UK: The FCA - Workplace Culture, And Behaviour And Conduct

Last Updated: 11 January 2019
Article by Chris Holme

Most Read Contributor in UK, December 2018

The #MeToo movement, coupled with a 220% increase in whistleblowing complaints reported to the FCA about "non-financial" behaviour, such as discrimination, harassment and racism, over the past 12 months has prompted the FCA to start scrutinising how regulated firms are approaching these issues.

Christopher Woolard, the FCA's director of strategy and competition said in a speech in December 2018, that the FCA received a sharp increase in these reports after it was announced in May that it would look to the Senior Managers and Certification Regime (SMCR), which holds senior managers accountable for issues in their areas of responsibility, when sexual harassment is reported.

Mr Woolard warned that individuals who have responsibility could risk losing their fit and proper status on the basis of "non-financial" behaviour; which means they could not take up or continue in their role. The SMCR, which is already in force for banks and insurers, will be extended to all financial services firms from 9 December 2019. Under the SMCR, firms are required to assess whether their senior managers and certification staff are fit and proper to perform their role.

What can financial services firms do to improve workplace culture and diversity?

So far the #MeToo movement has shone the spotlight on the issue of sexual harassment in businesses. But the focus shouldn't stop there. For a plethora of reasons (employee relations, reputational and regulatory, to name a few) the focus needs to be far wider. Employers that embrace a wider focus when looking at conduct, behaviour, culture and diversity will reap the dividends.

We can assist in four key areas – all of which will assist in preventing issues occurring, and will assist in dealing with issues when they do occur:

1. Policies and documentation review

The first step to achieving a positive workplace culture is to put in place a robust set of policies that set out your commitment to foster an inclusive culture where discriminatory conduct is not tolerated.

The second step is to ensure those policies are underpinned by core responsibilities and expectations by virtue of an umbrella short overview policy or a set of values.

How up to date are your policies? And do they work? We can review and update them for you and advise on how you can bring them to everyone's attention and make them living documents.

2. Training

Raising awareness of inappropriate behaviours and the company's zero tolerance policy is key – not just to reduce the risk of claims, but also to enable staff to assist in pro-actively managing any issues.

We can adapt our workplace culture training to meet the needs of different groups of participants across the whole business. HR and management will also benefit from our scenario-based training on how to manage harassment allegations and related disciplinary processes.

Senior Managers with responsibilities in this area can benefit from our training on what they should be doing to fulfil their responsibilities.

3. Culture audit report

As well as the legal imperative to comply with discrimination legislation, the economic and cultural benefits of diversity have been well researched and reported on. Our culture audit can be broad in scope, covering key stages of the employment lifecycle, and will inform you about any workplace culture or behaviour issues that we believe may be present. We will also advise on any changes that could be made to champion positive changes, to improve conduct, behaviour, culture and diversity within the business.

Before producing our report, which will be covered by privilege, we will review your equality and diversity policies and other relevant information, including non-disclosure agreements, conduct a staff survey and interview key personnel.

4. Investigations

From time to time you may become aware of issues which need to be investigated. We are able to assist with, and in certain circumstances carry out, investigations for you - ensuring independence, rigour and fair outcomes.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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