Wealth managers and financial services organisations that are working their way through the implications of the Royal Commission have been told to start thinking differently regarding their leadership structures – by the regulator APRA.
Changes to organisational management is required in order to better manage external and internal risks, conflicts of interests and ensuring client fiduciary duty is met. Some even require the approval of the prudential regulator before their restructuring can proceed.
Other organisations may better manage internal and external business risks by appointing co-CEOs. The co-CEO structure enables business both focus as well as ensuring fiduciary duty and organisation reputation remain intact.
It is important to set the right culture from the Board level down. Boards could also consider appointing co-CEOs, one being a former regulator to bring governance and compliance disciplines, and the other being a strong business leader. This may overcome many of the reputational issues being faced by these organisations.
This approach would provide a better start to help repair issues identified by the Royal Commission and also reputation by providing stakeholders with the peace of mind that an experienced regulatory professional was embedded within such organisations.
While the industry disclaims that past performance is not a guarantee of future performance, it is when it comes to people. Organisations need to engage proven performers. HR departments and savvy business leaders recognise that good people can make a big difference to their performance and culture.