The Metaphorical Glass Jaw

As I get older (maybe not necessarily wiser), I feel that as a society, we are becoming far less tolerant and yet far more sensitive – something of a paradox, possibly linked to a decline in personal resilience and a lack of quality and robustness in public discourse. And for a country that is both a secular state and a liberal democracy (and definitely not a theocracy), there has been a surprising amount of debate in Australia recently, about the need for a new or revised “freedom of religion“.

John Stuart Mill – Image sourced from Wikimedia

Much of the commentary has been prompted by the thoughtless and potentially harmful remarks by a professional sports player, who espouses a particularly fundamentalist strain of Christianity. Because the very public expression of his personal beliefs led to the termination of his employment, this has been interpreted as a curtailment of the player’s freedom of religion.

Without getting too legalistic (and there is an administrative review pending), the player’s public statements were out of line with the social values and civil rights espoused by his employer – to the extent that they could bring this particular sporting code into disrepute. It was also a repeat incident. At the very least, these comments could have led to a reduction in the employer’s revenue from sponsors or spectators. (And let’s consider that his comments drew so much attention because he had the privilege of a public platform, one which came as a result of his employment status and his professional profile.)

According to this player’s particular creed, his human-constructed belief system permits, condones and even encourages the use of language that bullies and belittles people who don’t adhere to his own views on sexuality, lifestyle choices or even “belief” itself. While much has been said about the homophobic nature of the said player’s tweet, let’s not forget he also targeted atheists in the same context, simply because they are non-believers.

As I frequently tell customer call centres, who often like to blame the “system” for their own organisation’s failings, a system is only as reliable as the people who design and run it. So, if being an adherent to a particular belief system means you have to hold and profess abhorrent views, especially those that are out of step with civil society, then clearly there is something at fault at the heart of that mechanism.

I recently heard a speech by a retired judge on human rights and civil liberties. He referred to an aphorism attributed to John Stuart Mill, in connection with his treatise “On Liberty”, and the harm principle:

“Your Liberty To Swing Your Fist Ends Just Where My Nose Begins”

In other words, you may be free to say what you like, but Isaiah Berlin’s concept of negative freedom means that (despite Voltaire’s standpoint in defence of free speech) even your verbal punches are not permitted to interfere with or harm someone else’s rights – yet alone instill in them a fear for their personal safety and human dignity.

Nowadays, some might say that too many people are prone to having a metaphorical glass jaw – that they take offence too easily, and seek to find malicious intent in any views or comments that they find objectionable or that do not accord with their own world view. Equally, people can (metaphorically) stick their jaw out, seeking to provoke a reaction by drawing attention to themselves, so that they can claim “foul” when they bang up against a countervailing fist. The boundary between personal rights and freedom of expression is becoming increasingly blurred.

When it comes to calls for the special protection (and even promotion) of religious freedoms, I have something of a problem. Quite apart from the entrenched social prejudices inherent in many organised religions, it seems incongruous that such institutions can claim tax benefits as charitable bodies, and receive public funding while enjoying exemptions from certain anti-discrimination laws.

Although we don’t have a law against heresy in Australia, we still have blasphemy laws in most States. Even though they are rarely invoked, the fact that they exist reinforces the notion that far from needing a “freedom of religion”, religious beliefs are somehow already seen to be above the law. Surely, in a multi-cultural, secular and pluralistic society, religious beliefs will have to take their chances alongside (and rub up against) the rest of human constructs and natural systems – science, history, psychology, philosophy, politics, sociology.

Next week: Startup Vic’s Health Tech & Med Tech Pitch Night

 

 

 

 

Culture Washing

Banks, Parliament, Cricket Australia, Political Parties, religious bodies, the ABC – the list of national institutions that have come under fire for failed governance and even worse behaviour continues to grow. Commentators are blaming a lack of “culture” within these organisations.

Some Boards end up washing their dirty laundry in public….. Image Source: Max Pixel

Already we are seeing a “culture” movement, which will inevitably lead to “culture washing”, akin to “green washing”, and other examples of lip service being paid to stakeholder issues.

Just this past week, the interim report of the Banking Royal Commission prompted the Federal Treasurer to say that banks need a “culture of enforcement and a culture of compliance”. I can already imagine the “culture checklists” and the “culture assessment” surveys and feedback forms….

There are consulting firms building “culture risk” assessment tools. There may even be some empirical evidence to suggest that companies with better employee engagement and “culture” can generate better share price performance. Even the AICD is getting in on the act with its upcoming directors’ update on how boards can gain “insights on culture”, and how to set the “tone from the top”.

(Actually, all any director needs to do to monitor the “culture” of their organisations is to track social media and sites such as Glassdoor, Whirlpool, Product Review, etc..)

