The Financial Services Faculty’s John Mongelard attended the FCA’s transforming culture conference on 19 March 2018. The FCA recently asked the industry’s leading thinkers to explore the key themes around culture. Each wise head has written an essay and these were featured in the FCA’s March Discussion Paper, ‘Transforming Culture in Financial Services’.
The event featured four panel sessions looking at the four big themes:
On the first question there was consensus that there was no unique target culture but that there was a degree of consistency on what was a bad culture. Firms should focus on ‘speaking up’ or ‘speaking out’ as it was renamed (because the conversation would not always be ‘up’ or with your line manager). Many issues in the past had not been flagged or not been flagged early enough so this had subsequently led to bigger problems.
One delegate represented ‘Wrungway’ a new app to help gather questions from staff and flag them with senior colleagues. This would support ‘truth to power’ and encourage line managers to create the environment where staff could feel comfortable raising uncomfortable truths. It was noted how we were often comfortable raising operational challenges and describing we overcame them, but far less likely to raise ethical issues and say to others where we may have made ethical mistakes. One firm had hard coded such discussions into their meeting frameworks and time to discuss ethical risks.
On the second question there was similar consensus on some of the things that were unhelpful. The constant treadmill of new regulations led to a tick box, compliance culture and little management bandwidth and time for self-reflection.
Incentives were noted as the perennial challenge of balancing productivity with risk. It was also one of the reasons bankers have been so unpopular in recent times. One firm had scrapped all sales targets and all sales management information. And another had said they would pay their staff so much (in fixed pay) so as to take money off the table i.e. the need for bonuses. It seems the industry is ready and willing to make some tough decisions.
Leadership was difficult to get right on conduct issues as what was ‘right’ was often determined by what was popular at the time. People tend to go with the grain so issues would emerge slowly overtime and would happen rather than being thought about explicitly in terms of its morality. Leadership at all levels, tone at the top, middle managers ad line mangers each had a role to play.
Watch this space for more news on conduct and culture issues.
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