The FCA has stated that one of the outcomes it is seeking to achieve in this years business plan is an industry trusted by its customers and the regulator believes that 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 that the public does not recognise the work that has been done to date. Their perceptions of the industry still haven’t significantly changed and therefore trust in the industry has not yet returned.
Culture forms an important part in demonstrating these changes and with the introduction of the new Senior Managers Regime (SMR) what better time to ensure that your strategy, governance and underlying culture are aligned.
The FCA wants to see progress on culture, alongside the embedding of the SMR. They have made it clear that senior management teams will be held to account for failings in company culture. Therefore taking time now to ensure you have a strong framework in place that will satisfy the regulators will give your senior managers and their teams the confidence they need to go about their day to day duties.
For boards who aspire to better understand their cultural progress and the further actions needed to influence better outcomes on a more consistent basis, the new senior managers regime can be seen as pivotal in considering and maybe implementing changes. This is due to the new regime embedding the notion of personal responsibility for the affairs of the firm at senior management level.
In this respect culture is no different to strategy; where are we now? Where do we want to be? How will we get there? What risks will we encounter along the way?
The reputation (and revenues) of your business is dependant on your approach to culture and conduct risk. Every week it seems we hear of another corporate failure that has eroded the trust in the industry – better business culture has become a regulatory priority.
To develop a strong corporate culture without putting the brakes on business growth attend our popular Senior Management briefing on Culture & Ethics taking place on the 29th November.