Corporate culture of financial institutions: current problems, challenges, and necessary transformations

Abstract

The global financial crisis and subsequent upheavals in the national banking systems of many countries, including Ukraine, demonstrated the obvious imperfection of the modern understanding of the essence, components, and role of corporate culture. Corporate culture, as well as the corporate social responsibility of financial institutions, lacks a legal component. Corporate codes formally declare a number of moral and ethical principles, values, but do not include provisions on the need for financial institutions to comply with the norms of international law and state laws. Corporate culture in this form, as well as corporate social responsibility, mostly perceived as a certain analogue of charity, plays an important part in promoting the image and strengthening the positive reputation of financial institutions. However, they do not contribute to the awareness of responsibility for compliance with laws as the foundation of corporate culture, corporate social responsibility in the activity of business structures in the financial sector.
 As the main causes of global financial crises and those in national banking systems, lawyers and researchers of corporate culture named corporate dishonesty, violation of legal norms by banks, respectively, improper management. Such corporate culture, which lacks a legal component, does not fulfill the role of a legal regulatory mechanism, was called "defective." It not only does not draw a clear line between legal and illegal activities of financial institutions and allows financial manipulation but also does not perform the main functions of strengthening a positive reputation and increasing trust in financial institutions and the financial sector as a whole. Moreover, in the conditions of a crisis, it destroys this trust.
 The article examines the main approaches to expanding the interpretation and components of the corporate culture of financial institutions, substantiates the need for its transformation in the direction of introducing the legal component as the basis of corporate culture and responsibility.