In a recent report for the Centre for Climate Engagement, Tina Mavraki, a Strategic Advisor to the group, explores how cultural failures spread throughout an organization and ultimately lead to poor financial performance.
"Many banks that are lurching from crisis to crisis realise that corporate culture has something to do with it," she explains. “However, they can't seem to get the conversation past the early stage of corporate values. They also tend to get lost in symptoms which make them no better off in their daily practices.”
The report underscores the urgency of addressing cultural issues, as banks are running out of time to rectify longstanding problems. "Market practitioners tend to refer to culture-related skills as 'soft skills,'" Mavraki writes. “However, it is these exact people and 'corporate glueing' skills that make banks perform the way they do. Culture needs new language and a complete reframing that serves a meaningful business-oriented purpose. It needs as much relevance and specificity as it needs operationalisation, consequence and financial measurement.”
These factors not only impact financial performance, but also banks' ability to meet their climate and sustainability goals, Mavraki argues. "Climate change is only adding fuel to these trends and leadership mindsets have to take this into account within their strategic thinking," she writes. "If these trends get out of hand, central banks will neither have the macroeconomic tools or the state balance sheets available to manage political unrest and the destabilisation of the financial system."
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