by Ian Laughlin and Hadyn Bernau
In this paper authors, Ian Laughlin (Advisory Board Chairman of Blackhall and Pearl and former Deputy Chair at APRA) and Hadyn Bernau (Principal at Finity Consulting), propose that financial services companies should commission a formal Social Condition Report, to aid boards and management in performing their respective duties.
Key points
- The Hayne Royal Commission showed institutions have failed to understand and manage relationships with society and their associated social risks.
- This has resulted in great reputational damage and loss of social capital for those institutions.
- ‘Social condition’ is as important as ‘financial condition’ to the success and sustainability of an institution.
- The authors propose an annual Social Condition Report (SCR), in concept like the Financial Condition Report mandated by APRA.
- Boards, management and regulators would benefit from the Social Condition Report.
- The authors have written a mock SCR for a hypothetical major Australian bank.