A Compliance Voice Is a Strategic Asset – Not a Constraint

Elevating compliance to the board level is not just about avoiding fines; it’s about making your business stronger and more sustainable. A knowledgeable and empowered compliance voice in the boardroom provides several positive advantages:

• Strategic Risk Management: Insurance intermediaries operate in a fast-evolving environment – new FCA rules (e.g. pricing practices, Consumer Duty, regulatory reporting), must all be managed alongside emerging technologies and shifting customer expectations. A compliance leader at board level can help anticipate regulatory trends and ensure the firm’s strategy aligns with regulatory expectations. Rather than being seen as the “business prevention unit,” compliance professionals can help to guide product oversight and governance development, distribution models, and remuneration structures that balance growth with fair customer outcomes. As the FCA rolls out initiatives (from ESG considerations to operational resilience), having compliance insight during strategy-setting means the board can make informed decisions that stand up to regulatory scrutiny and avoid costly mis-steps. In short, compliance input helps the board see around corners.
• Improved Decision-Making and Challenge: Boards make better decisions when they consider a diversity of perspectives – including the perspective of “what could go wrong” from a regulatory standpoint. FCA officials have emphasised that diverse and inclusive cultures, where people feel safe to challenge, prevent groupthink and lead to better outcomes​.

A strong compliance voice contributes to this culture of constructive challenge in the boardroom. A compliance perspective might question imbalance in an aggressive sales campaign exposing a risk of mis-selling, or flag conflicts of interest that others may have overlooked. Such challenge, when highlighted early, can save the firm from disaster. Indeed, research has shown that teams which encourage members to speak up and admit mistakes outperform those that don’t.

In the board context, a compliance director or NED who isn’t afraid to raise uncomfortable truths can be the conscience of the company – prompting the board to pause and rethink when needed. This doesn’t stifle innovation; on the contrary, it ensures innovation is pursued in a responsible way.

• Healthy Culture and Reputation: When employees see that their company’s leadership genuinely values compliance and ethics, it sets the tone for the whole organisation. If a board routinely discusses conduct, customer outcomes, and regulatory requirements – not just profits – staff get the message that doing the right thing is non-negotiable. Over time, this builds a culture where front-line teams are more likely to flag issues up the chain rather than hide them. It also builds trust with external stakeholders. Clients, business partners, and regulators themselves take comfort when a firm’s governance structure visibly prioritises compliance. On the flip side, if compliance is perceived as a mere afterthought or a junior function with no clout, employees may feel pressured to cut corners, and the firm’s reputation can quickly erode. In the insurance market, trust is a key currency – clients need to know their intermediary will act with integrity. A board that champions compliance helps embed that trust at every level, which is ultimately good for business.
• Accountability and Support for Senior Managers: Paradoxically, ensuring a strong compliance voice at board level also protects the board members and senior managers themselves. It means there is likely to be better documentation of decisions, clearer allocation of responsibilities, and an audit trail of compliance considerations – all of which can demonstrate those “reasonable steps” regulators look for under SM&CR. Board members can take comfort that they are less likely to be individually blamed for a failure if they can show they heeded compliance advice and maintained proper oversight. In essence, the compliance function serves as an early warning system and an adviser that helps senior leadership meet their duties. Many boards now either include a dedicated Compliance Director or ensure the Head of Compliance has direct access to the board specifically for this reason. It is far better to have potential issues thrashed out in the boardroom in real time than for the FCA to later ask awkward questions about who was responsible. As the adage goes, “an ounce of prevention is worth a pound of cure.”

Ultimately, giving compliance a seat at the board table is about baking in long-term resilience. It aligns the firm’s operations with its ethical obligations and regulatory requirements from the outset, rather than reacting after the fact. In doing so, it also positions the firm to take advantage of opportunities: a broker with a strong compliance culture is well-placed to navigate regulatory changes (for example, those who embraced the spirit of Consumer Duty are now building deeper customer relationships, giving them a competitive edge). Conversely, a firm that constantly has to firefight regulatory problems will find its growth plans derailed and its brand tarnished.

Further Reading

This is part 3 of a 3 part series of articles written by the UKGI consultancy team entitled, 'A Seat at the Table for Compliance'. 

Read part 1 here: Why Every FCA Regulated Board Needs a Compliance Voice

Read part 2 here: The Risks of Marginalising Compliance

Conclusion: A Seat at the Table for Compliance

The evidence is overwhelming that a compliance voice at board level is not just “nice to have” – it is critical for good governance. The FCA’s own expectations make it clear that boards are on the hook for ensuring good outcomes and managing risks. As we’ve seen, when boards fall short in this duty – whether through neglecting compliance information, lacking relevant expertise, or fostering a poor culture – the consequences can range from consumer harm to multi-million pound fines and individual bans. On the other hand, boards that proactively integrate compliance into their decision-making reap the benefits of foresight, stronger culture, and credibility with regulators and clients alike.

For insurance brokers, this is a pivotal governance issue. The sector has faced mis-selling scandals, conflicts of interest challenges, and now the implementation of Consumer Duty – all areas where board leadership and oversight determine success or failure. It is no exaggeration to say that the survival and prosperity of a brokerage may depend on getting this right. As one FCA letter put it, boards should not treat compliance as a mere “exercise” but rather take “concrete, proactive action” to drive good outcomes​. That starts with having the right people and voices in the boardroom.

The question every insurance intermediary board should ask itself is: Do we have a strong, independent compliance voice at the table – and are we truly listening to it? If the answer is anything less than an unqualified yes, now is the time to change that. The cost of marginalising compliance is simply too high, and the rewards for elevating it are too great to ignore. In a regulated industry built on trust, empowering compliance is empowering your business.

Join Our Compliance With Confidence Spring 2025 Seminar 

To further explore how to embed compliance into board governance and hear practical tips on strengthening your firm’s culture, join us for an interactive seminar I’ll be delivering alongside former GI Supervision Manager at the FCA, John King, on this very topic.

We will dive into real-world scenarios, discuss strategies to meet FCA expectations, and provide guidance on turning regulatory compliance into a strategic advantage for your firm.

Don’t miss this opportunity to learn and engage with peers – sign up for the seminar and take the next step in developing your boardroom with a culture of good governance and ethical leadership.

Together, let’s ensure that the compliance voice is heard loud and clear at the board table, driving our industry forward with integrity and confidence.

Sign up today: Workshops and Live Webinars - UKGI