The pervasive and damaging guiding principle of shareholder value: insights through the Australian Banking Royal Commission

The Banking Royal Commission (BRC), established in 2017, arose in response to a decade of poor behaviour within the Australian Financial Industry (AFI). Setting out to examine widespread misconduct, this commission uncovered an excessive profit-seeking focus, deficient governance and culture, and customer mistreatment. Instead of addressing cultural and governance problems with insignificant alterations, research must examine shareholder value, the financial industry’s driver, in order to change this persistent cycle of profit accumulation combined with mistreatment. Shareholder value within the AFI pervades the corporation by driving the profit imperative and fueling sales cultures and damages stakeholder relations, yet the practices, attitudes, and actions engendered by this principle remain underexplored. With this research gap in mind, this project poses the overarching research question: to what extent does shareholder value shape culture and governance in the Australian financial industry? Ultimately, by focusing on this question, this thesis argues that shareholder value is a pervasive and damaging guiding principle heavily shaping the AFI’s culture and governance. In answering the research question, this project draws upon critical discourse analysis alongside Bourdieu’s concept of doxa and Foucault’s concept of governmentality. By pairing in this manner, this research reveals the exercise of power within the interim and final reports, uncovering shareholder value determining practices and attitudes detrimental for industry conduct and the commission structuring action schizophrenically by proposing corporate social responsibility that includes shareholder value with non-profit responsibilities. In doing so, this thesis finds shareholder value heavily shaping the AFI’s culture and governance. By examining shareholder value within the BRC, this project not only extends data on this principle in the financial industry, but also is the first to challenge the model proposed by the commission, showing that shareholder value will continue to pervade and damage the financial industry in an unrelenting and ruthless search for value.