Importance of Culture in Conduct
Roger Miles
25 years: Behavoural science & conduct
Regulators around the world are continuously driving culture improvements, this has only grown in significance since the changes caused by the COVID-19 pandemic. In this video, Roger will discuss a few of the signs indicating the shift towards a culture focus, and also discuss how a firm's purpose may have changed during the pandemic.
Regulators around the world are continuously driving culture improvements, this has only grown in significance since the changes caused by the COVID-19 pandemic. In this video, Roger will discuss a few of the signs indicating the shift towards a culture focus, and also discuss how a firm's purpose may have changed during the pandemic.
Importance of Culture in Conduct
9 mins 22 secs
Regulators have pushed forward with their global project of extending conduct controls into new territories. They have been putting their new tool, culture audit, into practice. Regulators, such as the FCA in the UK and The Dutch central bank, De Nederlandsche Bank have culture programmes in full swing. The Covid pandemic has had a significant impact on how financial firms behave and this has led to a number of considerations from regulators, such as the levels of stress workers have experienced and the new economic landscape.
Key learning objectives:
Identify the conduct and culture themes within financial firms that regulators focus on
Understand how the regulators assess whether a firm is ‘purposeful’
Which regulators are rolling out culture assessments?
- The Financial Conduct Authority (FCA) in the UK
- The Central Bank of Ireland
- The Dutch Central Bank – De Nederlandsche Bank (working on assessments for 5 years)
- The Monetary Authority of Singapore
- Australia’s Prudential regulator
How has the COVID-19 pandemic affected how regulators view how financial firms behave in the short term?
First, the effects of home working on a firm’s infrastructure has had a direct impact on team morale and mental health. For many, there has been a lack of distinction between work life and home life which led to high-levels of stress. There has also been a high level of pressure on commercial service, leading to customers becoming severely stretched under lockdown. Security has been another concern as senior managers struggle to directly supervise the activities of employees.
How has the shift to remote working changed the way employees engage with work?
The Banking Standards Board ran a survey on this in late 2020, six months into remote working. Employees reported that they were now happier than before with how well their bosses were supporting the health and well-being of their staff, how they were responding to concerns, and the general quality of their leadership.
What are the four consistent themes that regulators focus on?
- Purpose
- Leadership
- Governance
- Managing employees
Roger Miles
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