Latest news with #regulators
The Australian
18 hours ago
- Business
- The Australian
Building an ethical culture: Leadership's role in corporate integrity
Much of the time, a single moment or lapse in judgment does not precipitate a crisis. Instead, corporate scandals tend to spring from systemic failures in corporate culture, specifically around ethics. However, within many organisations, ethics are often discussed in theoretical terms — lofty yet nebulous aspirations or nice-to-haves. This opaque approach to principled behaviour belies the clear consequences of its absence: diminished stock prices, dinged reputations, scrutiny from regulators, and in extreme cases, criminal judgments. Given its potential for harm, organisations may not be giving ethical risk the attention it deserves, particularly from the top down. In a 2024 survey from the Society for Corporate Governance and Deloitte, 48 per cent of respondents reported that their boards of directors provide no dedicated oversight of corporate culture. Of those that do watch culture, many monitor whistleblower complaints or hotline reports, meaning they might step in after an ethics issue has already emerged. Only about one-third of the subset are more proactive, whether analysing employee surveys around ethics programs or benchmarking their organisation's ethics efforts against their peers. The prevalence of social media and the rapid adoption of AI, particularly generative AI, exacerbates ethical risk, since harm from a lapse can hit harder and spread faster than ever. It is no longer enough to respond wisely to an adverse event. Organisations need to be proactive, sense risks before they emerge, and move quickly to head off potential crises. The capabilities needed to effect and enforce ethical behaviour cannot be developed overnight; they must be modelled by leaders and embedded into the fabric of the organisation. Instilling an Ethical Culture Employees make many choices every day that have ripple effects. Whether they respond ethically when pressured to achieve a sales goal, satisfy an unhappy customer, or meet investor expectations largely depends upon how tightly ethics are woven into the broader corporate culture and cascaded throughout the organisation. In ethical leadership, the CEO —perhaps with board input — sets the tone. The rest of the C-suite amplifies it. Then business unit leaders, supervisors, and managers instil it in employees. The result: an ethical culture. To help build an ethical culture, leaders can adopt practices in four primary areas: Ethics Expression. Ethical standards should be communicated clearly, along with what is expected of employees. Messaging should express how the organisation upholds its values and how it will respond when rules are broken. Set from the top down, the tone should foster an environment where ethical behaviour is the norm and unethical actions are discouraged. Cadence matters, too. Consistent and frequent messaging not only aids retention but also demonstrates the organisation's commitment to prioritising integrity. Executives, starting with the CEO, should lead the way in communicating that integrity matters above all else and it is everyone's responsibility. Messaging vehicles may include all-hands meetings, town halls, and enterprise-wide announcements as well as more targeted discussions and presentations. Ethics Engagement. Employees need to understand the implications of their actions, how to navigate complex situations, and how to make choices that are in the best interest of the organisation and its stakeholders. They also need to understand how to comply with laws and regulations. This comprehension is rarely innate. Training programs and learning opportunities should be made available at all levels. Leaders should set expectations immediately with new hires and reinforce them periodically. Workers being promoted or transferred to new business units may need additional development. Training should cover realistic ethical dilemmas, bringing timely and relevant scenarios to life while also highlighting emerging risks. Learning can be reinforced by incorporating ethical considerations into project design, implementation, and debriefs. Ethics Empowerment. It is not enough to centre on the code of conduct to instil confidence in employees to speak up. Employees need an environment in which they can report violations and get help with ethical dilemmas without fear of retaliation. Organisations should establish multiple safe channels for surfacing concerns so they can be addressed early. These channels may include speaking with a supervisor, manager, or other leader; consulting with HR or talent functions, or ethics team members; or calling a helpline that allows for anonymous reporting. Offering multiple options makes it easier for people to find the approach that is most comfortable for them and most appropriate for the situation. Ethics Evaluation. The ethics landscape is constantly changing. To keep pace, organisations should periodically assess their ethics programs to identify trends, evaluate new risks, and make sure the messaging still resonates. Assessment activities may include interviewing stakeholders, conducting internal focus groups, and benchmarking ethics initiatives with leading practices. Formalising leadership performance goals can also help to gauge program effectiveness and promote positive outcomes. Holding leaders accountable for communicating and modelling ethical behaviour engenders trust and influences the tone at the top, which feeds back into ethics expression. Also, the CEO and other leaders may wish to recognise employees who have taken personal risks to uphold the organisation's values and consider ways to reward ethical behaviour by embedding it into performance criteria. Sending the Right Signals When pressed, employees often reach for what feels familiar — for what has been modelled and normalised. What have employees observed about how their peers, managers, and leaders handle conflicts or ethical dilemmas: Are there negative consequences for delays or extra expenses in the name of safety, or are those actions accepted, even applauded? Are suggestions for cutting corners indulged, or is there zero tolerance? Do people massage reports to meet targets, or do they report transparently, look for root causes, and find ways to improve? Such cues guide decisions. Strong ethical leadership can help the organisation send the right signals. By creating a value-centred culture, leaders can help equip the organisation to head off ethical breaches before they happen and to respond swiftly and effectively — and yes, ethically — when they do. Lori Pressler is chief ethics officer, and Michael Rossen and Miira Velia, are both managing directors, all with the US Ethics Office, Deloitte LLP. As published by the Deloitte US Chief Financial Officer Program in the 30 April 2025 edition of The CFO Journal in WSJ. Disclaimer This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional adviser. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication. About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ('DTTL'), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as 'Deloitte Global') does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the 'Deloitte' name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see to learn more about our global network of member firms. Copyright © 2025 Deloitte Development LLC. All rights reserved.
