In the wake of several scandals involving the financial industry, outgoing ASIC Chairman Greg Medcraft says he started the conversation on culture and conduct about three to four years ago.
“I think that’s one of the things I can probably take credit for starting—it’s all come home to roost, hasn’t it?” he says.
“I really think the need for change in corporate culture is starting to sink into the board and executive level, but there is still plenty of work to do.
“That understanding needs to flow through all levels of the organisation and it needs to prompt deeper reflection on the best ways to create a consumer-focused culture.
“Organisations need to be genuine in putting the needs of the customer first and actions speak louder than words. Organisations that talk the talk but fail to walk the walk will see the impact on their bottom line.”
Medcraft, who will in Perth for the CCI Lighthouse Leadership series on August 31, says corporations need to consider the “front page” test and what it means to end up on the front page of major newspapers because of a scandal.
“More and more you have to think of the social licence thing. A very senior judge said to me recently, ‘it’s not just on the front page, but what would your wife say, or your family say, or what would I as a high court judge say?’
“You have to think on many levels, ‘how would this look?’
“That to me is an easy rule of thumb and I think sometimes managers and directors and even the people on the front line tend to forget that. These days the world has changed. Everyone has access to mobile, video networks, that’s the new world. It’s changed for good.
“You get badly treated at a front counter, well guess what? They can complain to potentially millions of people, that’s the new world. Not just millions of people in Australia, but millions of people around the world.”
Medcraft says it’s not impossible for large corporations to have good cultures.
“Some people say for big corporations it’s impossible, but no, that’s ridiculous,” he says.
“Making sure you put customers at the centre of your business, and ensure you maintain a strong brand and reputation can help lead to long-term sustainable shareholder value.”
Medcraft, who has been ASIC chairman since 2011 and ends his tenure in November, says coming from backgrounds in banking and with a keen interest in politics—he had short stints as mayor of both Box Hill in Melbourne’s east and Woollahra in Sydney’s east—he knew how regulators operated which gave him an advantage.
“I'm not afraid to say how I saw it and to call people out on their behaviour. I saw a lot of things early on that I thought could be improved about how we did things at ASIC, including how we interacted with industry,” he says.
“One thing I'm proud of is opening up avenues for us to hear first-hand from industry what they are seeing and experiencing; for instance, through our external advisory panel and our director advisory panel, as well as the Innovation Hub and commission meetings with boards, executive teams and chairs of risk and audit committees.”
►Don’t miss the opportunity to hear from Greg Medcraft at CCI’s next Lighthouse Leadership series – book your tickets here.