Home' HR Monthly : November 2018 Contents 6
n a recent version of this column, an outline was provided of some
key learnings for our profession from the current Banking Royal
Commission (BRC). As we move through 2018, company directors
and HR executives have been taking the BRC proceedings onto their
compulsory reading lists, along with the recent APRA Audit report into
culture at the CBA. Over the last two years, APRA and ASIC have both
made public statements that organisational culture is a critical part of the
fiduciary duty of Boards, with concomitant responsibilities to monitor
evidence on this within their organisations, and to intervene with
corrective action and remedies, when necessary.
Many readers will recognise that culture often becomes part of a “flick
it to HR” list when Boards and CEOs find the going too hard to get their
heads around, or where they don’t like the results that come forward
from culture su rveys. The APRA Culture Audit and current evidence
from the BRC however have both moved this topic from the ‘flick it to
HR” list to the “running on empty” schedule. In recent times, I have
attended a range of seminars and meetings on ‘culture in business and
board / executive responsibilities’, and its most regrettable the dominant
reaction has been ostrich like. Culture is seen as a topic where “someone
else will get caught, and not me”. Or that “I think ou r organisational
culture is very strong” without having any objective evidence of this.
APRA and ASIC themselves will be subject to ex tensive questioning
at the BRC, and some predict its final report will cover regulatory
shortcomings. As a result, culture is likely to be a highly positioned meter
on regulators’ 2019 dashboards. To demonstrate they are doing their job
better, these regulators may also be looking for some high-profile scalps.
These signs serve as a warning light on HR’s own dashboard. It is
the time for our profession to step up on culture within our employing
organisations, to monitor the signs and to ring the bell within the senior
management team and board, on the risks and consequences of ignoring
bad systemic behaviours.
Culture has been described by former Australian of the Year, and
retired Head of the Australian A rmy, General David Morrison as
“what’s seen as the acceptable norms of behaviour in an organisation,
and is expressed also by the stories we tell each other about ourselves.”
Morrison also said to his colleagues that “if you walk past bad culture
and inappropriate behaviours, but do nothing – you are culpable too.”
Culture is therefore vested in an organisation’s values and their
practice. Culture is also enshrined in an organisation’s business ethics.
The good news is that positive culture and good business performance
are highly correlated in both public and private sectors. So its worth
trying to get it right.
Whilst HR practitioners cringe when the full responsibility for culture
and ethics is flicked to them, our profession does have some primary
responsibilities here. In high performing and ethical organisations, H R
plays a vital role to ensure that:
• Your organisation adopts a values-based approach to ethical decision-
• Co-workers are better equipped to face ethical dilemmas on the job;
• Ensuring your colleagues know that ethics in business is about ‘doing
the right thing’
• Advocating that organisations can suffer reputational damage if their
values and practices aren’t embedded within an ethical framework.
HR practitioners sometimes see business ethics as the astro-physics
of the social sciences. Professor Bob Wood of the Melbourne Business
School, and one of Australia’s leading business ethics practitioners, said
to me “it takes about two minutes to learn the history of ethical principle,
but a lifetime to practice it”.
That two minute tutorial goes something like this. In the centuries
following the writings of Socrates on what makes for a compassionate
and sensible society, two main schools of thought developed on ethics.
First, the Kantian school stressed the importance of absolute duty
or principle. Values like honesty, trust, and good faith are typical
centre-points within Kantian thinking. But as we know from HR itself,
there are always conund rums thrown up by inflexibly pursuing absolute
standards. For example, each of us would probably claim honesty as
being hard wired within ourselves. Yet would each of us be honest with
a person seeking to do serious harm to a third party where
only we knew the potential victim’s whereabouts? In
that instance you would probably choose not to be
honest with a menacing perpetrator.
The second ethics school is known as Utilitarian.
Here the governing principle is to pursue the
“greatest good for the greatest number”. But this
school accepts some will miss out against access to
a universal standard, but the majority will do ok.
Sound ethical practice essentially requires a
balancing up of the teachings of both schools.
My next article will cover the
main areas where ethics impacts the
workplace, and also some features for a
successful execution of the HR role.
All part of getting ready for the
expected turbulence around culture and
ethical work practices during 2019. •••
HR has an ethical and cultural role to play.
BY PETER WILSON AM FCPHR AHRI CHAIRMAN
To read past Perspective columns by Peter
Wilson, visit hrmonline.com.au
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