FCA Director of Enforcement and Market Oversight, Mark Steward, spoke on firm culture and governance. He highlighted the importance of reacting appropriately and efficiently to misconduct, and said that, in order to establish an environment in which good governance, regulatory compliance and fair processes are maintained, the following are needed:

  • a detailed understanding of the nature of the business, meaning knowing how the front line, middle and senior management actually operate;
  • effective systems and controls to ensure the business is operating effectively and in accordance with the standards of conduct designed and approved by senior management; and
  • a “healthy dose of reality” whereby a risk-focused counterfactual or counterintuitive audit can take place to spot any gaps in systems and controls.

(Source: FCA Steward – Culture and Governance)