How can our major institutions, particularly from the banking and finance sector retain their corporate legitimacy? What role should their boards be playing?
Product disclosure laws are meant to help insurance buyers make informed rational decisions. Our research shows more must be done to protect consumers.
Dirk Baur, The University of Western Australia; Elizabeth Ooi, The University of Western Australia et Paul Gerrans, The University of Western Australia
Let’s recognise the limitations of regulation as we try to improve outcomes. Money spent on new regulations may be better put to further educating future customers.
Researchers found that larger banks are more likely than their smaller peers to experience “operational losses”, which includes a failure to meet obligations to clients.
The financial services industry is in need of a new paradigm to rediscover what finance is for – to improve the financial and economic well-being of society.
Putting regulators inside corporations isn’t new, and the US experience highlights risks of regulatory capture, but the move could make a difference if ASIC is shifting to more robust enforcement.
Evidence to the Banking Royal Commission points to the systemic failings of corporate governance built on the idea of shareholder primacy. It’s time to rethink the unitary board system for a start.
Pressure to meet ever-higher performance targets can lead to misconduct of the sort exposed by the royal commission. Targets need to operate within a framework of ethical governance to avoid this.
Restructuring might help manage conflicts of interest between offering advice and selling products, but it doesn’t fix the culture that sacrifices customers’ interests to the pursuit of profits.