Boards are rightly concerned about the issues relating to the causes of misconduct identified by the Financial Services Royal Commission. Culture, governance and remuneration have driven behaviours that fall well short of community standards. These are concerning be to non-executive directors (NEDs) of financial services organisations in particular and NEDs more broadly.
It can be challenging for NEDs to identify a potential breach of culture because their touch points with the organisation tend to be structured and contained to their colleagues on the board, the CEO and the executive team. However, NEDs share responsibility and accountability for their organisation’s culture and therefore, must be in tune to potential breaches for by the time the ‘smoke comes under the door’ the damage has been done. For NEDs sitting on boards in the financial services sector, the work of repairing culture and reputations has begun.
Korn Ferry suggests these 10 areas as a framework for NEDs to identify culture risk in the organisations they serve.
CULTURE RISK FRAMEWORK– HOW NEDS CAN IDENTIFY CULTURE DERAILERS