The End of the Drinking Culture?

It has been reported that Lloyd’s of London will introduce a new code of conduct in an effort to address problems with drink and drugs at the 331-year-old insurance market.

In 2017, Lloyd's banned staff from consuming alcohol during working hours, but this applied only to about 800 workers, who were directly employed. The new policies will extend to the c.40,000 people who have access to the Lloyd’s building.

Under the new rules, anyone who is considered to be under the influence of drink or drugs can be barred from the Lloyd’s building or have their pass removed. Whilst it is not an outright ban on alcohol, it still means that people who are noticeably drunk or high will face removal.

Zero-tolerance policies on workplace drinking are now common in many sectors but the clamping down on the drinking culture within the insurance industry has proved controversial.

The financial services sector has long had a reputation for its drinking culture. Although things have improved since the 1980s, it still exists. Traditionally, much insurance business is carried out face-to-face and alcohol is often used to ‘lubricate’ social relationships. Many would agree that there is nothing wrong with daytime drinking, provided it is done sensibly and does not adversely affect the behaviour of the people involved. Similarly, alcohol, when consumed responsibly in after-work social activities, can have positive effects, helping colleagues bond and celebrate successes.

Nevertheless, alcohol affects people differently and its consumption can be linked to misconduct, including boorishness, sexual harassment, bullying and aggression. Excessive alcohol consumption may also impair clarity of thought and judgement. For example, is a Senior Manager in the same position to make an effective decision at 5pm after, say, two bottles of wine, as they would, sober, with a ‘clear head’ at 10am? Almost certainly not. Could this affect their ability to exercise due care, skill and diligence? Quite possibly.

Under the Senior Managers and Certification Regime (SM&CR), Senior Managers and Certification Staff need to be assessed for fitness and propriety each year. The regulator’s view of how this applies in respect of alcohol and drug abuses is covered in FIT 2:

A person may have been convicted of, or dismissed or suspended from employment for, drug or alcohol abuses or other abusive acts. This will be considered by the FCA only in relation to a person's continuing ability to perform the particular controlled function for which the person is or is to be employed. [FIT 2.2.2.G]

The FCA would expect an SM&CR firm determining the competence and capability of staff being assessed under FIT to consider convictions, dismissals and suspensions from employment for drug or alcohol abuses or other abusive acts only in relation to a person's continuing ability to perform the particular FCA designated senior management function or an FCA certification function for which the person is, or is to be, employed. [FIT 2.2.2A.G]

It's also worth bearing in mind that a drinking culture can exclude. In an industry where much business takes place in bars and pubs, people who abstain from alcohol for religious, cultural, health or lifestyle reasons may avoid the sector because they do not wish to participate in this part of the business culture. Therefore, reducing the emphasis on alcohol consumption can help foster a more inclusive environment.

When it comes to alcohol and the workplace, it is best to take a common sense approach. If your organisation’s code of conduct explicitly forbids daytime drinking, then follow the rules. If alcohol consumption is permitted, and you choose to drink, then drink sensibly and know your limits. Think about how your behaviour could impact on your colleagues, your clients and your reputation.