Industry off the pace on cultural change: APRA 01 June 2015 4:11PM Ian Rogers Banks have more work to do to align personal incentives with organisational interests, the head of APRA, Wayne Byres, cautioned in a speech in Singapore on Friday."We still have room to make serious improvement in the interrelated areas of governance, culture and remuneration," Byres said."Culture is a nebulous concept, much more difficult to define and observe than capital adequacy. But strengthening culture, like strengthening capital, is critical to long-run stability. "We regularly see instances where participants in financial markets, when faced with an ethical dilemma, fail to ask themselves 'is this right?' "Instead, the question has often been 'can I get away with this?' - or, more ominously, in some cases it appears no question was asked because the attitude was 'if you ain't cheating, you ain't trying'. "For an industry that is ultimately founded on trust, something serious is amiss, and strong and ethical leadership within financial firms is needed to set this right. "Much has to do with the incentives that individuals face and how they signal what an organisation truly values (and what it does not). It is clear that, in many cases, aspirational statements of organisational culture have been no match for the personal incentives that are created for individuals."Much of the post-crisis reform agenda has been aimed at getting the organisational interests of financial firms more aligned with those of the wider community. "Getting personal incentives correspondingly aligned with organisational interests needs to be seen as equally important. On this, we all have more to do," he concluded.