Royal commission: Culture and dishonesty

  • What is the influence of law on culture?
  • Directors and senior executives must put in a serious effort to understand the culture of their organisation.
  • Legislative change to the financial services provisions of the Corporations Act have introduced a new test that applies to all dishonesty offences.

Culture, fairness and dishonesty are concepts that have become a recent focus demanding the attention of company directors. But what is the influence of law on the nature of culture?  Can legal framework provide guidance for directors?

Recent commentary on the underlying causes of numerous corporate scandals has focused on culture as a governance tool, difficult though it is to specifically identify culture in a manner that avoids platitudes. Nevertheless, an urgent search for explanations and solutions becomes even more necessary when companies, and the people who work within them, systemically act in a way that breaches normative values, or worse act criminally.

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