On 4 February 2025, the Financial Conduct Authority (FCA) published a speech delivered by its chief operating officer, Emily Sheppard, on the topic “Culture is contagious” at the 10th Annual Culture and Conduct in Financial Services Summit.

In the speech, Ms Sheppard explains that:

  • Culture drives conduct and decision-making, which directly impact outcomes for consumers, markets and the economy. As a result, it will continue to be a regulatory concern for the FCA.
  • The informed, responsible risk-taking that is required for long-term economic growth must be “built on a strong foundation of healthy firm cultures”, as cultures that encourage open dialogue, constructive challenge and learning from failure, fuel innovation, agility and longer-term success.
  • Non-financial misconduct (NFM) – including behaviours such as bullying, harassment and discrimination – is one of the clearest warning signs of a failing culture, and regulators have an important role to play in tackling these behaviours.
  • The FCA is actively working with stakeholders to drive up culture and conduct standards.

In terms of actions to address concerns around culture, Ms Sheppard notes that:

  • The FCA has been updating its rules and guidance on NFM and expects to set out more detail on its proposed next steps shortly.
  • In relation to diversity and inclusion more broadly, the FCA and the Prudential Regulation Authority (PRA) are considering the next steps following their consultation, including how their work dovetails with planned activity from the Government (e.g. on employment rights, gender action plans and disability and ethnicity pay gaps).
  • Rules and guidance will not be enough on their own and firms will also need to take action when NFM occurs.
  • The FCA is working alongside HM Treasury and the PRA on reviewing the Senior Managers and Certification Regime to make it “even more efficient and effective” and will publish a consultation paper in due course.