ABC News
20 hours ago
- Business
- ABC News
Australians give super funds a social licence to operate. Does HESTA's outage threaten that?
Consider this — you try to log into your bank account to move some money around to pay a bill. When you go to log in, you can't. You really need that cash. There's a message at the top of the website — your bank is upgrading its system. You won't be able to log in to your account for seven weeks. You can't withdraw any of your money, other than in exceptional circumstances. Of course, this isn't a real story of a major Australian bank. That would be ridiculous, right? Surely no-one would accept their bank going offline for nearly two months, even if it was with the promise of a better experience for customers on the other side. And presumably the regulators would have something to say. But it's not an entirely hypothetical scenario — one of Australia's major superannuation funds has just restored services, after being offline since mid-April. More than 1 million HESTA members have endured a seven-week long "limited services period" that left them locked out of their accounts until the start of June. The HESTA website bore messages alerting customers, noting that members should contact the fund if urgent payments were required. The reason for the outage was for the fund to switch administration providers, which it said would bring "the opportunity to develop more personalised experiences for members, making it easier for them to manage their super". Consumer advocacy group Super Consumers Australia slammed the length and extent of the outage, arguing it reflected "a real underinvestment in services" and "a lack of strategic vision". With the decision made and the switch underway, all HESTA could do was try to minimise the pain. On Monday afternoon, after normal service was scheduled to have resumed, the fund's website indicated it was receiving a high volume of calls and apologised for inconveniencing customers. When bank customers are mistreated or disrupted, whether it be by poor conduct or technical failure, the banking sector is reminded — by everyone from the media and politicians to consumer groups and outraged customers on social media — of its social licence to operate. That is, the unspoken understanding between the financial institutions and the public, that banks shouldn't just be money-making machines, that there is also an obligation to do right by their stakeholders. Most importantly, their customers. It's a licence that extends to super funds — and it's implicit in the structure of industry funds that are owned and operated by members, for members. That's on top of the legal requirement for all super fund trustees to act in members' best financial interests. Australian workers don't opt in to super so their interaction with the sector isn't by choice. Self-managed super funds (SMSF) can be complex to set up and operate, and require tailored financial and legal advice, so it's unsurprising that they skew older and towards higher-income earners (85 per cent of SMSF members are over 45). That leaves most Australians (among them, the young, and lower and average income earners) in retail or industry super funds — choosing from a limited range of providers to handle a substantial chunk of their income, in many cases for decades. Australians don't frequently change super funds — a 2018 Productivity Commission report found that, historically, fewer than 10 per cent of members switch funds each year. Like bank accounts, the barriers to switching funds can seem like an administrative nightmare, and the resulting loyalty rewards funds, rather than members. ABC News first reported on the HESTA outage after receiving messages from several concerned members, unable to access their funds. Some had been unaware of the outage until it had already begun. Others had received notification several months prior but then had issues withdrawing cash in advance, despite contacting the fund as HESTA had advised. Our reporter Adelaide Miller has continued to received dozens of messages from members over the last seven weeks, some facing financial stress, including several who were at risk of a property purchase falling over. Each time questions were put to HESTA, customers ended up having their situation resolved — HESTA processed their withdrawals and personal disaster was avoided. The super fund even asked Miller if she could pass on the details of any member that had written into the ABC with concerns — apart from obvious privacy