“Those of us who have looked to the self-interest of lending institutions to protect shareholder’s equity – myself especially – are in a state of shocked disbelief.”

When US Federal Reserve chairman, Alan Greenspan, made that admission to a Congressional committee in 2008, he was reflecting on the self-destructive behaviour of people in the corporate world.

In March 2004, following a scandalous loss of $360 million, NAB sacked four traders and four senior managers. Those departures were triggered by the scandal and occurred in the wake of the earlier exits of the chief executive Frank Cicutto and chairman Charles Allen.

According to Fairfax at the time, PwC noted in its report on the scandal that as well as inadequate supervision, flawed monitoring and faulty controls, “there was not a suitable compliance culture … and there was a tendency to suppress bad news rather than be open and transparent about problems”.

Put simply, the NAB scandal was partly about systems but largely about flaws in corporate culture and human behaviour.

On 15 March 2001, the Australian HIH Insurance Company went into receivership owing around $5.3 billion. While the root cause was due to HIH financial mismanagement, the reporting at the time was all about the profligacy of three big spenders: founder and CEO Ray Williams, director Rodney Adler and businessman Brad Cooper.

However, there were people behind the scenes at HIH who appeared to sit on their hands while matters ran out of control. For example, Colin Richardson had been a principal financial adviser to HIH on acquisitions and investments for nearly a decade. Having been party to the advice that saw HIH take on multiple unsound acquisitions, Richardson turned up at HIH the day before it collapsed to collect a $6 million commission, and expressed surprise the next day to learn the company was in the hands of receivers.

To these illustrations of corporate dysfunction could be added OneTel in Australia and on the other side of the Pacific, multiple collapses most dramatically at Lehman Brothers, triggering a global financial crisis which still reverberates in the global economy.

In the aftermath of the GFC, despite widespread acknowledgement that people were the problem, there was precious little evidence of HR being named as having a case to answer. Why was that?

A steadying hand needs clout, and for that a combination of personal qualities are required. A professional needs to show an understanding of the business malaise, combined with a readiness to fix the culture that is the cause. She or he needs to display a critical and enquiring mind that earns credibility and wins influence, and must be someone who is solutions-driven and can resolve issues into the future, rather than play blame games. The steady hand must also possess the courage to speak to power, and command the collaborative skills to win like-minded colleagues to the cause.

The evidence is these behavioural attributes were missing in 2008. Yet they can contribute to positive cultures that drive engagement, productivity and profitability, which is why they sit behind AHRI’s certification model. These behavioural attributes are also a factor in ensuring the protection of organisational value and shareholder equity, as Alan Greenspan came to realise.

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This article is an edited version. The full article was first published in the June 2015 issue of HRMonthly magazine as ‘Against the tide’. AHRI members receive HRMonthly 11 times per year as part of their membership. Find out more about AHRI membership here.