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The royal commission has shone a fierce light on what appears to be far more pervasive and more egregious misconduct, although the parallels between cricket and the financial services sector may go deeper than the scope of the Ethics Centre’s review allowed it to probe.
It did, however, put cricket’s plight into that wider context when referring to the response of the community to the events in South Africa.
That response, it said, was linked to a sense of ‘’shame that our society’s ethical malaise had moved from politics, to business, to the churches … and ever-spreading stain that had finally tainted the wearers of the hallowed baggy green”.
When royal commissioner Kenneth Hayne produced his interim report detailing the shocking instances of misconduct aired before him, he blamed the breakdowns in culture and governance within financial services largely on remuneration practices and policies.
The core conclusion of the APRA panel that inquired into CBA’s governance and culture was somewhat different. It concluded that the bank’s financial success had ‘’dulled the senses of the institution’’.
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It is generally the case that ‘’what gets measured gets done’’ and also that success breeds complacency.
What’s measured and rewarded in cricket, as in all sports, is wins and losses – successes or failures.
At a board and management level, there’s another dimension. After the Crawford and Carter review of CA’s governance in 2011 the board adopted corporate ‘’best practice’’ governance principles and structures in a recognition that elite cricket had become a big business.
With the contemporaneous Argus review of the male team’s performance success — wins and dollars without any ethical filters — appears to have been the singular lens through which CA judged itself and rewarded its executives and players.
The Ethics Centre came up with an interesting description of CA’s culture, one that could perhaps be relevant to the misconduct that occurred within the financial services sector and elsewhere.
Rather than the ‘’win at all cost’’ culture that many blame for the behaviour of the Australian team the centre said that winning was pursued ‘’as a perfectly reasonable objective without counting the cost”.
The administrators either didn’t recognise there was a cost to on-field misconduct or completely discounted its significance.
Within financial services, misconduct, accompanied by a slap on the wrist from the regulators and some modest financial penalties, appears to have been regarded as an intrinsic aspect of businesses whose success were viewed predominantly by the size of their bottom lines.
In cricket and business, success is measured and rewarded at both the individual and organisational level. At a commercial level, CA has been extremely successful and the administrators and elite players have been handsomely rewarded.
Cricket Australia chairman David Peever last week joined the long line of directors and executives to lose their positions in response to their organisations’ ethical breakdowns.Credit:AAP
As Justice Hayne has said, when an employee and others in an organisation, including the employee’s supervisors and peers, are remunerated according to how much revenue or profit they contribute then sales, or revenue or profit – or, for cricketers, winning – is treated as the goal to pursue and how it is pursued is less relevant.
The APRA-commissioned review into CBA said the focus on financial outcomes and the siloed nature of its structure, where executives were given considerable authority, allowed them and the board to believe the group was well run and across potential risks.
It would seem the CA board and management’s senses were dulled by the organisation’s financial success and by the distance and layers between them and the team.
Incentives structures are easy to change; changing cultures is not as straightforward.
In financial services there are ‘’balanced scorecards,’’ increasingly with conduct ‘’gateways’’ to be negotiated before the incentives can be triggered.
If, as the Ethics Centre concluded, a singular focus on performance produced, not surprisingly, a singular focus on performance then the response for CA is to develop its own version of a balanced scorecard, for management and players; one with an ethical dimension to it.
It is also going to have to consider how it might generate cultural change, not just at the elite level, but down to the grbadroot levels and the pathways within which its elite players originate.
The federated nature of cricket — the complex relationships between its head office and the states — means it won’t be as straightforward as the board and/or executive laying down a new cultural framework. CA might, however, learn something from the ways in which the major banks and AMP are responding to their ethical breakdowns.
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