issues, the public broadcaster isn't resourced to, and shouldn't, act as a quasi-customer service team. If HESTA members were finding it easier to get in touch with the ABC than with HESTA, that surely raises a bright red flag. To hark back to the bank example, if your bill was looming and you couldn't withdraw your cash online, the likely first port of call would be to phone your bank. Contacting a news organisation is hardly an efficient or logical way to contact your financial institution — and it's extremely unlikely to have been your first instinct. By the time people contact journalists in these types of situations, they've typically exhausted their options, or believe any other avenue will prove futile. Admittedly, some of the HESTA members had not contacted the super fund first. In response, HESTA drew our attention to the communications on their website, referring to urgent transactions still being available. Some of the members who contacted the ABC didn't know whether their requests would fall into the urgent category, so had instead resorted to contingency plans, like borrowing money from friends or family. Others had tried to contact the fund with no success. Whether the members made the right or wrong calls, one thing is clear — and it isn't HESTA's communications. It's that on top of the inevitable disruption caused by the outage itself, the fund's messaging and customer service failed to both 1) inform all members, and 2) accurately convey what transactions were considered urgent. It's easy for HESTA to, in hindsight, process transactions that had been brought to the media's attention and state that the member would've been assisted all along. Of course, the outcome for the members who did have their withdrawals processed is the best-case scenario — but we'll never know how many stressful situations or financial difficulties were created and not redressed. HESTA also has more than 1 million members. People who are still working and accumulating their super are unlikely to be regularly logging in and checking their accounts. For most people, the outage would've passed without event, or even unnoticed. But the times when people need their money often come with high stakes — a death payout awaited after the loss of a loved one, a large withdrawal needed to complete a major transaction. At the centre of the multiple and varied problems facing super members in recent times lies a central issue — customer service. On first glance, a "credential stuffing" cyber attack, systemic issues with death payouts and insurance claims handling, and a multi-week planned outage don't have a lot in common. But all result in a sub-par experience for members — and all reflect the investment decisions made by the funds. Whether it be multi-factor authentication to better protect customer accounts, beefed-up claims handling training and resourcing, or earlier investment in administration platforms, the solutions all involve putting a focus on how members experience their interactions with their super funds. The corporate regulator has death benefit claims handling particularly in its sights, having taken court action against AustralianSuper, and slammed the industry for poor customer service at an extremely vulnerable times of peoples lives. Australia's superannuation pool is worth nearly $4.2 trillion — the funds are undoubtedly extremely adept at taking and investing members' money. But when it comes helping members to access it, they are falling short. Earlier this year, the Grattan Institute highlighted that many retirees continue to grow their super balances decades after they retire, for fear of outliving their savings. The think tank said Australians are mostly steered towards account-based pensions, and half of those using those pensions draw down their super at the legislated minimum rates. Its modelling found those drawing down at the minimum rate when they retire will leave the equivalent of 65 per cent of their original super balance unspent by the age of 92. It's a sign that the default settings leave a lot of money unused and not enjoyed by retirees. After decades of accumulating income for their retirement, it seems many face barriers to withdrawing their funds — including knowing how much is needed to survive into old age, and overcoming the mental hurdle to confidently spend their super savings. The law puts the onus on super funds to act in the best financial interests of members. Those members should be able to access their funds easily when the time comes.
