Accountability 2 is on its way.
How many times have you seen the word culture in FCA publications, be it the Business Plan, Conduct Risk Report, a speech or an article made/written by an FCA executive?
In the FCA’s 2016/17 Business Plan it stated that one of the outcomes it is seeking to achieve is an industry trusted by its customers. The regulator believes ‘embedding cultural change’ is fundamental to achieving this:
“Although we have seen some major changes implemented in the aftermath of the financial crisis which have massively improved behaviours, it is clear the public does not recognise the work that has been done to date – their views haven’t changed significantly and therefore trust in the industry has not yet returned”.
Culture forms an important part in demonstrating these changes. With the embedding of the of the new Senior Managers Regime in Banking and the implementation for other regulated firms coming along in 2018, there isn’t a better time to ensure your strategy, governance and underlying culture are aligned.
The FCA wants to see progress on culture, alongside embracing the requirements of the Senior Managers and Certification regime, SMCR. They have made it clear that senior management teams will be held to account for failings in company culture. Taking time now to ensure that a strong framework is in place to satisfy the regulators will give your senior managers and their teams the confidence they need to go about their day to day duties.
At the heart of the new regime sits personal responsibility for the affairs of the firm by the senior management. Boards who aspire to a better understanding of their cultural progress and the further actions needed to shape and influence better outcomes on a more consistent basis will be seen as positive examples of embedding the SMCR requirements. In this respect culture is no different to strategy; where are we now, where do we want to be, how will we get there, and what risks will we meet along the way!
The reputation (and revenues) of your business depends on your approach to culture, conduct risk and of course, SMCR or Accountability 2 as the second tranche is being referred to. Every week we hear of another corporate failure that has eroded the trust in the industry – better business culture has become a regulatory priority.
FSTP have been steeped in the implications and requirements of the SMCR for the last 3 years. We understand how you embed and implement the requirements of the SMCR, developing a strong corporate culture without putting the brakes on business growth.
Contact us if you would like to know more about how we can help your business – 2018 is fast approaching.
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