Pauline Vamos - CEO, Regnan

With a solid career garnered in regulation and policy-making, Regnan CEO Pauline Vamos speaks to AB+F about her industry experiences and a “slow burn” issue she is passionate about. Christine St Anne reports.

In March, Vamos gave a keynote speech to the fourth annual Australian Young Finance Professional Awards. The twenty-five-year veteran of the industry provided some salient advice (see pull-out box) to the audience of emerging leaders. She encouraged the young audience to take risks and that they must learn from their failures. Lastly but most importantly, Vamos called on the young bankers to have and use their moral compass.

Know what is right and do what is right.” Amid a royal commission, she added that many people in the sector have lost their moral compass over the past 20 years and urged the audience to take the Banking and Finance Oath (BFO) and follow it.

"It’s not just short-term financial risks but it is also about creating a world where their members will retire in a world that is better than today."

As a former commissioner of ASIC and CEO of the Association of Superannuation Funds of Australia, Vamos has worked through some significant regulatory changes in the industry. Despite the introduction of some big reforms such as Future
of Financial Advice reforms, today’s financial services are still plagued by a crisis in consumer trust which has now culminated in a royal commission. It is expected that more issues will emerge around conduct as the commission’s inquiry continues to play out through the year. As the board member of the BFO, Vamos believes conduct in the industry is underpinned by individual behaviour and accountability. Compliance around codes of practice is not about ‘ticking boxes’ rather it is about individual responsibility and action.

The BFO was set up seven years ago, just after the global financial crisis. The Oath essentially provides people working in the banking and finance industry with the ability to apply as to personal principles in their work.

The Oath, however, neither binds nor represents the views of those who employ the signatories - Board members include former APRA chair John Laker and former ANZ Australia CEO Phil Chronican.

"We thought at the time that the industry would realise that individuals also had the reasons lift to drive ethical and compliant behaviour."

Said Vamos: “We thought at the time that the industry would realise that individuals also had the reasons lift to drive ethical and compliant behaviour.”

The power of one

Indeed, one of the first signatories, former RBA Governor Glen Stevens said the value of the Oath is that it provides people to own and exemplify a set of values at an individual level and if they don’t they are willing to be called out. It is also about joining a cohort of people who are driving a code of conduct in the industry, However, the message of individual accountability is yet to resonate with the workforce in financial services. Vamos describes the process as a “slow burn”. “While we have had some fantastic support, there has not been a high take up. We have over one hundred thousand people employed in the industry but less than two thousand have signed up to the Oath.” Perhaps the reluctance comes down to the broader challenges around the “grey areas” around ethics.

While regulatory compliance is more clear-cut, Vamos recognises that ethical concerns are based on more of a “gut feeling”. It’s also a very difficult thing to do as illustrated by many current examples of whistleblowers who have spoken out on unethical practices in banking. However, organisations should realise that they could avoid regulatory breaches if their employees are empowered to make these calls.

"Calling out unethical behaviour is the hardest thing to do. Ethics can be a grey area and you often have to call out this behaviour before a breach occurs."

“Calling out unethical behaviour is the hardest thing to do. Ethics can be a grey area and you often have to call out this behaviour before a breach occurs.” The AB+F interview with Vamos was at the time that three professional Australian cricketers were caught out for cheating over ball tampering. It brought the focus on wider conduct issues across all spectrums of society but for Vamos the approach by the former captain of the Australian cricket team, Steve Smith who publicly fronted a press conference admitting to his mistakes should set a standard for financial services.

“It was a good call for Smith to make. He has fallen on his sword and has accepted the punishment for his behaviour. The way he and Cricket Australia responded should provide a great case study on how financial services should response
to unethical behaviour.”

Importantly, Vamos highlights that the public reaction to the cricketing scandal further underscores how ethics is now very much in tune with community expectations.