Zawya
2 days ago
- Business
- Zawya
IATA Middle East
Middle East Market Performance – Year to Date Year to Date demand for Middle East, which compares January to April 2025 with January to April 2024, was up 6% in line with global average. The YTD cargo performance for Middle East reflects some challenges – down 5.3% Middle East passenger numbers will double, reaching 530 million in 2043 Middle East passenger numbers will double, reaching 530 million in 2043 Traffic will grow at an average annual rate of 3.9% over the 2023 – 2043 period MEAN Safety Global Overview: The global accident rate in 2024 was 1.13 per million sectors, up from 1.09 in 2023. That means just over one accident for every million flights. While still below the 5-year average of 1.25, the slight uptick is a reminder that safety progress is not guaranteed—and must be actively defended. MENA saw a positive trend: the all-accident rate dropped from 1.12 in 2023 to 1.08 in 2024. This improvement, although modest, reflects efforts to strengthen oversight, standardize procedures, and invest in safety culture. Continued collaboration between regulators, airlines, and ground operations teams is essential to sustain this momentum Middle East Priorities Two priorities for the Middle East: No country left behind Regulatory harmonization. Aviation in Middle East is not developing evenly Overall, the Middle East is doing well in aviation. But the reality is that the region is not developing evenly. Geopolitical Instability: Ongoing conflicts in Yemen, Syria, Iraq, Israel and Lebanon have resulted in prolonged airspace closures and significant disruption to flight operations. These conditions have weakened aviation infrastructure, eroded investor confidence, and limited access to critical markets. Overflight restrictions, particularly around Iranian and Syrian airspace, have forced airlines to reroute—raising fuel consumption, increasing emissions, and extending flight times. Conflict zones also hinder intra-regional connectivity, slowing economic integration and impeding the mobility of people and goods—especially in countries that would benefit most from enhanced air access. Sanctions limit access to aircraft, parts, and finance—isolating some carriers from the global aviation system and hindering safety and growth. GNSS While aviation has shown remarkable resilience amid political uncertainty, its full potential is unlocked in environments that are stable, peaceful, and open to international engagement. Economic Disparity The region contains some of the world's richest and poorest countries, with stark gaps in aviation capacity and investment. Gulf Cooperation Council (GCC) states (e.g. UAE, Qatar, Saudi Arabia) have built world-class hubs and fleets with strong government backing. In contrast, lower-income countries like Yemen, Lebanon, and Syria face declining infrastructure, underfunded civil aviation authorities, and outdated fleets. A coordinated regional approach is essential to narrow the gap. Regulatory Harmonization is a Priority for the Region No Unified Air Transport Market in the Middle East: There is currently no overarching framework allowing airlines to operate seamlessly across the Middle East. A more coordinated approach could enhance connectivity, efficiency, and economic integration. Fair and Proportionate Consumer Protection Regulations: Smart regulation that follows global best practices and industry standards is essential for aviation to thrive. Ineffective consumer legislation from Europe and the United States should not be imported. Consumer protection regulations must be fair and proportionate. Enhancing Maintenance and Safety Oversight: Differences in national regulations for MRO operations mean that certifications obtained in one country may not be recognized in another. This lack of mutual recognition creates barriers for MRO providers seeking to operate across multiple Middle Eastern countries, leading to inefficiencies and increased costs. Cost-Effective And Timely Investment In Infrastructure Through Smart Regulations: Airport and infrastructure development is guided by diverse economic regulation models. A regionally informed approach could help ensure infrastructure is cost-effective, scalable, and airline-friendly. A regulatory framework that balances ambition with economic sustainability is key. An example is Saudi Arabia's aviation transformation strategy which is driven by growth without overburdening operators. Government Support Essential to Unlock Aviation's Full Potential in Middle East There are varying degrees of prioritization of aviation in the Middle East. A unified and collaborative approach will support in bridging the gap between countries and strengthen the region's role in aviation. Five priority areas to address are: Evolve Towards a More Integrated Air Transport Market: Foster greater regional collaboration on air service agreements to improve connectivity, reduce fragmentation, and enable more flexible route development. Fair and Proportionate Consumer Protection Regulations: Work towards a consistent baseline that follows ICAO principles, global industry best practices and standards of passenger rights across the region—ensuring travelers experience fair, transparent treatment no matter where they fly. Advancing Cost-Effective And Timely Investment In Infrastructure Through Smart Regulations: Promote infrastructure development that is cost-effective, scalable, and aligned with long-term traffic growth—ensuring airports and air navigation services remain accessible and affordable. Enhance Maintenance and Safety Oversight: Encourage mutual recognition of maintenance standards, training, and certifications to ensure consistent safety and support airline efficiency across borders. Support the Reintegration of States Emerging from Sanctions: Create pathways for the safe and structured return of states into the regional aviation system—facilitating access to aircraft, financing, and international standards while prioritizing safety and alignment.
