What is the difference between a bank, a national sports team and a car manufacturer?

When it comes to deep cultural failings leading to widespread damage to reputation and loss of confidence across entire sectors - nothing!

We have considered the root causes of these cultural failings - from three real examples across very different sectors - and found that seven common culture and conduct themes emerge.

We hope that, by understanding these themes, leadership teams from all sectors will be better able to focus on culture in a meaningful way, and avoid the potential pitfalls that can have significantly damaging effects.

The financial services sector is one of the most heavily regulated industries globally, with focus on culture and conduct increasing significantly in the aftermath of the 2008 financial crisis. In the UK regulators have been at the forefront of tackling conduct issues including through a combination of 1) increased accountability of senior employees; 2) greater scrutiny over compensation frameworks; and 3) requiring firms to explicitly consider their conduct risks and how those risks are being managed. Financial services regulators globally* are also focussed on the way boards and senior leadership define and reinforce their firm's culture as well as the behaviour expected from all levels of the organisation. Despite ten years passing since the financial crisis, the spotlight continues to be shone on the culture and conduct across financial services globally - most recently in Australia where a Royal Commission review** has found widespread misconduct in financial services.

The UK's Financial Conduct Authority (FCA) has said that nothing short of a cultural transformation in the sector is required but concedes that this is not easy to achieve and therefore requires the long-term commitment of an organisation's senior leadership. There is no single agreed definition of culture, nor can rules on culture be imposed by regulators.  Good culture - what it looks like, and how to acheive it - needs to be determined by each individual firm based on its own values, people, business strategy, clients and markets.

As such, good culture needs to be at the heart of the way each organisation operates every day. "Clearly regulation is only one piece of the puzzle and the role of the regulator may be limited. So the question remains - how can firms go beyond rules and standards to achieve real cultural change?" (Transforming Culture in Financial Services, FCA, March 2018).

As our analysis shows, the picture beyond financial services is not dissimilar, with poor culture and conduct invariably being at the heart of scandals impacting entire sectors. The examples we have chosen are not unique, and they serve to illustrate that failing cultures - often driven by the need to win at all cost, a lack of clarity around expected behaviours, a leadership team which does not actively role model those behaviours, and an environment where employees do not feel free to speak up without fear of repercussion. Such cultures consistently contribute to events that cause significant reputational damage and overall loss of confidence to the organisation, and in some cases, to the entire industry.

Having a clear organisational purpose bolstered by a set of core values and supported by consistent messaging is just the start - we have helped organisations across different sectors as they tackle similar issues to those described in the attached brochure and have considerable experience designing and implementing large scale culture and conduct change programmes.

* Including the Federal Reserve Bank (FRB), Office of the Comptroller of the Currency (OCC), European Central Bank (ECB), Hong Kong Monetary Authority (HKMA), Australian Securities and Investments Commission (ASIC), Australian Prudential Regulation Authority (APRA), Monetary Authority of Singapore (MAS) and the Reserve Bank of New Zealand (RBNZ).

** Royal Commission review into Misconduct in Banking, Superannuation and Financial Services

Read Culture Case Studies - 7 Common Themes