Conduct, Corruption and Accountability
“Leadership that allows for mediocrity to first exist and then remain, rather than demand the highest level of conduct, can create a climate ripe for misconduct”. Anon
The past few weeks have delivered many news stories which have most people aghast, outraged and bewildered. From the Financial Services Royal Commission to the Ipswich City Council corruption charges, each tells a story of organisations that were believed to be run well, with the right governance in place, and operating effectively.
However these organisations failed in many ways, the core of which involves conduct and culture. There is a further message in the articles about the power of stakeholder voices in holding organisations to account including the recent issues at Melbourne’s Trinity Grammar. Let’s look at some of the recent headlines:
CBA secrecy over possible customer data breach criticised (Australian Financial Review 4 May 2018)
CBA beaten up by culture cops (Australian Financial Review 4 May 2018)
Lawyer demand at ‘generational high’ (Australian Financial Review 4 May 2018)
Banking commission needs more time to get to the rotten core (Sydney Morning Herald 2 May 2018)
AMP had a hand in changing ‘independent’ report (Sydney Morning Herald 4 May 2018)
AMP scandal shows the cover-up is often worse than the crime (ABC Online 29 Apr 2018)
AMP chairman Catherine Brenner steps down after royal commission revelations (ABC Online 30 Apr 2018)
CBA class action: Giant US pension funds to sue Commonwealth Bank over Austrac scandal (Herald Sun 9 Apr 2018)
Queensland to sack entire scandal-plagued Ipswich council after fraud charges (The Guardian 3 May 2018)
‘It turns out that warnings appear accurate’: LNP fronts Premier on Ipswich (Sydney Morning Herald 3 May 2018)
How a haircut on school photo day revealed the power of parents (Sydney Morning Herald 18 Apr 2018)
Council members resign over sacking principal who gave student haircut (9news.com.au 14 Mar 2018)
Trinity Grammar deputy headmaster Rohan Brown returns to work after sacking for cutting boy’s hair (ABC Online 17 Apr 2018)
Now let’s do a comparison of a handful of the headlines we have seen regarding the Presbyterian and Methodist School’s Association (PMSA) and see if we can identify any similar themes:
Parents demand clarity as school scandal grows (Courier Mail 15 Oct 2017)
Somerville House donors warned of data breach (Brisbane Times 15 Sep 2017)
Fresh evidence of covert meeting in nude spa by key figures of church body in charge of four elite Queensland schools (Courier Mail 12 Oct 2017)
PMSA elite schools scandal: Crime and Corruption commission looking into misconduct claims as angry parents seek to fight back (Courier Mail 24 Oct 2017)
Queensland elite schools scandal: New agencies investigate PMSA (Courier Mail 1 Dec 2017)
PMSA scandal: Fears an audit by retired Court of Appeal Judge Richard Chesterman will never be released (Courier Mail 9 Feb 2018)
Judge says church-school body must change (Courier Mail 28 Apr 2018)
Opinion: Time for private schools’ management to be returned to the Churches and school councils (Courier Mail 23 Nov 2017)
PMSA schools scandal: Parents withdraw students over church body’s ‘deplorable’ treatment (Courier Mail 11 Nov 2017)
PMSA schools scandal: Town hall meeting’s no-confidence vote (Courier Mail 2 Nov 2017)
Scandal erupts over secret merger plan (The Australian 23 Oct 2017)
Elite school Clayfield College in shock debt crisis (Courier Mail 13 Feb 2018)
The themes which are consistent throughout the Royal Commission, Ipswich Council and Trinity Grammar matters with the PMSA are:
Secrecy over data breaches
Poor culture
Increased demand for legal services
Actual or perceived cover ups
Crime and Corruption Commission and other regulators investigating
Stakeholder voices need to be heard
There is also a stark difference in one key area: accountability. In the case of CBA, AMP and Trinity Grammar senior figures have resigned for the good of the organisation. They have accepted their role including being responsible for the overall governance, culture and conduct of the organisation, above what that meant for them personally.
The Royal Commission still has a long way to go to understand the full extent of the issues and make recommendations. Having said that, there are already a number of improvements any organisation could determine simply by reading the paper each day. What is of grave concern to me is that if the largest organisations, who have very robust risk and governance frameworks and systems in place, have failed to such an extent that, in the case of CBA, they have to hold an extra $1 billion in regulatory capital how bad are things really at the PMSA? We know they absolutely refuse to release each schools financial reports and despite other schools doing so, they provide a consistent rhetoric about not being required to or it being commercially sensitive.
What can be done?
There are a lot of simple things that could have been done a long time ago and still could and should be performed today starting with publicly taking responsibility for their actions, making appropriate apologies and the standing down of the PMSA Councillors who were in place during 2017.
The next part is to be transparent. Remove the veil of secrecy and stop hiding behind archaic legal documents, the minimum standards required by regulators and the spin of commercial in confidence. With regulators now likely to be a fair way through their investigations we have to wonder when, rather than if, someone else will step in just as the Queensland Government has done with the Ipswich City Council. The lesson here in each of the institutions mentioned is that each had an opportunity to take accountability and resolve this. The one that has done that the most effectively is Trinity Grammar; their past students and parents were not told they are “customers with choice”.
