Emily Sheppard, Chief Operating Officer and Executive Director of Authorisations at the FCA, has reiterated the need for firms to focus on culture to meet evolving regulatory expectations under Consumer Duty.
Speaking at the Westminster Business Forum on 26 June 2023, Sheppard outlined that: “culture remains central to [the FCA’s] supervisory model. It is what underpins outcomes – firms with healthy cultures will be best equipped to adapt to a changing world and to consumers with changing expectations.” [1]
Firms were also reminded that – from the FCA’s perspective – culture underpins conduct and therefore business performance and confidence.
With Consumer Duty coming into force on 31 July 2023, Sheppard outlined the need for firms to think about culture in a more qualitative way, expressing that: “culture is not just a slogan on your website. It is the very essence of what your organisation stands for, embodied by how it conducts itself.”
Firms were again reminded that boards and senior management will have to ‘embed a culture in which good outcomes for consumers is central’. Making specific reference to the “people” aspects under Consumer Duty, Sheppard reiterated the requirement for firms to increase their focus on ‘people management policies and practices, including performance management’.
Referring to millennial and Gen Z employees, Sheppard was also keen to highlight the increasing need for firms to offer opportunities for upskilling and development in order to attract and retain talent. Referencing a recent Workplace Intelligence study, Sheppard noted that 74% of millennial and Gen Z employees stated they would quit a job in a year if there was no opportunities for development and upskilling.
With reference to tackling misconduct in wholesale markets, firms were again reminded of the critical importance of being more proactive in tacking undesirable behaviours, with Sheppard noting that the ‘best predictor of future behaviour is past behaviour’.
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