The FCA Definitions
A healthy culture is purposeful and safe. For a culture to be healthy, leaders at all levels need to foster an environment in which employees feel comfortable to express their opinions, and crucially, are listened to when they do. Without safety, without an inclusive culture, the huge value of diversity will be lost and diversity becomes unsustainable.
A firm's purpose is its driving force, what it is trying to achieve - its definition of what constitutes success. It is the reason why firms exist, and the motivation for people to go to work for them day in day out.
Driving purposeful cultures
When the Financial Conduct Authority (FCA) released its paper on “driving purposeful cultures” the world was just beginning to experience the impact of Covid-19. The big focus at the time was, the ongoing development of the financial services sector post the Global Financial Crisis in 2008: how have financial institutions acted to ensure the industry was no longer dominated by the profit-first culture of its previous era?
And while that issue is still of utmost importance, the world has moved on yet again. Many employees have been working remotely, with the day-to-day operations of financial institutions looking very different from even 12 months previous. To add to that the wider world is coming to terms with issues of race, identity, ethics and ethical conduct, too, making open cultures integral to safe and purposeful organisations.
In fact, the FCA has seen a 61 per cent increase in the number of complaints relating to the way organisations have handled concerns raised by employees directly with their organisation in the 2019/20 financial year, according to a Freedom of Information request made by law firm Fox & Partners. There is growing awareness about these issues, about the importance of whistleblowing, and the need to ensure policies and programmes are effectively communicated, accessible and are handled correctly.
“When we engage with companies around purpose, we do not tell their leaders what their views should be, nor do we make value judgments about their chosen purpose,” writes the FCA in its “Transforming culture in financial services” report. “Instead, we encourage long-term thinking so that companies do not succumb to short-term pressures to distribute earnings and, in the process, sacrifice investments in employee development, innovation and capital expenditures that are necessary for long-term growth.”
Arguably, the need for long-term thinking with short-term flexibility is essential in the world of Covid-19. Employees - especially those working remotely - need to feel connected to the purpose of an organisation, and those organisations need to work even harder to foster a healthy and safe culture. A remote culture can mean longer hours, it can make bullying more of an issue, and the lack of physical oversight could make fraud a temptation.
The case for openness
An open culture, one that encourages employees to speak up when they see or experience wrongdoing, is essential to a thriving, purposeful organisation. The word “whistleblowing” can bring negative thoughts of accusations and criminal activity, but in reality it's about safeguarding your employees, your customers and your organisation.
In this paper, we look deeper at what an “open culture” means to the FCA, how organisations can encourage it, and the role of speaking up and whistleblowing systems in these types of workplaces. Whistleblowing is all about helping people raise unethical, unsafe or unlawful practices in an organisation, all of which leads to a safer, more productive and more attractive organisation for employees, investors, customers and stakeholders alike.
As a regulated business you know that when the FCA starts talking about organisations creating an “open culture”, any existing talk of such things needs to move swiftly into action. But what exactly is “culture”? It's what surrounds each and every one of us all of the time. Workplace culture is the attitudes, visions, values, belief systems, behaviours and interaction that people in your place of work share – it is a shared way of doing something with passion.
This culture is shaped by, and in turn shapes, many people in many ways. One thing no one can dispute is that if no one actively forms the culture, a culture will be formed that is unlikely to be the one you wanted – and certainly won't gain favour with the regulator.
Why is Safecall talking about this?
We've had more than two decades' worth of experience in this field, working across many sectors, but with a real insight into the additional challenges faced by regulated industries.
Safecall is a whistleblowing service provider that helps organisations establish or enhance a safe and confidential reporting system. Our whistleblowing hotline and online reporting services enable employees to speak up and report their concerns to the highest levels of management within an organisation, doing this anonymously should a person feel it necessary.
All of our call handlers are former police officers with a minimum of 25 years' investigative experience. We have handled tens of thousands of cases on behalf of our clients and their employees over the last two decades. In short: building and encouraging a culture of speaking up in safety is part of our DNA.
Graham Long CEO and Co-Founder
Safecall LTD
On behalf of Safecall, I hope you find this report helpful to create a more open culture in your organisation. As always, my team and I are available to discuss any challenges you face and the solutions we can provide in further detail.
A culture shift is still needed in the world of finance
Culture takes energy, commitment and years to develop; it is not a tick-box regulatory compliance exercise
There was a time, not that long ago, when the financial sector almost broke the world. The 2008 Global Financial Crisis, as it came to be known, was sparked by a profit-first attitude in financial services, and a certain sort of employee who saw the markets as a game to be won.
The finance sector learned a lot from this. It went into a decade of soul-searching. The FCA has done a great deal of research and learning, and its “Transforming culture in financial services” report looks at the impact an open culture can have on financial services organisations.
When the FCA talks of an “open culture”, it means empowering all employees to speak up, to feel safe, to report wrongdoing and unethical behaviour. And that in itself requires a culture shift in many organisations that until very recently were driven by short-term thinking and immediate gain, by shareholder demands, and by market prices. In some cases, and in some organisations, these are still major factors in strategic decisions. In the UK, data from Willis Towers Watson's national norm of UK employee opinion indicates that much work still needs to be done. While 70% of UK employees feel it is safe to speak up in their organisation, the remainder feel it is not; and just over a quarter do not feel able to openly and honestly communicate their views up the chain of command.
“If a strong culture can act as a protective shield for a business when times are tough, a weak or incoherent culture can just as easily lead to rot from the inside,” writes Lucy Jameson for The Guardian. “Culture is the most fundamental way a business approaches its work. It is not about offering yoga lessons and interestfree loans for travelcards. It is both hard and soft: the attitude to the way you do work and the structures and processes that surround it, and in the current environment, it should be considered a priority for leadership.”
Culture takes energy, commitment and years to develop, which means building a purpose-driven business has often fallen by the wayside in the drive for profit. But in an era where so many big businesses have suffered a breakdown in trust from the general public, it's time to make that commitment and invest in the mid and long-term.
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.
