The fallout from Australia’s Banking Royal Commission could provide a “launch pad” for the country’s risk profession as companies look to improve their internal processes, according to industry analysts.

The Royal Commission into misconduct in the financial services sector could present an “opportunity” to the risk profession, as companies place greater emphasis on culture and risk management, experts say.

The Commission and subsequent interim findings from Kenneth Haynes’ report unearthed endemic misconduct in the financial services industry, leading to public criticism of Australia’s major financial services groups. Risk professionals predict it will spur companies to look at group culture and ask where the risk function sits in their organisation.

Eamonn Cunningham, an independent risk consultant, said the Commission underlined a “culture of focus on absolute short-term gain in some companies, without any regard to as to whether this was in the long-term interest of the entity itself”.

Cunningham said the Commission showed “an apparent lack of effective and transparent systems in some organisations, alongside a culture of ‘don’t ask’, or ’don’t probe too deeply”.

Cunningham said the Commission as a “big wakeup call” for the financial services industries and other sectors, and a chance for companies to address their risk processes. He described it as a “big opportunity for risk managers of calibre to get involved”: “It is a time for companies out of the public spotlight to ask the question, ‘how would we fare if we ended up in the witness box?’”

Cunningham called on companies to adopt a strategic risk management process that “may be formalised in larger enterprises and practiced informally at SMEs”. He added: “You need to ask the fundamental question, ‘what are you in business for?’ You need a long-term view, rather than relying on short-term initiatives that offer short-term gains.”

Scott Ryrie, of the Risk Management Institute of Australasia, said the Commission’s findings could be a “launch pad” for the region’s risk profession: “The Royal Commission has woken all companies up to what culture should mean. What is your corporate culture? Are you just box ticking and pretending, going through the motions?”

He said the Royal Commission highlighted a “lack of culture” within the major financial services groups, an issue that could be improved with strong risk management: “Risk should be looking at driving culture, and that has been lacking in many organisations, which have been driven by profit alone.”

Ryrie said there was heightened demand for risk professionals as companies seek to improve their risk functions: “This is a chance to make the industry a profession, like the legal profession, CPAs or engineers. Currently, recruiters in the risk industry are getting huge demand and not much supply.”

Ryrie said companies had begun to make risk management a more senior part of their organisation: “One change I have seen is that some corporates have their risk function with governance and audit reporting to them. That is a big change, as risk has traditionally been within finance or internal audit.”

Ryrie said companies should give risk management teams greater authority to work alongside board-level executives: “Where the risk management team is given more authority, it is a lot more effective. If risk managers can communicate with senior management, the entire function will be far more effective. If they’re allowed to be more involved, they [risk managers] should have the ear of senior people.”

 James Beck, managing director of corporate advisory firm Effective Governance, said there was an “opportunity for boards and its risk committee to ensure proper oversight of risk”.

 He said boards needed to understand “people risk” arising from management conduct: “This is not restricted to just the finance sector, as we saw the same cultural issues around People Risk from the Child Abuse Royal Commission. I predict that that we will see the same People Risk issues arise from the Aged Care Royal Commission.”

Beck described the findings from the Banking Commission as a “huge” chance for company boards “to take back control and govern in the interests of the organisation, skills-based boards to show leadership and accountability, and to drive robust culture and weed out inappropriate money hungry behaviour from CEOs down”.