In a speech delivered at the MetricStream Governance Research and Compliance summit Mark Steward, Director of Enforcement and Market Oversight at the FCA, discussed how to create an environment with good governance, regulatory compliance and fair process.
From a regulatory point of view, the FCA is responsible for setting rules and standards, which describe the expectations and set the boundaries for governance and compliance. However, in isolation, this is not enough, more is required to inspire confidence and integrity in the UK’s financial markets.
According to the FCA, the ‘more’ that is required in a firm’s governance culture is:
- A detailed understanding of the business and how it operates.
- Effective systems and controls to ensure the business is operating in accordance with standards of conduct, designed and approved by senior management.
- A risk-focused counter-factual or counter-intuitive audit, detailing a cynic’s perspective of the business, allowing senior management to identify the gaps before they are exploited.
- To uproot misconduct quickly and effectively.