Our code of conduct
Positive stakeholder relationships – supported by strong governance and a sound risk culture – play a key role in our company's long-term success, which is why stakeholders are increasingly interested in how companies manage their conduct and culture.
Ethics and business conduct
We provide clear guidance to all our employees on our expectations of ethics and business conduct. We have also put in place risk controls to encourage a culture that values integrity and reduces the risk of adverse employee behaviour.
As a demonstration of our commitment to set and embed the highest ethical standards, in May 2016 the BOQ Executive Committee took the Banking and Finance Oath. Since then, our Managing Director and Chief Executive Officer has driven our company-wide commitment to the principles set out in the oath, and has encouraged everyone across the Group to participate.
Our Code of Conduct underpins our values and sets out the principles and conduct expected of those working for and with us. It details our expectations regarding ethical standards, professionalism, compliance with laws, conflicts of interest, confidentiality, health and safety and good corporate citizenship.
We have a range of policies, standards, frameworks and procedures in place that enforce good business conduct practices in areas such as product development, marketing and sales, consumer protection, financial hardship assistance, handling complaints, code of banking practice, conflicts of interest, risk monitoring and supervision, compliance, whistleblowing, anti-money laundering and how we interact with one another. All employees complete training relevant to their roles as part of their induction and complete refresher training regularly. We monitor and enforce compliance with our policies to ensure employees uphold the required standards of professionalism and behaviour.
We believe that by incentivising our people appropriately we support and motivate them to do the right thing. Our Human Resources and Remuneration Committee, along with the Board, ensures our remuneration policies and practices are appropriate. Our employment contracts state that, for employees to receive an incentive, they must comply with our Code of Conduct. Our Owner Managers also operate under a balanced scorecard, which links remuneration to customer, compliance and integrity outcomes.
Throughout the 2016 and 2017 financial years, we conducted ethics and integrity training, working with The Ethics Centre to develop a full day, face-to-face, interactive and bespoke BOQ Ethics Training and Education Program. The program also delivered training in conflicts of interest and demonstrating ethical leadership. Developing our own program meant we could specifically tailor it to our unique Owner Manager model. The program was mandatory for our top leaders and Owner Managers. In our 2017 financial year this program was developed into a mandatory online training module for all employees.
Given the importance of ethics, we also have an Ethics and Security Committee responsible for oversight of and guidance on ethics. This committee is comprised of executives and meets monthly to make decisions and analyse trends to proactively manage risks. The Committee considers matters, assigns ownership of risks and makes recommendations to the broader Executive Committee and the Board Risk Committee. We also have a team that investigates whistleblower and misconduct cases, and an anonymous whistleblower phone line managed through an independent external firm that provides a safe and transparent environment in which employees can raise concerns. We implemented the Australian Bankers' Association's Guiding Principles – Improving Protections for Whistleblowers to help ensure our whistleblower policies meet the highest standard. We have also contributed to the industry submission to the Parliamentary Joint Commission on Corporates and Financial Services inquiry into whistleblower protections in the corporate, public and not-for-profit sectors. Our number of whistleblowing reports is disclosed in our non-financial performance table.
We undertake an annual risk survey with all employees to benchmark our attitudes towards risk and governance against those of our peers, and we include risk culture questions in our annual staff engagement survey. This information helps us understand our risk culture and improve our governance.
To increase our oversight of conduct risk in the organisation, in our 2017 financial year we:
- introduced a new conduct risk framework that benchmarked our conduct risk against that of our peers
- developed risk culture dashboards to regularly monitor a number of data points
- introduced divisional operational risk committees to improve risk engagement, management and oversight.
Our ethics and business conduct is directed and overseen by our management and Board who are responsible for ensuring the BOQ Group observes appropriate ethical standards. Our management and Board also set, communicate and enforce a risk culture that aligns with our strategic objectives. Any issues or potential issues are reviewed by the Board Risk Committee which has oversight of operational and compliance risk. The Board has identified compliance risk, operational risk, conduct risk and reputation risk as material business risks (see page 18 of our 2017 Corporate Governance Statement which is available on the Corporate Governance page of our website). You can also find out more about how we're supporting strong governance practices on our governance sustainability webpage.
Ethical business conduct is not just about having the right risk controls – it's also about having a culture that values and understands ethics and risks. We are confident we are making progress to create this culture.
Even with the best strategy in the world, companies need the right culture to reach their full potential. A multitude of research shows companies with positive cultures significantly outperform otherwise similar companies. Positive culture lifts engagement, customer satisfaction, productivity and ultimately revenue and share price. When the culture's right, everyone benefits.
Two years ago we introduced a refreshed strategy to refine our focus on building close relationships in niche customer segments that value a more intimate banking relationship. This brought with it a renewed focus on continuing to build the ideal culture to support our strategic direction, and one which aligns with the best interests of our customers, employees and shareholders.
This led to the launch of our 144 culture in our 2016 financial year to align employees around 1 vision ‘to be Australia's most loved bank', 4 strategic pillars ‘customer in charge, grow the right way, there's always a better way and loved like no other', and our 4 values of ‘integrity, collaboration, impact and passion'. This is what our values mean to us:
- Integrity – doing the right thing
- Collaboration – working together to deliver results
- Impact – continuously raising the bar for BOQ and our customers
- Passion – loving our customers and what we do.
These values were developed in consultation with employees through culture workshops and focus groups, and represent the true behaviours and beliefs our people live by. Our values underpin everything we do including recruitment, induction, training, management, development and recognition.
Embedding our values has driven from the top. Numerous initiatives are underway including regular Managing Director and Chief Executive Officer (MD and CEO) culture shares to identify teams and individuals demonstrating the values, and quarterly recognition by the MD and CEO of people who live the values.
We've spent a lot of time considering the signs, symbols and stories we have to support and demonstrate our values. For example, we've elevated the symbols we have for our integrity value through the company's commitment to the Banking and Finance Oath, led by our Executive Committee. People who have taken the Banking and Finance Oath proudly display it on emails they send.
As outlined above, we've also introduced processes to foster ethical business conduct so we're providing an environment in which integrity can flourish.
In our 2017 financial year we heightened our focus on creating a culture that supports our business objectives and enhances the resilience of our employees. We've undertaken a culture diagnostic to develop a roadmap to our desired future culture that aligns with our strategy. We've done more work to inspire our people to live our values by running team workshops in which we encouraged people to think about how they demonstrate the values in their daily work, and we've included the values in our performance review process. We empowered managers across the organisation to continuously improve culture by launching Teamgage, a monthly team-based online culture measurement tool. The results now form part of regular team discussions.
In the year ahead we'll continue to transform our culture through leadership. Senior leaders will take part in a leadership development program with a new competency framework and personalised development pathways. We'll measure how well we're living the values across the organisation and use this information to deliver better systems and processes to create a culture underpinned by values.