This article was originally published in the Conference Edition of the GRC Professional Magazine.
If the Royal Commission into misconduct in the Banking, Superannuation and the Financial Services Industry has done anything well, it has ramped up the discourse on what constitutes appropriate conduct and trust.
But how can GRC professionals implement internal processes that will lead to the best outcomes for consumers, employees, and other stakeholders?
Tony Beaven, Head of Elders Financial Planning, told the GRC Professional in a recent interview that he has given much thought to this question.
He is experienced in creating and implementing such governance, risk and compliance programs from scratch.
Beaven’s approach has earned the trust of his employees wherever he has worked with what he refers to as ‘servant leadership’— making himself open and available to his team.
Starting out in the UK, Beaven was a skilled engineer by trade. The financial sector was his passion, however, so when the time came, he made the move to begin his career in the industry.
“Gradually, I worked my way through the industry as a Financial Adviser, from retail to corporate banking, and on into business management,” he said.
Eventually, Beaven found himself in charge of a number of corporate and business financial planning divisions with Lloyds Bank, responsible for governance, risk and compliance.
At the time, the UK was experiencing major legislative, education and regulatory changes—much of which soon flowed over to Australia (with more still to come, once the recommendations from the Royal Commission and the final mapping process of FASEA are published!).
In 2007, he migrated to the land down under and found himself working at Suncorp, where he took over a wealth management channel there and eventually wound up running and turning around most of Suncorp’s Eastern Seaboard business.
Again, his responsibilities included managing the GRC framework in financial planning, as well as revenue.
With his skills becoming widely recognised, Beaven was headhunted by AMP, and then worked at the Australia and New Zealand Private Bank (ANZP). Being responsible for turning around the GRC for companies was, at this point, becoming a reoccurring theme.
In late 2015, Beaven became the Head of Elders Financial Planning (EFP) and a few months later a Responsible Manager for the business, Reporting direct to the board of EFP, this gave Tony an opportunity to create the vision, strategy and future direction of the business which offered him yet another chance to develop and implement a GRC framework and turn processes around.
Within 12 months he had successfully created and implemented a substantial organisational and cultural change throughout the business, creating proactive GRC frameworks, diversity, innovation and communication strategies designed to increase brand and industry awareness of the organisation while mitigating current and future risks.
Alongside his career development, Beaven never ceased looking for opportunities to further his own professional development. Indeed after undertaking a Master’s in Business Leadership, he has recently completed a company directors course with the AICD, a GradCert in Compliance and Risk Management, achieved the coveted CCRP designation and become a fellow with the Institute of Managers and Leaders.
Beaven through his own development he has become a subject matter expert on the theory and implementation of Leadership styles, Organisational change and GRC, he is also a self-confessed advocate of using Kantian and utilitarian ethics in organisational decision making believing it is our duty to do the right thing for the good of all.
Architecture of a good culture
Beaven stated that “aspiring to be a Kantian leader on a day by day basis helps me personally keep on track and this flows through the leadership team right through the DNA of our organisation in every interaction with internal and external stakeholders.”
The culture [at Elders] is exciting at the moment because everybody believes they are part of a family and part of the business,” Beaven told the GRC Professional.
Giving back is a reoccurring theme for Beaven. In an article he submitted to the GRC Professional Online entitled ‘The richness of giving back without reward as a servant leader’ he writes:
Reality dictates that we live in a fast-paced, ever-evolving world of change that eats up our time and energy, and sometimes, we forget to give back to those people we care about the most.
Beaven’s preferred style of leadership is not so much reflective of a hierarchical structure; rather, it is something lateral, with the focus of investing in and empowering his staff, the EFP adviser network and all stakeholders which he believes “creates a diverse, cultural framework where you are empowering everyone to feel valued and take an active role in helping shape the culture and direction of the business thus creating an environment of trust, participative safety, and a richness of ideas and diversity.”
“I am great believer in servant leadership, although conscious that as a leader you need to understand and authentically apply the many different styles of leadership on a day by day basis in your organisation, Yes using Servant leadership means sacrificing a lot of your time to make sure you develop other people to be their best, however it demonstrates a care and empowerment culture that creates many benefits,” he explained.
Benefits yielded are both tangible and intangible for the leader and for the business—tangible, in that the business results speak for themselves, and intangible in the sense that leaders who take this approach are rewarded with the respect and loyalty of staff and stakeholders, creating a positive culture that spreads like a wildfire through the DNA of the organisation and beyond.
Proactive GRC and EQ
Beaven said he also takes a proactive, rather than reactive, approach to GRC for Elders Financial Planning.
