HR Strategy in a post financial services royal commission world:
HR Strategy can be as simple or as complex as you have time for, but it’s just become a little more interesting in the post financial services royal commission world. Commissioner Hayne took the view that there will be long term alignment between the interests of shareholders and the interests of the community. Those fans of military history will know that interests don’t always align perfectly and the same can be said for the interests of different stakeholders. I could set a personal strategy to purchase ethically sourced soap or a t-shirt that doesn’t support modern slavery. There a plenty of options available and laws governing the accuracy of the the claims and the packaging. I could also decide to not purchase the t-shirt at all and vote with my feet (I think soap is always a good idea). What happens when I don’t have a choice about the school t-shirt or the soap in a restaurant bathroom. They are still purchased even if they are bad for the environment. These differences can be seen in financial services and by extension the HR strategies of financial services organisations.
Must Have a Bank
Most Australians can’t live their lives without a bank. Love them or hate them, most of us have one, sometimes more. I’m old enough to remember a cash pay-packet - now there’s a sobering thought if ever there was one. The t-shirt produced by child labour is a choice, but the receiving of payment into a bank account, the credit card saved on the pizza delivery app and the loan to buy a car all need a bank account. HR Strategies need to take into account that parts of banking and financial services have become essential services - with the same reliability, customer resolution and skill expectations of our hospitals, schools and public transport system. These organisations are full of professionals qualified and skilled with barriers to entry - radiographers are licensed, teachers must be qualified and I’m pretty sure some is checking the people in driving trains and flying planes know what they are doing. Everyone needs these services so we have standards and controls to make sure they are delivered to community standards. Does your HR strategy link expectations of shareholders to the skills and capabilities of your staff? How do you check they are licensed?
Information Imbalance
The recipe for soap turns out to be pretty straight forward. If I really wanted to you could whip up a batch - olive oil, coconut oil, lavender oil and water. Lye is the only unusual ingredient and Bunnings can help with that. Every tried to make your own homeloan? How about a credit card? No, the Bank of Mum and Dad doesn’t count. HR Strategy needs to have this information imbalance front of mind in the way we design organisations, roles and their performance activities. This is where an organisation starts to meet it’s governance guidelines of “a culture of acting lawfully, ethically and responsibly”. It used to be called social license to operate….but the 4th Edition of the ASX Corporate Guidelines released this week are now putting other stakeholders on equal footing with shareholders. HR Strategies that don’t include the full set of stakeholders will be needing a comprehensive update with a view to managing this information imbalance and society’s expectations from their banks.
SEAT AT THE DIRECTOR TABLE
Senior HR leaders ofter find themselves working shoulder to shoulder with Directors and Senior Executives. The responsibilities and corporate governance frameworks for these individuals are going through significant change. HR Strategy needs to include important knowledge updates for HR teams. It’s no longer good enough to not understand the legal framework we work within or rely on legal and compliance to describe the basics. Go back to the fundamentals of what HR strategy is build competitive advantage in line with three of Commissioner Hayne’s expectations adjusted for Human Resources:
Obey the law - not just employment law, but all laws particularly those that focus on organisational culture - there’s plenty to choose from these days.
Do not mislead or deceive - use evidence based research, anything else is just deceiving yourself and others
Deliver services with reasonable care and skill - do the people in the roles have the qualification and skills to do them well? Have you checked in the same way that the person who drove your public transport this morning checked?
If our strategy cat can do their homework, can you do yours and take a look at your HR Strategy in this post royal commission world. If you aren’t sure how - ask for help. Don’t try and delivery services you don’t have the skills for or you will be misleading yourself and others. If you don't you could be at risk of not obeying the law. For those who have the skills, check for misleading action and know the law - rock on. The new world will be an exciting place.