get away with it?
Why did it take so long to expose such a parallel universe of at worst corruption – and at best incompetence - and what does it all mean now for businesses and individuals across Australia?
They are the questions that have Australians shaking their heads as they ponder the increasing fall-out from the banking Royal Commission.
While there will be plenty of political scoring to be had, in the real world, the impacts of the staggering revelations about the black heart of the banking and finance sector and the question of what happens next, will be felt far and wide including in businesses such as ours, a not-for-profit (NFP) organisation.
Ironically, more of those responsible will no doubt exit as have now the Chairman and CEO of the NAB who could reportedly be entitled to a termination payout of more than $1 million.
While they may have fallen on their swords, they leave behind the rest of the battered sector who will now have to deal with the wrath of regulators under pressure to prove how sharp their teeth can be.
But the fallout goes much further than just banking and finance. In our world as an NFP organisation – perhaps more than others – ‘trust’ is a key platform of how people see us and how they expect us to behave.
While in reality, as the CEO of a significant independent not-for-profit (NFP) organisation, I have exactly the same responsibilities and accountabilities as any CEO of a ‘for’ profit organisation, the public, our partners and stakeholders somehow see us differently.
One of the biggest concerns for me in the wash-up of the Hayne Royal Commission is the impact it will have on the Australian community’s ability to trust.
And, not just because of the failures by bank executives but because the public suspects there will be little, if any real consequences for anyone involved.
Who can the public now rely upon to trust when the guardians of some of their biggest assets – the banks and financial services that many have trusted implicitly for years – have now been shown so irrefutably to be liars, cheats and only driven by the prospect of bonuses tied solely to profits?
All too often during the Royal Commission hearings, it became blindingly and embarrassingly obvious that some of the biggest players in the banking and finance industry had at best, scant regard for the best interests of their clients and customers.
In the light of those revelations, why would you trust them?
And I believe, this justifiable lack of trust could impact right across the business sector including, unfortunately, the NFP sector, where we often rely significantly on public donations and tax payer support to enable us to do our work.
While the banking and finance chiefs clearly have a mountainous task in front of them to try to restore some semblance of their reputations, I think now is a particularly relevant time for all business leaders to reflect on their leadership and the integrity of their behaviour.
When did the key decision and policy makers of these banking and financial organisations lose so much sight of how they should have been behaving? Clearly there is no crime in making a profit in business, obviously it’s a business imperative … but at what cost?
Organisations are made up of people and even good people make mistakes. We all understand that. Organisations, including ours, can also be subject to occasional incidents of criminal behaviour.
But what is significantly more important than the mistakes, acts of omission, or even criminal offences that can impact on a business is the way in which an organisation responds.
That response must be fair, fast and demonstrate genuine attrition with a clear commitment to making things right.
In our case, it wasn’t luck that saw us detect a significant theft by a senior staff member. We have robust processes in place that detected it, a whistle-blower policy that guided and gave another employee the confidence to report it, and a committed management policy that saw it quickly escalated, investigated and handed over to the authorities.
The fact that it happened was far from ideal, but I would hope our response has shown our team, our stakeholders and supporters that we are an authentic organisation that will not tolerate inappropriate behaviour.
I wonder if the banking and finance bosses can reflect on their past performances in the same way?
As the saying goes, ‘Trust is like an eraser; it gets smaller and smaller after every mistake…’. It seems to me the banking and finance industry haven’t left themselves with much to work with.