In the final report of the banking Royal Commission in 2019, Commissioner Hayne described workplace culture as a “root cause” of misconduct in the financial services industry. A prompt regulatory change after the release of the Hayne report was the introduction of additional requirements on ASX-listed companies in the area of ethics and workplace culture. As we advised in our recent Client Alert, ASX-listed companies must now have Board-approved organisational values, a Code of Conduct and new policies in place by 30 June 2020.
The ASX Corporate Governance Principles and Recommendations (4th edition) have a strong emphasis on culture and values. The Principles provide that: “a listed entity should instil and continually reinforce a culture across the organisation of acting lawfully, ethically and responsibly”. This includes the articulation and disclosure of organisational values, a whistleblower policy, an anti-bribery and corruption (‘ABC’) policy, and a Code of Conduct to underpin the desired culture of the company.
Listed entities are required to ensure that their organisational values are aligned with business strategy, remuneration structures and delivery of long-term growth. Further, the Board must have considered and approved the company’s Values and Code of Conduct, taking into account the specific factors including culture and risk. Mechanisms must be in place for reporting all material breaches to the Board or a Board committee, and training must be run for all staff.
For all organisations, workplace behaviour matters
Whether or not your organisation is a listed company, academic research and public enquiries have repeatedly proven that ethical behaviour in the workplace builds long-term, sustainable value in the organisation. Failure to manage the risks of poor behaviour in the workplace creates risks for worker health and safety, business reputation, standing with stakeholders, and legal compliance.
The Ethics Centre in Sydney recommends that, to establish a healthy and robust workplace culture, employers must ensure that the systems, processes, policies and rules – as well as the values and principles that underpin everything the organisation does – are aligned. They call this the ‘ethical framework’ of the organisation. The culture that is the lived experience of employees, customers and other stakeholders, and the set of behavioural standards that the employer imposes, must be connected with the values and principles that the organisation aims to uphold.
Commissioner Hayne made similar comments in the final report of the Banking Royal Commission, advising that workplace culture “must be viewed as interconnected” with every other recommendation in the report. Culture can both “drive or discourage misconduct”, so it must be viewed holistically.
An Ongoing Process of Review
Assessment and review of workplace culture, conduct standards, and issue-specific policies must be an ongoing process, rather than a one-off or ad hoc activity.
Worklogic’s approach to Conflict Management Systems Design is a comprehensive review of the organisation’s system for guiding employee behaviour, supporting employees to come forward to concerns, handling complaints through fair channels, and building an ethical culture. We work through the organisation’s values, culture code of conduct, policies, personnel, processes and other factors – and assess their quality, interconnections and cohesiveness. We identify opportunities to strengthen the organisation’s conflict management capacity and build its workplace culture.
The current restrictions on business and social interaction have altered how everyone works and runs their daily lives. While we’ve all been busy handling unusual business pressures in early 2020, for some people the new distance from the everyday workplace provides an opportunity to reflect.
You can conduct your own ‘health check’ of your business’s ethical framework. What is the ethical framework at the heart of the governance of your organisation? Do you offer your employees and stakeholders a holistic and coherent package? What records are created by complaints-handlers, and do you analyse those records for systemic issues? How do you monitor culture over time? Worklogic has created a simple checklist for employers to use, which you can download here.
Worklogic Can Help!
Worklogic supports organisations big and small to:
- develop, revise or review Organisational Values, Codes of Conduct, Whistleblower and Corruption Policies
- establish whistleblower protection regimes and complaints-handling hotlines
- create Board briefings and reports
- review and strengthen complaints-handling systems
Worklogic Webinar – Ask Us Anything – Live With Worklogic’s Directors!
On Thursday 14th May at 12.30pm, Worklogic will host a live Ask Us Anything webinar. Jodie Fox, Jason Clark and Rose Bryant-Smith will draw on their decades of experience as investigators, workplace relations advisors, and fixers of teams. We can share tips and tricks we have learned, deidentified ‘war stories’, and the answers to those tricky questions you’ve always wondered about. Register now.
About Jodie Fox
Jodie Fox is passionate about helping people and organisations manage workplace conflict in a productive way. She specialises in workplace investigations, workplace reviews and mediations to address and resolve complaints and foster a positive workplace culture. An experienced employment lawyer, she works with clients from a diverse range of industries providing pragmatic and strategic advice. She is a knowledgeable and engaging writer and speaker.
Please contact Jodie for an obligation free consultation via email or call (03) 9981 6558.