“Litany of Revelations’ in Australia border on criminality
Suzanne Snively
The cricket ball tampering incident was bad enough for the Aussies’ reputation.
It has been pushed out of the headlines by The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
Australian banks and insurance companies have provided “A litany of revelations” to the Royal Commission. The Australian Courier Mail editorialised on April 21, 2018 that these “could at the very best be described as unconscionable, at the worst potentially bordering on criminality.”
The AMP Case
Major Australian banks and insurance companies have testified to giving customers inappropriate advice without proper disclosure. They have charged fees for services not provided and charged hidden fees.
AMP was found to have charged services fees for financial advice to customers after death, and resignations rapidly followed.
An “independent” review of AMP, commissioned because of a request from the Australian Securities and Investment Commission, turned out to be anything but independent.
The AMP board is reported as requesting and receiving significant amendments to the report prior to publication, obscuring important facts such as fee practices.
The point of transparency and accountability is to strive to do the right thing in all activities.
Challenge for New Zealand
New Zealand banks and insurance companies have been quick to distance themselves from the evidence found by the hearings before the Royal Commission.
The challenge is that New Zealand’s largest four registered banks – ANZ, ASB, BNZ and Westpac, are subsidiaries of Australia’s four largest banks. AMP is one of New Zealand’s largest insurance companies.
It is naive to believe that the New Zealand system is different without solid evidence. It is not enough to have the industry self-disclose.
This after all, is what happened prior to the current Australian inquiry.
Only through the process of independent scrutiny have we learnt what really is going on.
Wake-Up Call
The Australian Royal Commission’s early findings provide a wakeup call to New Zealanders. We need to make sure that we have authenticated evidence that our New Zealand banking and financial services practices and operations, undertaken for the banks own customers, have been conducted with integrity and in the best interests of their customers.
Misconduct or Corruption?
Based on evidence before the Commission that has to date been made public, much of the misconduct could be regarded as corruption. Corruption is the abuse of entrusted power for private gain.
The best antidote for corruption is the existence of strong integrity systems within organisations. An integrity system refers to the features of the entity’s structure that contribute to its transparency and accountability.
In high integrity organisations, transparency and accountability starts at the top, led by good governance supported by management policy and practice.
It is reflected in financial performance, information and communication, staff and other human resources behaviours, the treatment of customers, the operating environment, and the approach to monitoring and procurement.
Transparency International New Zealand’s Financial Integrity System Assessment (FISA) aims to assess the strength and integrity of New Zealand financial organisations from a leadership position. Depending on the findings, the survey will help demonstrate independently and objectively the areas where our financial organisations are transparent and accountable.
Leadership imperative
New Zealand can own the leadership position and model good behaviour to the rest of the world. High engagement and participation rates in the TINZ FISA survey, when it is launched over the coming months, will send a strong signal that New Zealand financial organisations are genuinely striving to strengthen their integrity systems.
The survey is also designed to link activities aimed at addressing corruption, to strategic steps that can be taken to enhance the returns from a trusted reputation.
There is still time prior to the distribution of the FISA Survey for identified participants from the financial sector to seek independent reviews from their professional advisers.
This will prepare New Zealand financial organisations to provide strong evidence in their FISA responses of how they are striving for transparency and accountability.
Suzanne Snively is Chairman of Transparency International New Zealand Inc based in Wellington. The above article appeared in the May 2018 Edition of ‘Transparency Times.’
Additional Reading: Our Leader, “Challenges facing New Zealand banks” under Viewlink.
