Friday, 8 April 2016

Culture Shock

Greg Medcraft, the Chairman of the Australian Securities and Investments Commission (ASIC), in a recent speech reiterated ASIC’s focus on the importance of culture within corporate organisations.

In a previous blog, Organisational culture: ASIC's renewed focus, we discussed Commissioner, Greg Tanzer’s, earlier speech on the importance of organisational culture, and hinting at a renewed emphasis by ASIC to target poor culture.  Mr Medcraft has now re-affirmed ASIC’s targeted focus.

Regulatory intervention
Mr Medcraft acknowledges that culture cannot be regulated with black letter law.  Instead, it will be incorporated into ASIC’s risk based surveillance reviews.

Coinciding with his speech, ASIC also released ASIC report 474, which focuses on corporate culture within the funds management industry.  The report pinpoints several indicators of culture which will likely be at the forefront in ASIC’s surveillance.  ASIC notes that, while the indicators are not necessarily indicative of poor conduct, they may be suggestive of circumstances when ASIC may intervene.  These indicators include: