Jonathan Davidson, the FCA Director of Supervision, delivered a speech addressing culture and conduct within a firm and the FCA's role within this.
Key points from the speech include:
- Mr Davidson’s definition of culture as the typical, habitual behaviours and mindsets that characterise a particular firm and that there should not be a one-size fits all culture for all firms.
- The fact that culture of regulated firms is and always has been vital in the FCA’s regulation of their conduct. Culture and governance is one of the FCA’s seven priorities, as set out in the 2016/17 Business Plan. Accordingly, the FCA will be paying very close attention to the culture of firms and what boards and management are doing to shape the culture.
- The FCA’s ambition that mindsets and incentives will shift to make ‘doing the right thing for consumers and the markets’ the objective that is always considered.
- The fact that the role of all leaders is to encourage a culture of personal responsibility and to impress upon all staff the value of good culture to the health of the firm and the wider financial services industry. The FCA will be paying close attention to how senior managers discharge their responsibility for ensuring that individuals working at all levels in their areas of responsibility meet appropriate standards of conduct and competence.
- More firms are forming the view that a strong conduct culture, which builds consumer trust and inspires employees, is in the economic interest of the firms and their shareholders.