Crown culture questioned by commissioner Ray Finkelstein
The ability of Crown Resorts to overhaul its culture has been questioned by royal commissioner Ray Finkelstein, who is overseeing the Victorian royal commission into the casino giant.
The Australian Financial Review reports that Finkelstein cast doubt on the ability of Crown Resorts to overhaul its ruthless “profit motive” culture by changing “a few people at the top” after a “grim picture” of the casino’s corporate culture was revealed at the inquiry.
Commissioner Finkelstein posed a series of hypothetical questions drawing on recent evidence heard during the Victorian royal commission into Crown Melbourne and conclusions from the NSW Bergin inquiry, which found the James Packer-backed group unfit to hold its Sydney licence.
He asked Victoria Whitaker, a Deloitte partner hired to review Crown’s culture in August, to rate the culture of a Crown-like firm on a scale of one to 10.
“Assume you have a firm who’s engaged in the following kinds of conduct,” he told her.
“Systematic long-term breaches of the law, both statute law and other legal obligations. Systematically, and over a period of time, facilitated illegal conduct by third parties.
“In dealings with the government: lacks candour, doesn’t make full disclosure. Deals with lots of vulnerable people and takes advantage of them.
“And each of those types of conduct is explicable by a profit motive. That is, ‘if I engage in all of those things, I will make more money than I otherwise would’.”
Commissioner Finkelstein asked what those factors revealed about the culture of a firm.
Ms Whitaker said that sat “on the end of looking after oneself, and being oriented towards one. That is at the lower end of the scale.”
Executive change not enough to trigger culture shift at Crown Resorts
Commissioner Finkelstein considered the idea that removing “a few people at the top” would not be enough to spark a culture shift in an organisation.
Packer-backed directors Michael Johnston and Guy Jalland left in February, followed by former AFL boss Andrew Demetriou and then-chief executive Ken Barton.
Harold Mitchell and John Poynton left in March.
Crown’s comative chief legal officers Joshua Preston and Mary Manos also left the group in the wake of the Bergin inquiry, which found Crown had facilitated money laundering, disregarded the welfare of staff in China and allowed organised crime to infiltrate the business via junket operators.
“I agree that simply changing the top will only get you part of the way to achieving the activities that would drive that change that you’re looking for,” Ms Whitaker said.
The inquiry heard on Wednesday that managers and executives fostered a culture of fear and were driven to meet financial targets.
Former Crown Resorts chief executive Mr Barton told Ms Whitaker, as part of her ongoing review of Crown’s culture commissioned in August, that employees were too “scared” to speak up when they saw wrongdoing at the casino giant.
Mr Barton also told Ms Whitaker that Crown’s board had been unresponsive and Crown’s executives were complacent and formed a “permafrost”, effectively a barrier between employees and the bard.
Counsel assisting Penny Neskovcin suggested Mr Barton had identified “serious cultural and compliance issues” revealing a “pretty grim” culture at Crown.
Ms Whitaker agreed.
Reviews limited to internal documents and nothing more
Another Deloitte consultant, Cara Hartnett, revealed in evidence to the inquiry that Crown Resorts had commissioned in 2019 a limited review of its risk management system that excluded assessing the effectiveness of the policy on the ground.
“Does that mean you don’t look at any detail at all, you just look at papers and assess whatever you are looking at by dealing with the papers and nothing else?” Mr Finkelstein asked.
“Yes commissioner, it’s essentially a documentation review,” Ms Hartnett replied.
Crown’s chief risk officer Anne Siegers said she used the Deloitte report to conduct her own internal review of the effectiveness of the program in the company but did not write a formal report on her findings.
The review didn’t assess whether the risk framework was suitable for a casino, the inquiry heard.
“It’s what a risk management profile should look like…but not a risk management profile for a casino, which might have to look like something specific taking into account the risks that are confronted by a casino,” Mr Finkelstein said.
