Not all challenges in the financial sector have been the result of poor culture, but sometimes the result of unwieldy infrastructure.
These are the words of the Australian Prudential Regulation Authority (APRA) chairman Wayne Byres at the recent RMA Conference.
For those failings that have been cultural, Byres suggested that the this might be the ‘too narrow’ focus on the financial bottom line and not enough focus on that question of reputation risk.
He stressed that it is not the regulator's job to rebuild trust for the financial sector.
In addition to discussing the role of the Banking Executive Accountability Regime (BEAR), Byres raised the question of being able to quantify the risk management profession when it comes to behaviour and reputation.
Can culture and infrastructure be separated?
The GRC Professional reached out to Elizabeth Sheedy, financial risk expert at the Macquarie Applied Finance Centre, who has been doing research risk culture.
Sheedy said that both good infrastructure and good culture are needed for an organisation to have good outcomes. They cannot be separated.
“By structures I mean governance, policies, systems, remuneration, training, resources etc. Neither structures or culture is sufficient on its own,” she said.
Bob Murray from Fortinberry Murray, who specialises in human behaviour and decision making in the corporate environment, also said that the two were inextricably linked.
“Infrastructure influences culture and in turn is influenced by it. A culture allows people to collaborate effectively, that's its purpose.” Murray said. “A good infrastructure, is one that's aligned to the culture to better facilitate collaboration. You can't change one without changing the other.”