Yahoo
3 days ago
- Business
- Yahoo
‘You are going to panic,' Jamie Dimon tells regulators about what will happen when the bond market cracks
Jamie Dimon, JPMorgan Chase & Co.'s longstanding chief executive, fired off a warning about the bond market on Friday, telling regulators they will 'panic' when it happens. 'You are going to see a crack in the bond market — OK,' Dimon said, speaking at an event organized by the Ronald Reagan Presidential Foundation. 'It is going to happen.' 'You never know what might happen': How do I make sure my son-in-law doesn't get his hands on my daughter's inheritance? Five emerging pillars of stock-market support that should keep investors from rushing the exits My ex-wife said she should have been compensated for working part time during our marriage. Do I owe her? My daughter's boyfriend, a guest in my home, offered to powerwash part of my house — then demanded money S&P 500 scores best May since 1990, but stocks end month with fresh tariff worries 'And I tell this to my regulators — some of who are in this room — I'm telling you this is going to happen. And you are going to panic.' Dimon has been a frequent critic of banking regulations, pointing to 'deep flaws' in the rules in the wake of extreme tumult in the bond market in April. He has singled out proposed changes to banks' supplementary leverage ratio as likely to aid the roughly $29 trillion Treasury market. A sharp bond selloff in April has kept investors on edge and rattled White House officials. President Donald Trump, during peak tumult, said that bond investors were getting 'yippy.' Trump then paused some of his most aggressive tariffs, and stocks rallied powerfully in May. Some investors have been buying the dip on the view that Trump would threaten but not apply those higher levies. That has helped the S&P 500 index SPX get back to nearly where it started the year. Treasury prices, however, remain under pressure, which has driven up yields. Longer-duration 10-year BX:TMUBMUSD10Y and 30-year BX:TMUBMUSD30Y yields were at 4.418% and 4.931%, respectively, on Friday, up about 25 basis points in May, their biggest monthly yield jumps this year, according to Dow Jones Market Data. 'I don't hold the same view as Jamie,' said Tom di Galoma, managing director at Mischler Financial Group, when asked about Dimon's bond-market warning. 'I though the bond market was broken back in April,' di Galoma said, adding that successful Treasury auctions over the past week, including a closely watched 7-year auction, helped reinforce calm in the sector. The Federal Reserve and Treasury also have tools to use if needed, he said, to help manage points of friction and stress in the sector. Treasury Secretary Scott Bessent has been vocal about wanting to see lower 10-year Treasury yields, which could help unthaw the housing market and ease credit conditions. To that end, Bessent said work was being done with U.S. banking regulators on potential changes to the supplementary leverage ratio, and he noted that results could come as soon as this summer. Read: Treasury Secretary Bessent has a plan to bring down long-term yields. But will it work? The Fed purchased trillions of dollars in Treasurys during the 2007-08 global financial crisis and again in 2020, at the start of the pandemic, to reopen credit markets and keep them functioning. The Treasury Department lately has also been repurchasing certain Treasurys that trade less frequently to aid market liquidity. However, bond investors remain anxious that the GOP's massive tax and spending bill could add to the U.S. deficit, which could require more Treasury issuance and keep rates elevated. Trump's chaotic approach to tariffs, with U.S. courts now also in the mix, has also raised concerns about foreigners potentially selling — or simply allocating less to — U.S. assets, including the dollar DXY, stocks and Treasurys. Those fears were evident last week after a weak 20-year Treasury auction spooked investors and stocks dropped. 'I'm not going to panic,' Dimon said Friday, as part of his warning of trouble ahead for the bond market. 'We'll be fine.' JPMorgan shares JPM fell 0.1% Friday but were 10.1% higher on the year so far. The S&P 500 finished the session up 0.5% so far in 2025, while the Dow was 0.6% lower and the Nasdaq Composite was off 1%, according to FactSet. It's my dream to travel to Africa. My husband says it's not on his bucket list. Do I pay for him or go alone? This chart shows why investors should be worried about the latest bond-market selloff My friend is getting divorced. Her husband kindly said, 'Take the house.' Is there a catch? 'What we found horrified us': My elderly relative mistook charity envelopes for overdue bills — and gave thousands to other family members Bond 'vigilantes' are sending warnings globally. What does that mean for your portfolio?
Bloomberg
4 days ago
- Business
- Bloomberg
NY Proposes 9.3% Con Edison Return as Higher Power Bills Loom
The staff of New York's utility regulator recommended Consolidated Edison Inc. collect a 9.3% return on its equity, lower than the amount sought by the power company. The utility had requested a return on equity of 10.1%. Analysts at Citigroup Inc. had predicted that staff would recommend a 9.2% return.
