Two ANZ Bank traders and two human resources executives were widely reported recently to have engaged in business with a client at a Sydney strip club. After investigating the incident, the bank hierarchy issued a high-sounding statement about breaching the bank culture and publicly sacked the traders.

As the head of the Australian Human Resources Institute and a former head of HR at ANZ, I found myself making a predictable observation: “What about HR?” There were four ANZ employees at the strip club, yet only two were singled out and fired.

AHRI has just released a report conducted with our research partner, Insync. Based on a survey of 365 chief executives and public service agency heads, Insync asked the business leaders what they thought of HR in their organisations.

There were a number of findings, but one was a view by the business leaders that while HR technical expertise was important to them, how HR behaves carries greater weight than what HR knows.

Insync asked the business leaders to rate 10 nominated HR behaviours on (1) how important they were to the business and (2) how well HR performed in each one. The HR behaviours as listed were collaboration, courage, being credible, engaging in critical and enquiring thinking, taking a future orientation, being influential, being professional, resolving issues, driving solutions, and understanding and caring for the business and its people.

Executives of all stripes might be expected to display those qualities to some degree, but there is an expectation that HR business partners in particular should exhibit behaviours of that order in their daily practice, and the 486 HR practitioners surveyed by Insync agreed with that.

So what sort of signal was ANZ sending to its workforce when it fired its traders and left its HR executives untouched for having, on the face of it, committed the same offence? Objective observers might rightly ask whether HR is a protected species.

You don’t have to be familiar with Tom Wolfe’s Bonfire of the Vanities to be of the view that bank traders are not expected to set standards of behaviour. The $360 million cowboy scandal of the NAB ‘rogue’ traders in 2004 might be fading in the minds of many in the corporate world, but it’s worth keeping Wolfe’s ‘masters of the universe’ front of mind. They believed they were entitled to operate outside the accepted mores to which we more ordinary mortals live our lives, and their mind-numbing bonuses tended to reinforce that sense of special entitlement.

Employees, bank traders included, require leadership from the top to disabuse them of the idea that they enjoy workplace rights and privileges that could best be described as delusional, but the leadership is best exercised before they have offended the prevailing culture, not after.

The chief executives and agency heads that Insync surveyed left little doubt that the role of the HR business partner is to be the repository of the organisation’s culture, to be attuned to what was happening on the ground with the professional practice and behaviour of people in the organisation, and to alert the organisation or individuals within it to breaches of culture that could detrimentally affect reputation, productivity and bottom line.

Because ANZ did not offer a reason for its inaction on the HR executives involved in the strip club frolic, we are left guessing. One answer is that they were female and the traders were male, but the ANZ is a gender equity employer so that answer doesn’t stack up too well. Another is that the traders were highly paid achievers and it’s best to just go along with whatever they want. Given the HR behaviours that CEOs say they are looking for in their HR executives, such as being professional, credible and courageous, that response doesn’t cut much mustard. On those scores, the brakes should have been applied by HR at the outset, who should have alerted the traders to the inappropriateness of what they were proposing.

Another explanation might be that HR practitioners are not regarded seriously enough within the organisation as people expected to show leadership. If that is the case, the bank’s inaction was an opportunity lost.

AHRI is now requiring HR practitioners who want to be recognised and certified as business partners to show through a rigorous program of study and verification of their practice that they understand the worth of HR expertise to the business, but that they are also pre-emptive in taking an active leadership position in upholding organisational culture. And they understand that the best way to do that is to lead by example. If they fail to live up to that, it is beholden on the organisation to hold them to account.

This article originally appeared in the Financial Review as “HR: The unanswered question in the ANZ strip club scandal.” To view the original article, click here. 

Peter Wilson AM (FCPHR) is the chairman of the Australian Human Resources Institute and secretary-general of the World Federation of People Management Associations. To read past Perspective columns, click here.