Corporate Culture: Enforcement in the Australian Financial Sector

This essay provides a comprehensive overview of corporate culture, defining it as a set of shared values and assumptions within an organization that influence employee behavior and business practices. It emphasizes the importance of a positive corporate culture for client trust and ethical conduct, while highlighting the risks associated with a negative culture. The essay details the process of developing a strong corporate culture, starting with establishing core values and ensuring their consistent implementation, particularly from leadership. It explores the Australian Securities and Investments Commission (ASIC)'s focus on corporate culture within the financial sector and the impact of unethical practices. The essay also discusses key features of the Australian Corporate Culture Ethics Index, emphasizing the importance of ethical behavior, leadership, and integrity. Finally, the essay outlines how corporate culture is enforced in the Australian financial sector, including ASIC's risk-based investigations, remediation strategies, and the implementation of policies to ensure compliance and ethical practices. The essay references several key studies and reports to support its arguments.

Running head: CORPORATE CULTURE 1
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Corporate Culture its Enforcement
Corporate culture is an established set of shared values or assumptions that are practiced
in an organization. Corporate culture can also be described, as the fundamental mindset of the
business and its employees. Culture motives and inspires employee’s attitudes and actions
towards clients and the general business.
It’s very important for organizations and businesses to develop and maintain a culture
that its clients can believe in. Businesses and organizations that do not ensure a good corporate
culture are in danger of losing their clienteles to businesses that do. Bad corporate culture can be
a source of delinquency (Marginson and Considine, 2010). Equally, a decent corporate culture
can be a motivation for best practices or moral behavior. Upright behavior can help businesses
move beyond minimum operating standards in complying with best practices that protect
investor interests by ensuring a return on their investments.
Developing a Good Corporate Culture
A strategic preliminary point for a noble corporate culture is developing your firm's
values system and ensuring that they are implemented and practiced. Decisions about an
organization’s values begin at the top. A values-led corporate culture supports virtuous conduct.
However, for your corporate principles to be prudent at supporting respectable corporate culture,
it is critical that the management team champions the firm’s values to the rest of the business.
Directors need to guarantee that strong principles are salient throughout the institution, and are
practiced by workers as part of their day to day routines.
ASIC Emphasis on Corporate Culture

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ASIC focus on corporate culture is because of its important place in the operation of the
financial institutions. By concentrating further on corporate culture, ASIC expects to get early
warning indications when an organization's corporate culture may be heading in the opposite
direction.
Evidence in the media and auditors reports has shown that ineffective corporate culture
always leads to unfortunate results for depositors and stakeholders hence badly impacting on the
good reputation of the Australian financial markets and subsequently eroding investors and
financial stakeholders trust and assurance (Job, et. al., 2017). For example, in Australia, the
continuing issuing of press statements regarding Australia’s financial industry, in regard with
ongoing media news connecting to the financial corporate culture shows misrepresentation of
profits and cooking of the financial statements which eventually undermine investors and
financial stakeholders trust and confidence in the financial system.
Important Features in the Australian Corporate Culture Ethics Index
In connection with the financial and banking sector, the corporate culture ethics Index
shows that 78% of Australians believe that corporate culture is crucial to ensuring proper
behavior within the banking and finance industry (Porta, et. al., 2016). Many investors and
financial stakeholders in Australia also believe that corporate governance exercises and
procedures are important in ensuring principle conducting the banking and finance industry.
Leadership plays a crucial role in the moral operations in the financial business industry as
witnessed by 82% of Australians. Responsibility and integrity are also rated as the two most
significant factors in ensuring proper corporate conduct.
How Corporate Culture Is Being Enforced in the Australian Financial Sector

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ASIC openly declared that it was planning to include good corporate culture into its
duties as a conduct watchdog by comprising culture in its risk-based investigation assessment
and this will be aiming at the following parts where bad behaviors may raise the possibility for
bad corporate culture conduct:
• Remediation strategy and measures
• Remunerate and motivate employees by giving merits and promotions
• Employing and teaching policies of good corporate governance
• Putting in place discreet whistle-blowing policies for any breaches in corporate culture
• Ensuring no conflicts of interest in the management of businesses
• Developing proper channels for complaints reporting, and complaints handling
• Constant staff engagement and involvement in organizations management
• Having good corporate culture governance systems that support a customer-focused
environment and growth.
Following the remarks from watchdogs both domestically and internationally on the
implications of good or bad corporate culture, regulated entities have reviewed their compliance
with policies and corporate culture systems to ensure that good corporate culture is seen in the
policies and procedures of the business (Cunningham, 2012). Organizations should also ensure
that proper policies are in place to ensure that compliance and good corporate culture practices
are in place.

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References
Cunningham, S. (20012). From cultural to creative industries: theory, industry and policy
implications. Media International Australia incorporating Culture and Policy, 102(1), 54-
65.
Parker, R., & Bradley, L. (2011).Organisational culture in the public sector: evidence from six
organisations. International Journal of Public Sector Management, 13(2), 125-141.
Dunphy, D. C., &Stace, D. A. (2018). Transformational and coercive strategies for planned
organizational change: Beyond the OD model. Organization studies, 9(3), 317-334.
Marginson, S., &Considine, M. (2010). The enterprise university: Power, governance and
reinvention in Australia. Cambridge University Press.
Porta, R., Lopez‐de‐Silanes, F., &Shleifer, A. (2016). What works in securities laws?. The
Journal of Finance, 61(1), 1-32.
Job, J., Stout, A., & Smith, R. (2017). Culture Change in Three Taxation Administrations: From
Command‐and‐Control to Responsive Regulation. Law & Policy, 29(1), 84-101.