Jessica joined RWA in 2018, having graduated with a First Class Honours degree in Film Studies. Her role as a content designer involves developing new and engaging e-learning modules as well as assisting in the creation of articles for Insight.
On the 31 March 2021, the FCA’s executive director of enforcement Mark Steward delivered a virtual speech highlighting the importance of building a culture of compliance and evolving regulatory expectations within the fabric of an organisation.
Key messages from the event discussed how the FCA’s Senior Managers Regime (SMR) has changed the way UK firms allocate responsibilities, align those responsibilities to relevant controls, and ensure oversight of how these controls play out in practice.
Steward described how the FCA’s Five Conduct Questions (5CQ) start with “tone from the top” but increasingly focus on “tone from within”, requiring everyone across an organisation to be personally accountable and engaged.
Key principles such as the fair treatment of customers and ensuring the business is managed effectively allows for a strong professional relationship to be built between employer, employee, and consumer. Other factors such as professionalism, expertise, and a focus on making the right decisions for customers, allow organisations to establish a solid reputation.
Cultivating Workplace Fulfilment
Culture and compliance in the workplace go hand in hand. Companies that dedicate themselves to maintaining happy, healthy, and motivated workplaces are ensuring that staff feel valued and respected, thus more likely to reciprocate that behaviour and meet their performance goals which in turn aids productivity.
Within a culture of accountability, employees deliver results, and each are responsible for their actions. In the event that a problem does occur, it is important to remember that learning from a mistake is far more valuable than assigning blame. An accountable workplace culture allows for growth and improvement. It serves as a buffer against negative experiences and stress which in turn improves employees’ ability to bounce back from any problems and challenges that have occurred.
Strong business leaders tend to be those who foster this culture of accountability, making certain that all within that organisational structure operate to the same level of standards and expectations. One clear set of standards and expectations for all allows for transparency across all levels of the organisation and ensures that each employee knows exactly what is expected of them.
Embedding Behavioural Change
The Senior Managers Regime and the FCA’s 5CQ questions are “great drivers” of taking a different approach as they require firms to think about behaviour at the point it might fail. The organisation must continue to run effectively even when the worst-case scenario unfolds.
The focus on an organisation’s point of failure aims to encourage greater awareness of consequences and any risks that could potentially cause a business to fail, which serves to promote better calculations of judgement from within the organisation. It is the responsibility of the organisation to ensure that employees have the information and procedures they need to respond to and recover from any incident whilst minimising business disruption and losses.
The changing expectations from the FCA around compliance and culture are increasingly important for organisations to understand. Businesses who remain committed to developing positive cultures achieve significantly higher levels of organisational efficiency — including financial performance, customer satisfaction, productivity, and employee engagement.
The growing concern around culture and accountability at all levels within an organisation underlies the FCA’s thinking across from everything including SM&CR to diversity and inclusion. These changes cannot be accomplished overnight, but rest assured it will remain a regulatory focus in the near future.
If you have any questions regarding cultivating the right culture, in your workplace, please do not hesitate to contact the team at RWA. The Aviva Development Zone can help you with a wide selection of courses relating to many aspects of culture, compliance and treating customers fairly.
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