But corporate and organisational “culture” is organic, and cannot be built by design. It is a combination of strong leadership and core values that everyone in the organisation is willing to commit to and adhere to. It also means ensuring that everyone knows what is expected of them, and the consequences of failing to meet those standards are clear.

As for employee engagement surveys, one of my colleagues likes to say, “The only question to ask is: ‘Would you recommend this organisation as a place to work, and if not, why not?’” Another colleague regularly says to his own teams, “If this is no longer a fun place to work, then let me know”.

Next week: Why don’t we feel well off?

 

Banks under the spotlight (again)

About 6 months ago, I posted a blog on the current state of banking and financial services. It was published before the proceedings at the Royal Commission got underway, and since then we have heard a litany of complaints of malpractice and other inappropriate behaviour by some of our major financial institutions. We have also seen the publication of the Prudential Report into the CBA, commissioned by APRA. But despite the horror stories, is anyone really surprised by either of these findings?

Image: Jacob Edward; Source: Flickr; Some Rights Reserved

Some have suggested that our banking culture is largely to blame – but to me, that is somewhat simplistic, since I don’t think that the culture within our banks is so very different to that of other large companies or statutory corporations. (But I will explore this topic in a future blog.)

We have a love-hate relationship with our financial institutions, especially the 4-pillar banks. The latter have continued to be regarded as some of the most stable, profitable and prudent banks in the world – they are probably among the top 30 banks globally based on their credit ratings. Moreover, during the GFC, it was largely agreed that, despite their participation in complex financial products such as mortgage-backed securities, collateralized debt obligations and credit-default swaps, the big 4 banks helped to prevent a total meltdown in the local capital markets because they had reasonably strong balance sheets, and they worked closely with the RBA to avert the full effects of the GFC.

In fact, so enamoured are we of our banks that, despite the Royal Commission, the banks will not face significant regulatory reforms. One economist at a major fund manager I spoke to suggested that even an in-coming Labor Government would have to confine itself to some sort of bank tax. Anything that would undermine the 4-pillar policy (such as increased competition, rationalisation or foreign ownership) would likely be seen as unacceptable in the current political environment. In addition, since the financial sector makes up such a significant part of the market capitalization of the Australian stock market, most voters hold shares in the banks, either as direct or discretionary investments, or through their superannuation fund. Impacting the financial performance of the banks will have a knock-on effect for customers and shareholders alike.

Despite the relative strength of Australia’s financial services regulatory regime, it’s clear that part of the blame for the current malaise lies with the regulators themselves. None of the transgressions complained of at the Royal Commission or uncovered by APRA’s report on CBA suggest that new regulation is needed (unless we are talking about structural reforms…) In the wake of the GFC, and in line with global banking standards, banks have had to adjust the levels of risk-weighted capital they hold, and meet more onerous compliance costs – as well as rein in riskier lending practices. Yet, it feels like the regulators have not been as vigilant or as pro-active as they might have been – or there is such a “checklist” mentality towards compliance and risk management that banks and their regulators have lost sight of the substance of the law, not just the form.

Having read the APRA report on the CBA, there are a number of issues which need to be addressed, as I suspect that they are replicated (in whole or in part) among the other major banks:

  • All of the incidents covered by the APRA report occurred since the GFC – so, maybe increased compliance obligations are not the answer to these problems, but better supervision and enforcement?
  • Technology is only mentioned about a dozen times in the report – and technology was placed very low in the organizational framework for CBA’s Better Risk Outcomes Program (BROP) – yet banks are increasingly becoming technology businesses
  • Decision-making was seen as being too slow and too reactive, in part due to a collegiate and collaborative environment (surely, the signs of a positive culture?)
  • I would suggest there was a lack of external or independent input at the executive and even board level, and an over-reliance on in-house technical experts – especially in the areas of IT and risk
  • Further, the typical silo structures within large, complex organisations like banks, are the result of an over-emphasis on products and processes, rather than on customers and outcomes. To quote the APRA Report:

“…too many handoffs between silos and layers, with accountability often not clear enough and agreements hard to reach…”

  • Equally, a lack of delegation (especially to front line and customer facing staff) only compounds the lack of empowerment, accountability and transparent decision-making

Despite the strength of the 4-pillar banks and the market share they command, they face disruption and disintermediation from digital platforms, Blockchain technology, decentralized applications, P2P solutions and challenger brands. In fact, banks will increasingly become the digital custodians of our financial data – we will end up paying them to manage our data (rather than simply charging us transaction fees). Banks will also need to restructure their products and services around our personal financial needs and obligations according to our stage of life and other circumstances (rather than simply selling us products), along the lines of:

  • Essential – housing, living, education, health, retirement
  • Mandatory – superannuation, taxes
  • Discretionary – investments, holidays, luxuries

That way, banks will also have a much better “whole of client” view of their customers, rather than the current product bias.

Next week: Culture Washing