Why Every FCA Regulated Board Needs a Compliance Voice

In an era of intense regulatory scrutiny, governance and culture are now board-level issues like never before. The Financial Conduct Authority (FCA) has made it plain that firms must give compliance a strong voice round the board table.

Recent FCA communications – from portfolio “Dear CEO” letters to speeches – carry a clear message; you must ensure there is effective compliance oversight in the boardroom. This is becoming more evident in the light of recent enforcement outcomes where firms and individuals have faced consequences.

This series of 3 articles argues that having a compliance advocate at board level is not just a token gesture to satisfy regulators, but a strategic necessity. It explores the FCA’s latest expectations around governance, culture, and the Senior Managers & Certification Regime (SM&CR), and examines recent enforcement examples where lack of board-level oversight led to trouble. The message is clear – a compliance voice in leadership helps manage regulatory risks proactively, supports a healthy corporate culture and sound decision-making, and ultimately keeps your business on the right side of both the rules and public trust.

FCA Expectations: Governance, Culture & SM&CR

Regulators have been unambiguous that the tone from the top determines a firm’s conduct and outcomes. In a September 2023 letter outlining priorities for the insurance sector, the FCA warned that poor governance and culture in insurance markets are root causes of major failings, directly leading to harm to consumers, market participants and employees​.

The FCA explicitly expects boards to take proactive ownership of regulatory compliance and good consumer outcomes – not to view these as box-ticking exercises or wait to be prodded by the regulator​.

In other words, compliance should be embedded in the firm’s strategy and overseen at the highest level, rather than siloed or marginalised.

A cornerstone of these expectations is the Senior Managers and Certification Regime (SM&CR), which since December 2019 has applied to all FCA-regulated insurance intermediaries. SM&CR is designed to drive individual accountability to ensure the firm’s compliance in their areas​.

In practice, this means board members and executives can be held personally accountable if something goes wrong on their watch. One senior FCA official described SM&CR as changing how firms align responsibilities with controls and oversight down the line​ - it sharpens the focus on conduct and makes senior leaders answerable for failings.

The FCA has also doubled down on the link between culture and governance. In a February 2025 speech titled, “Culture is Contagious,” FCA Chief Operating Officer Emily Shepperd observed that time and again when the FCA investigates misconduct, “the same root cause [is found]: failings in culture and governance”​.

Decisions made in the boardroom directly shape outcomes for consumers and markets​. The regulator insists that a healthy culture – one that encourages speaking up, challenge and adherence to the spirit of the rules – must be driven from the top. Indeed, major regulatory initiatives like the new Consumer Duty have deliberately placed boards in the spotlight. The FCA made clear that the Consumer Duty had to be a “top priority for boards” and that ultimate accountability for meeting its requirements “sits with boards and senior management”​.

Note that while the FCA recently relaxed the formal need for a designated “Consumer Duty Champion” on the board, it has not relaxed the expectation that boards lead and oversee compliance with the Duty and other conduct standards​.

The takeaway for insurance intermediaries is straightforward: regulators expect your board to set the right culture, ask the tough questions and actively steer the firm’s compliance efforts.

Further Reading

This is part 1 of a 3 part series of articles written by the UKGI consultancy team entitled, 'A Seat at the Table for Compliance'. 

Read part 2 here: The Risks of Marginalising Compliance

Read part 3 here: A Compliance Voice Is a Strategic Asset – Not a Constraint

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