Where is management in an Australian finance crisis?

Responses to financial crises in Australia include bolstered compliance measures, the development of a Banking and Finance Oath, media shaming, legal and financial investigations, parliamentary inquiries, and a Royal Commission into Misconduct in the Banking, Superannuation and Finance Services Industry (Commission) (Banking Finance Oath, 2019; Campbell, 1981; Hayne, 2019; Murray, 2014). Since Australia’s first reported financial crisis in 1893 the question of ethical conduct in finance has generated commentary from legal and financial experts (Hickson & Turner, 2002). In most instances, they state finance organisations have inherent cultural issues (Hayne, 2019; Hooper, 2019). None of the legal and finance compliance measures have resolved the cultural issues that lead to the crises. A missing piece in this commentary is the management discipline, which has researchers that specialise in complex organisational culture (OC) who can meaningfully comment on addressing long-standing cultural issues.

The question of where was the management discipline voice in a finance crisis was asked in America and Europe during the 2008 global financial crisis (GFC) (Galbraith, 2014; Wolf, 2014); yet, it has not been asked in Australia. Unlike other countries, Australia did not encounter a deep recession during the GFC which led to external reviewers stating financial practitioners have an overconfidence in their acumen (Laker et al., 2018). This overconfidence was demonstrated in the Commission hearings where finance directors did not believe they needed to address questions placed before them (Burns, 2019). One director stating, “I’ve answered the question the way I choose to answer the question” (Transcript of Proceedings, 27 November, 2018, p. 7166)