Vamos, however, shies away from taking a mandated approach to the signing of the Oath. In terms of making the oath more “visible”, she is in talks with the Australian Bankers’ Association and the not-for-profit group is hoping that the Oath could be a preamble to the industry’s re-written Banking Code of Practice – mandatory for all members of the ABA. FINSIA has also integrated the Oath into is accreditation programs.

"It was a good call for Smith to make. He has fallen on his sword and has accepted the punishment for his behaviour."

Of course, conduct and a strong ethical framework also go beyond individual responsibility and Vamos sees the boards of banks also playing a role in promoting the principles within Oath by putting the customer at the centre of their strategy and ensuring mandatory governance requirements.

She would also like to see the Royal Commission act on some of the recommendations from the “really good work” of previous inquiries including the Murray Financial System Inquiry and the Cooper Review particularly around their approach to the regulatory framework.

A better world

“There are still some regulatory gaps and it’s good that there is a current focus on areas like payday lending and broking. There is certainly a need to lift the lid on some of the practices in those two areas,” Vamos said. She would also like the industry to focus on emerging issues like elder abuse - a topic of growing concern with community groups but still not on the radar for financial services adding that “it would be great that as an industry we could do something about this issue.”

For the former ASFA chief, today’s world continues to remain complicated and therefore no one in the sector can afford to have a “single lens” around ethics and governance”.

In her other role as CEO of Regnan, Vamos is involved in leading institutional investors to engage with corporates around how they are managing governance risks. Here it is about working with these businesses to deliver on positive outcomes.

“The average super fund invests in the big four banks. It is hard to divest out of them, but these investors can play an active part in effective stewardship.”

"It’s not just short-term financial risks but it is also about creating a world where their members will retire in a world that is better than today."

“It’s not just short-term financial risks but it is also about creating a world where their members will retire in a world that is better than today.”

Vamos is certainly helping the next generation of leaders to create this “better world.”

Following her uplifting speech on the night of the awards, many of the young bankers had decided to take on the Oath, knowing that trust in banking does start with them. All the young bankers awarded had revealed to AB+F the importance of individual responsibility. Mark Sawyer, who won the Young Professional of the Year award, said that trust is something that needs to be rebuilt in the industry.

From a leadership perspective, I recognise the need to challenge the established norms within the industry and lead on conduct.

Vamos’ 9-point plan on leadership

1. Find your noble cause
Take time to assess what rocks your world, think of your legacy and apply your noble cause to broaden career opportunities.

2. Take career risks
This is the only way you will grow and learn – get used to rebounding from failure. Run your own business at some time so you can test yourself. Step out and put yourself out there.

3. Remember it’s a small world
Your poor conduct will come back to bite to you – the world is small and people remember. The person across the table could be your boss or prospective boss one day. Seek feedback on your behaviour – get a personal coach.

4. Learn how to sell
Take a course on selling and human behaviour. Remember there is dignity in a win/win an ethical sale.

5. Don’t wait to have full confidence in yourself
There will always be someone better and more successful so don’t beat yourself up – just be the best you can be. If you make a mistake, fall on your sword, learn from it and move on.

6Be part of something and give back
Join an association and volunteer your time. Become accredited or gain a certification. Lead an initiative within or outside your workplace.

7. Know what is important to you
Know what comes first in your life at a given time. Focus on the important issues not necessarily the issue of the day or the hour. Verbalise why you think a certain way – sharing gives others context. 

8. Mind the Gap
Seek the facts first then form an opinion – but be open to change your mind if other facts emerge. There will be blind spots and gaps in what you see and understand – recognise this. Don’t necessarily think the crowd is right - Listen to your gut and
your heart.


9. Have a strong moral compass
Know what right and do what is right. Just because it is legal it does not mean it is ethical. Take the Banking and Finance Oath and follow it.


Pauline Vamos is speaking at Australian Retail Banking Summit in June 2018. To get more information, please feel free to visit the event website.

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