Interorganisational Networks and Systemic Misconduct in the Australian Financial Services Industry

This study investigates systemic misconduct in the Australian financial services industry. It challenges the common focus on individual accountability in financial misconduct by exploring how disparate entities, without intentional collaboration, exhibit similar misconduct patterns, spreading across the industry through interorganisational networks. Using Exponential Random Graph Models (ERGMs), the study finds statistically significant evidence of systemic misconduct, where entities share ties to misconduct within and across industry sectors. The findings suggest that misconduct is a systemic issue, not just a result of "bad apples," with implications for legislation, supervision, and management both in Australia and globally.