Sir Chris Kelly's "Review of the Cooperative Bank: Failings in Management and Governance" was published today.If we just focus on the section on culture then you get a good indication of what went wrong based on how the place operated and the importance of having openness and transparency in safeguarding against such failures and potential disasters. Just to quote one of Kelly's key points on culture "Tolerating- as the Bank did- a culture of under-performance, weak transparency and a lack of accountability, constrains an organisation's ability to respond quickly and robustly to any challenges it faces".
It continues " within the Bank, the culture did little to discourage the wrong behaviours or to focus attention on areas of highest risk, encourage staff to speak up about potential issues....The bank appears to have operated with managers discouraged from speaking beyond their own areas of responsibility...when staff try too hard to anticipate the reaction of their bosses, self censorship can lead to important issues being suppressed".
This then clearly shows the importance of having a culture where openness and the confidence to speak out at all levels is seen as a fundamental aspect of risk reduction and risk mitigation. Genuine ethical cultures surely create organisations which are better equipped to avoid/respond to disasters and reduce reputational damage giving them sustainable competitive advantage?
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