While much of the commentary in the Hayne royal commission’s final report concerns misconduct by banks, retail super funds and other for-profit entities, its central message on the importance of getting culture right is relevant to all financial service providers, including profit-to-member super funds.

While giving evidence at the commission hearings, outgoing NAB chair Ken Henry said it could take as long as 10 years to change the culture at NAB. Building a positive culture takes time and commitment, but it shouldn’t take forever nor cost a fortune in consultancy fees.

Culture is lived by everyone in the business, but it starts at the top. The credibility of management and directors is critical for culture to develop.

Leaders build trust throughout the organisation when they are seen to be true to the organisation’s values and purpose. They need to walk the talk.

A case for reform

Speaking at AIST’s recent Conference of Major Super Funds, Monash Business School professor, Graeme Samuel, warned organisations looking to review their culture against spending millions of dollars on external consultants.

Samuel – who is leading the capability review into APRA in response to the commission’s recommendations – said if the leaders of the organisation didn’t know what good culture looked like then they shouldn’t be in the job.

Commissioner Hayne has a similar no-nonsense view.

Rather than call for far reaching law reform to tackle the problems of poor culture and governance uncovered by the commission, he made a compelling case for doing the right thing and abiding by existing rules.

Many of Hayne’s observations are merely a reminder of what all directors, super fund trustees, and senior executives need to do.

For trustee directors and senior managers of a super fund, this requires being continually across their duties, their fund’s trust deed, the SIS Act and their fund’s policies – not as a box-ticking exercise but by living these rules and really what they mean.

The right training of trustees is also crucial, and funds should not waste this opportunity for learning and growth for their fund and their fund members.

Hayne has added the concept of community expectations to the lexicon in our industry. A new, higher bar has been set.

Unique opportunity

There is an excellent opportunity for entities in the financial services sector to regroup and rethink their purpose. To really think through their range of key stakeholders, this time not forgetting the customer, and in our case, the member.

It also creates a unique opportunity for profit-to member super funds. The things that unite profit-to member funds are the ethos –our non-conflicted governance structure, our values and the commitment to member representation on our boards.

It is what stops practices and behaviours that harm consumers from developing and taking hold. We need to be vigilant that we never lose sight of the core of who we are. We are proud stewards of other people’s hard-earned savings.

And as the industry grows, and as individual funds grow and become major financial institutions in their
own right, we need to ensure that we have the discipline and internal risk management practices and controls in place, to ensure that we never lose sight of our mission – to deliver better retirement futures for our members.

And for that, we don’t need more laws, more regulation. We just need to remain true to our purpose and do what is right.