The Prudential Regulation Authority (PRA) has expressed ‘deep concern’ over reports of sexual harassment and bullying within the London market and has called on the general insurance sector to do more to improve organisational culture.
Research into the culture of Lloyd’s of London, published in September by the Banking Standards Board, indicates that one in twelve respondents had witnessed sexual harassment during the past twelve months.
Nearly a quarter of respondents felt that inappropriate conduct was tolerated in their organisation, with many people feeling that they would not be taken seriously if they raised concerns.
As the implementation of the Senior Managers and Certification Regime (SM&CR) approaches for FCA solo-regulated general insurance intermediaries, firms need to consider areas of non-financial misconduct and how it is dealt with.
The FCA recognises a link between non-financial misconduct and a firm’s approach to regulatory compliance and professional standards. Therefore, incidences of non-financial misconduct may be considered as part of an individual’s annual fitness and propriety assessment.
Firms are encouraged to foster organisational cultures where employees feel confident in speaking up about their concerns and any risks the firm may be exposed to.
A firm’s board, or governing body, needs to take the lead in promoting a healthy, ‘speak-up, listen-up’ organisational culture. The directors or partners should lead by example and reasonably ensure that the right systems, controls and policies are in place to allow the firm to function effectively and ethically. The tone from the top impacts on the entire organisation.