Blogs

Derek Bishop

Director

Strengthening accountability

Date added: 05th Mar 2015
Category: Organisational Culture Change

The public and the regulators are looking for businesses to embrace a new and ethical way which values customer care, which strives for excellence and which accepts that when errors occur they are acknowledged, swiftly rectified and turned into valuable learning points.

Where does the ‘buck stop’ in your organisation?  Who is responsible, who can be held accountable for failings? Do team members play a glorious game of ‘not me and pass it on’ or is someone nominated to take the blame, regardless of fault?  And when errors occur, are they treated as ‘one-off’ nuisances whilst the organisation carries on with existing policies and practices regardless?

Now let’s turn the scenario around.  Is your organisational culture one in which everyone strives everyday for excellence and great customer service?  Is everyone constantly vigilant against the possibility of failings and do they take delight in innovating solutions which will further strengthen the offering?  When mistakes occur, are they openly admitted, instant redress sought and then treated as learning points with solutions devised to prevent not only those mistakes but other similar ones in the future?

In reality, most organisations probably muddle along somewhere between the two but, also in reality, unless organisations strive towards creating a strong culture then there is a real and present danger that they will slide towards a toxic one.  Industry pressure, the desire to outperform your peers in terms of turnover or profitability, a drive for expansion; whatever the reason, however laudable it may seem at the time, as soon as the culture shifts away from putting customer excellence first then it is on the slippery slope towards toxicality.

In an ideal world, every organisation would maintain such a strong culture that the need for regulation would be minimal.  That’s certainly the ambition of the Financial Conduct authority which on a number of occasions has stressed the need for a culture change in financial services towards one in which businesses continue to do right even when the regulator isn’t watching.  But because we don’t live in an ideal world there have to be rules and regulations, guidelines and best practices which encourage a move towards strongly ethical cultures.

One such measure is the FCA’s move towards strengthening accountability in banking.  Following joint FCA/PRA consultations in 2014, the Treasury has announced that the “commencement date for the new Senior Managers and Certification Regime (SM&CR) will be 7 March 2016.”  A full roadmap and timetable will be published later in March 2015.

The measures are designed to “strengthen the accountability of bank senior management and to raise standards of individual conduct in the banking sector.”  Taken overall the measures will require firms to:

  • Clarify lines of responsibility
  • Assess the fitness and propriety of staff who are in a position in which the decisions they make could pose significant harm to the organisation or its customers
  • Abide by agreed standards of behaviour

Whilst these measures are aimed at the banking sector they could equally apply to any organisation.  Conversely, those organisations which maintain a strong culture which encompasses behavioural standards, customer focus and ethical decision making will already have equivalent measures embedded within their cultural DNA.    Financial sector or not, what is increasingly clear is that the public and the regulators are looking for businesses to embrace a new and ethical way which values customer care, which strives for excellence and which accepts that when errors occur they are acknowledged, swiftly rectified and turned into valuable learning points.

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