Australian Securities and Investments Commission chairman James Shipton has called for the financial services industry to address conflicts of interest within its businesses to repair damaged consumer trust and better meet the expectations of the community.

Speaking at the recent Australian Council of Superannuation Investors Annual Conference in Sydney, Shipton said there was a tremendous “trust deficit” within the community right now and ASIC is focused on diagnosing the issues, which he called both “jarring” and “confronting”.

He added that the industry must support and reinforce the council’s efforts to address ongoing challenges of misconduct and called upon everyone at the conference to do their part.

“Trust can be restored only if companies work root-and-branch to change their ways,” Shipton said. “They must rebuild their culture from deep within. It’s essential that investors and organisations like ACSI hold the industry to account for malpractice, malfeasance or unacceptable harm to consumers.

“In recent times, we’ve seen the important role that investor engagement has played in influencing corporate behaviour. The sustained engagement and active stewardship by investors will be fundamental to restoring trust, better governance and good corporate culture in Australia.”

Shipton said his concern was that many people within the industry had lost sight of the purpose of financial services, in particular the chief task of managing other people’s money. He said many companies in the sector had become insular and focused on only maximising earnings, instead of thinking about obligations to the community and doing business fairly.

Australian Institute of Company Directors chairman Elizabeth Proust echoed these sentiments in a later discussion and said bad corporate culture goes against the Australian way.

Former chair of AustralianSuper Elana Rubin said ASIC’s voice needed to be louder in the community and had to promote what it’s doing.

“We all have a role but the regulator has a very important role,” Rubin said. “It has to be seen by the community as protecting their interests.”

The Ethics Centre executive director Dr Simon Longstaff added that there was an expectation that companies would do what’s right only if forced to by a regulator. He said there needed to be an organic connection between the self-motivations of businesses and their purpose.

“You have to be clear about your purpose,” Longstaff said. “If you think that your purpose is just to be profitable, then it doesn’t give you any way to discriminate between the choices you have, whether it’s strategy or execution or investment of capital. Purpose is an extraordinary motivating force in a world in which businesses are less defined by what they do than by what they mean.”

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