Sustainability, as one of six (economic, ethical, social, stakeholder, sustainability, and discretionary) dimensions of corporate social responsibility (CSR) is frequently espoused in large finance organisations’ corporate reports. BSI researchers Clare Burns, Dr Luke Houghton, and Dr Heather Stewart from the Department of Business Strategy and Innovation investigated finance board directors in the lead-up to the Royal Commission into Misconduct in the Banking, Superannuation, and Financial Services Industry (Commission).
Indeed, the Commission referred to the culture of the industry as “dishonest and greedy.” Our investigation found sustainability assumptions were not a day-to-day consideration for the majority of directors. Directors’ primary assumptions, their values-in-use, were finance first, followed by risk and defence. Finance, in terms of short-term profitability, was considered before all espoused values such as customer centricity, integrity, trustworthiness, and professionalism.
Within the study there were a small number of directors who did prioritise sustainability, which they closely integrated with the economic (finance) dimension. The additional prioritisation of sustainability led to better integration of the other CSR dimensions and a reduced difference between what is said (espoused) and done. While other CSR and finance studies have focused on “how much,” this study provides unique insights into the “why” of the finance industry’s values-in-use preceding the 2019 Commission which exposed some of the “what” and “when” of director behaviour.
Further findings from the case study are available in the March 2020 Journal of Corporate Social Responsibility and Environment Management.