The FCA has produced a discussion paper entitled Transforming Culture in Financial Services, consisting of a set of essays presenting views from industry leaders, professional bodies, academics and thought leaders, focused on driving purposeful cultures within firms.
The paper examines healthy purposeful cultures in firms, and the link between positive cultures and good outcomes for firms' customers, employees and investors.
The regulator has made tackling unhealthy cultures a priority, specifically targeting the elimination of sexual harassment and other unhealthy practices from the workplace and promoting diversity and inclusion.
The FCA has clarified that a firm’s purpose is their own responsibility and, as with culture, the regulator does not prescribe what this should be. However, there are common elements of a healthy culture:
- a meaningful purpose
- an inclusive environment where it is safe to speak up,
- effective leadership and governance
- employees that have the necessary capabilities and are motivated by appropriate incentives
Jonathan Davidson, FCA Executive Director of Supervision - Retail and Authorizations, states: “A healthy purposeful culture should lead to better outcomes for consumers and markets, and healthy and sustainable returns for shareholders. It should also lead to a healthier and less stressful environment for employees, and a reduction in increasingly concerning mental health issues. However, culture transformation is difficult; even with strong leadership it takes time and consistency, but small changes can make a big difference. I hope that everyone who reads these essays will be inspired to take at least one idea back to their organization to try for themselves and take a step towards creating more purposeful cultures in financial services.”
To read the discussion paper in full, please click here.