5.2 Activity: case study by Gia Instructor

Relevant entities putting profit first but more than this individual prioritising their own gains using incentive and bonus schemes. Lack of accountability. The intermediatory receiving payment from the institution they are not able to act only in the interest of one or the other. Not enough regulation in the industry.

2025-08-17 02:24:07 UTC

The need to put profit first came at the expense of ethical behaviour. This was seen as the norm and new employees would feel the need to conform. The leaders were also modelling bad behaviour and everyone's bad behaviour was ignored.

2025-08-17 02:26:15 UTC

Regular commitment to assessing culture APRA and ASIC were supervising Cultural practices. Less complex business models and they no longer deal with industries in the same way that had been involved in the misconduct. There were hefty penalties to pay. More transparent complaint handling process

2025-08-17 02:34:54 UTC

They could have shared data relating to reporting percentages. Rewards for putting customers first making the entire team responsible for better outcomes. More transparent disclosure making the better outcome for the customer the default

2025-08-17 02:38:15 UTC

2026-01-05 02:53:37 UTC

Greed was the major factor that contributed to the misconduct. Companies placing profit before customers and remunerating staff for sales regardless of whether they met product and policy requirements.

There were also insufficient regulation and deterrents in place to quash this behaviour.

2026-01-05 03:06:14 UTC

Cognitive biases meant that executives may have overestimated their knowledge in particular areas and made decisions based on previous dealings. They may have not taken sufficient notice of risks raised by certain areas of the Bank, like audit and governance teams etc. Preconceived ideas about certain risks and behaviours and even teams within the organisations could have biased decision-making allowing profits to be prioritised above customer needs and wants.

Executives modelling poor behaviours then promotes these poor behaviours and the teams reporting to them start to exhibit the same behaviours. These poor behaviours them become the norm and aren't questioned. It is challenging to call a senior out on their behaviour and easier just to comply. Especially when you are rewarded for the poor behaviour.

2026-01-05 03:11:33 UTC

Complaint handling teams and governance teams were created to monitor, punish and correct poor behaviours and customer outcomes. Many Banks divested to focus on their core business of banking. Remediation projects were conducted to right the past wrongs.

ASIC and APRA were also held more accountable to their oversight of the financial system.

Training programs and mission statements along with values were updated to promote more positive behaviours. Reporting became more inclusive of governance related activities. Overall activities became more customer centric.

2026-01-05 03:19:33 UTC

Governance activities need to be aligned not only with the strategic business goals but with regulations and community expectations. Ensuring the right behaviours are rewarded is crucial to governance activities and board members and executives need to be held accountable as they hold power over the people that report through to them. The leaders need to role model the desired behaviour and be rewarded on that basis in conjunction with profit outcomes.

2026-01-05 03:41:02 UTC

Role modelling and reward and recognition can be used by senior leaders as a way to influence positive behavioural change. Publicly rewarding staff who are exhibiting the desired behaviour makes the behaviour itself more desirable. Gentle nudges and role modelling, create new social norms and this can create long term change. Making compliance with behavioural expectations and governance requirements, the sought after reward, changes the Orgs focus and creates buy in.