As an Australian Financial Services Licence (AFSL) holder, particularly in a jurisdiction looking to improve its regulatory systems, you need to proactively manage your GRC obligations in line with regulatory and society expectations
“The proactive push must extend right through the organisations,” said Beaven, “from the induction process, to the training, to the monitoring, to the remediation, and so on.”
Looking into the EQ mirror
Beaven stated that for leaders “Emotional Intelligence is a contributing factor to successfully driving change within an organisation and this means really understanding your people; however this can only be achieved if the leader understands their own emotions, behaviours and how they can impact others.”
This understanding is essential, Beaven believes, since organisational change is hard—a truth only made clearer when the statistics have shown that 70 per cent of organisations fail at change.
“One of the things we have realised when looking at organisational change theory is that, too many times, you see transitional changes or restructures happening with a handful of people at the apex of the organisation.” The problem here says Beaven, is that this fails to empower people at the ground level, those who are operating at the frontline and on many occasions the subject matter experts that can help flush out the impacts or consequences of the change before implementation.
Successful organisational change requires empowering these people to give their invaluable input at the planning, formulation and implementation stages of change thus creating ambassadors and willing followers of the change process.
Business cultural differences between the UK and Australia?
While there are some regulatory and legislative differences between the two jurisdictions, a key question remains the same for organisations both here and there that want good corporate governance outcomes for all stakeholders.
“How do we create a corporate social responsibility and culture where everybody embraces this, where it flows down from the CEO to everyone in the business?” Beaven said. “At the moment, I personally think there is a lack of dedicated and continuous culture and ethics training in organisations.
“I believe this starts at the interview stage with everyone in the organisation to understand and skill gap their self-identity and ethical beliefs thus making sure they are the right cultural fit for the organisation, this can then be followed up with a concentrated ethics training program embedding ethics and ethical decision making into the individuals DNA, enabling them to become advocates of ethics in all their interactions.
“This creates the foundations of an ethical and Kantian culture which flows through the veins of the organisation and leads to making good, ethical decisions.”
Prior to the Global Financial Crisis (GFC), a focus for some organisations had been return of revenue, with culture pushed to the back seat for companies. The approach from both regulators and companies who want to get GRC right, however, has brought about a period of substantial change for the better.
With the various inquiries being undertaken, and with the Royal Commission currently underway, Australian businesses will need to continue to build and improve their own processes and ethical frameworks.
“More and more, I think you will start to see culture and corporate social responsibility, ethical frameworks, governance and compliance coming to the forefront,” said Beaven.
One difference between Australia and the UK, says Beaven, is that because of legislative and regulatory changes in the UK a number of years ago, you are seeing an increased requirement for compliance specialists. This means the average salary in the UK for a compliance specialist is about £100,000 (approximately AUD $180,000).
Beaven hopes this will mean greater recognition and improved opportunities for governance, risk and compliance professionals here in Australia.
“What we are going to see is gradual change in Australia, where governance, risk and compliance experts and specialists will be more in demand as we increase regulation of governance and compliance through ASIC, and obviously through other regulatory bodies.”
Many organisations will find that they need to invest substantially in the upskilling and hiring of staff with the right qualifications to meet the new legislative, regulatory and education standards for the financial services industry.
A rewarding experience in the profession
Beaven said that, for him, watching other people grow and succeed is one of the most rewarding experiences.
“Many years ago, I was the regional manager at Horizons, which was actually helping advisors be successful by training and developing them and putting governance, risk and compliance frameworks in place.”
For Beaven, making himself available to employees at any time has been key to helping those in the business achieve their goals and be their best selves.
“I distinctly remember an occasion where I gave my own personal time up before and after work to help and develop people, who could come in and talk to me about anything and over the course of the week had people coming in and asking me all sorts of things, from life coaching, to governance and compliance questions.”
Importantly, by leaving himself open to his team, he learned a lot about leadership, and freely giving back to others to help them develop.
Advice for developing a successful GRC framework
“Definitely understand it,” said Beaven. “And it’s not just about leadership. Having a sound governance, risk and compliance policy is great, but you have to know how to actually implement it, and you have got to be able to apply it on a practical basis. One thing I can say is to make sure you understand the other subsets—the leadership, the ethics, the culture, the diversity and Emotional Intelligence.”
Beaven believes one must be an ‘all-encompassing leader’. For him this means that understanding the rationale behind people actions and behaviours.
It is only through opening up to one’s employees that you can win their trust and make a sustainable and positive change in the company.
Anthony Beaven, Head of Elders Financial Planning