On 25 May 2018, the FCA published a document following its March 2018 transforming culture conference. The document summarises some of the themes that were reflected in the discussions in the conference. The ideas expressed do not represent the FCA’s views but provide some further perspectives on the issues covered in its earlier discussion paper on transforming culture in financial services.
The issues covered in the document include:
- What constitutes a good, healthy culture for financial services?
- What role should regulators and regulation play in managing culture?
- Remuneration and beyond – what are the most powerful motivators of behaviour?
- How can we deliver real cultural change in financial services?
The FCA reports that from the dialogue and the conference discussions it has identified 4 key thematic lines of enquiry:
- Psychological safety over fear: (i) What role does psychological safety play in promoting healthy and inclusive cultures? (ii) How can this be promoted most effectively?
- Remuneration and incentives: (i) What implicit behaviours are being driven by bonus cultures? Are there better approaches to compensation? What non-financial incentives can be used to motivate performance?
- Leadership and management capabilities: (i) What is needed to support leaders, including middle management, to cultivate healthy cultures? (ii) How can these skills be better recognised as a management discipline?
- Assessing culture: (i) What does effective assessment or measurement of cultural indicators look like within firms? How should measurement be used?