Conduct and culture in a Covid world
We’ve teamed up with UKGI Compliance to bring you their view of why it’s the right time to review your governance arrangements and culture. While ensuring the wellbeing of staff is clearly paramount for firms as they plan a return to the office, there are other priorities which brokers need to consider and, yes, compliance is one of them.
Here’s what they say:
“More specifically it’s the issue of how well governance and controls operated in the ‘out-of-office-environment’, where many brokers had little choice initially but simply to focus on survival. Brokers will need to consider whether remedial actions are now needed to bring things back on track, and going forward, determine how well governance arrangements will operate in what may very well be a shifting environment, as the threat of further lockdowns remains.
Survival but not at any cost
The stresses on regulated firms is an issue which has not escaped the FCA’s notice and their concern is that a necessary focus on survival may not be just a temporary expediency but could become engrained to the point where it presents risks as culture and conduct considerations could be elbowed out.
This concern is exacerbated by the fact that so many consumers, having been impacted by Covid, may now fall into the vulnerable customer category and, more than ever, will need to be able to rely on the probity and good conduct of their professional advisers.
Businesses do well because of senior management not despite them
It may be a truism, but culture really does come from the top down. Those businesses which had strong leadership, with clear goals and objectives, shared values across all staff and appropriate policies and procedures in place to underpin and execute governance and controls, are likely to have weathered - and to continue to weather - the current crisis best.
The Senior Managers and Certification Regime (SM&CR), with its emphasis on the responsibilities of senior managers to drive and control a business, presented an opportunity for firms to review and strengthen their arrangements. In particular, it focused firms on the appropriate allocation of responsibilities; ensuring the right people were in the right roles and the need for clear and appropriate delegation and reporting across the business. Firms where the board and management knew clearly what their role was and what was expected of them, will have been better placed to deal with the raft of challenges which confronted them when Covid hit.
If it didn’t work fix it – it is never too late to improve
Regardless of whether or not your firm is yet planning a return to the office, if you know that your governance, structure and culture could have been better, now is the time to strengthen your controls, fix what may not have worked well and protect your business, your staff and your customers against what may still lie ahead.
Support for the wearers of many hats
Senior Managers in smaller to medium-sized brokerages wear many hats. When talking to firms about compliance and regulation, culture and governance, it’s important to recognise that these are just some of the many obligations they must meet. But getting your structure and governance right will mean better delegation and an effective sharing of responsibilities which, in the end, pays dividends.”
To help you get there and stay there, Aviva can point you in the direction of external compliance experts such as UKGI that can guide and support. Benefiting from the experience of others and knowing that you are not alone in facing regulatory challenges really can help.
If you’d like an introduction to someone that can help, then please speak to your sales manager or email firstname.lastname@example.org.
And if you missed our recent compliance-based webinar that covered hot topics such as Brexit, new sources of business, pricing, regulatory expectations, training & competence and more, then you can catch up on this valuable session here: https://bit.ly/3knvCgF
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