In August 2012, the CIPD responded to the new Parliamentary Commission on Banking Standards’ inquiry into culture and standards in the UK banking sector. The Commission was recently appointed to consider and report on professional standards in UK banking, including lessons to be learned about corporate governance and transparency, and the implications of these for future policy and regulatory development.
The CIPD response highlighted that whilst specific institutions and high-ranking individuals have recently been very publicly held to account over their actions, the problem extends far beyond specific cases and is in fact a matter of the prevailing culture in the financial sector. Recent failures in the system are largely down to what have become deemed ‘acceptable’ corporate behaviours and cultural values, as much if not more so than regulatory frameworks.
Whilst we do not believe it is possible to legislate for culture change, change is needed and can come from various directions. Our response focused in particular on the crucial role the HR function has to play in driving and sustaining more responsible business operations. As the function responsible for understanding corporate cultures and leadership behaviours, HR leaders have the insight and ability to educate and challenge business executives, promoting the practices and interventions required to change corporate culture over time.