“Because They Could”: trust, integrity, and purpose in the regulation of corporate governance in the aftermath of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry

In an era of declining levels of public trust, royal commissions retain symbolic and actual power to provide potential reassurance. The handing down of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry in February 2019 marks a defining moment. It offers, for the first time, a coherent and cohesive normative framework that integrates law, morality and public expectations. In so doing, it invigorates debate on corporate purpose and duty to the society in which it operates. It also provides mechanisms to ensure more effective pathways towards binding sanction. The report, however, suffers from a significant flaw. It presents identified failures in governance in mechanistic terms as independent and episodic rather than a systemic question of sub-optimal culture. The behaviours in the sector reflect the wider inculcation of social norms within and beyond specific communities of practice. In so doing, the report undermines rather than strengthens the power of administrative agencies to guide industry as a whole towards socially beneficial outcomes. Change will only come from a broader exercise in deliberative governance in which cultural renewal is determined, endorsed, and lived.