In a recent speech, Kenneth Hayne — a former Justice of the High Court of Australia who led the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry — criticized what he sees as ongoing conflicts of interest and a lack of ethical culture in corporate Australia and the country's financial sector. He warned that boards and executives have more to learn from the key findings of his Commission.
Recent scandals in several industries have sparked concerns about conflicts of interest and professional misconduct similar to those uncovered in the financial services sector during the Commission. "If there are persistent ways where breaches of the law are identified, it can say a lot about leadership, culture and governance within the relevant entities," he said.
In order to reduce instances of misconduct, Hayne called for simpler standards that prioritize obeying the law, fairness, and acting in customers' best interests. By focusing on these fundamental principles, companies can align their conduct with societal expectations and build consumer trust, he argues. And when firms violate these standards, regulators need to go further in punishing breaches of corporate law, and a failure to do so quickly or strongly means that "so-called bad apples will multiply."
In our 2023 Compendium, we discuss how culture and conduct concerns have evolved in Australia, and how regulators are responding. [Read More]
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