We delve into the subject of culture within financial services (FS), and how crucial it is for the prevention of activity that either wittingly or unwittingly supports promotes and supports domineering systems of government.
The world we live in today is undoubtedly more interconnected than ever before. In different times, leaders of autocratic regimes would have sought to operate entirely independently. But today, given how globalized we are, this is nigh impossible.
Instead, there will be reliance on outside forces and external parties, who may or may not have been conscious of their compliance. This means that any professional service, including, if not especially banking, will be under increased scrutiny in terms of ensuring that they haven’t in some way, shape or form ‘facilitated’ activities such as Russia’s war on Ukraine.
“We know that there are professions in the UK as well as other countries around the world who have unwittingly – or in some cases deliberately – facilitated the transfer of stolen wealth from oligarchic kleptocratic regimes,” explains Simon Thompson, Chief Executive, Chartered Banker Institute . “What we can clearly see now is that this sort of support for authoritarian regimes ultimately leads to geopolitical and economic instability for all of us. And as such, we need to reflect on the role of the professions and the way that they have behaved over the past two decades. “
Thompson is very much of the opinion that change in approach and true protection against the perils of autocratic states lies in establishing the right culture in organizations whereby every individual is driven by doing the right thing.
The FCA defines culture as the habitual behaviours and mindsets that characterize an organization. It focuses on four key drivers which it can lead to harm: purpose; leadership; approach to rewarding and managing people; and governance.
Deloitte, meanwhile, states that within FS, there are four new and emerging areas of culture that supervisors should focus on. These are:
- Purpose: The reason why a firm exists and the extent to which its purpose is cognisant of, and orientated towards, the outcomes achieved for customers and the market.
- Diversity and inclusion: The extent to which the board, senior managers and wider firms are comprised of individuals from a range of backgrounds, experiences and outlooks.
- Psychological safety: A culture that encourages staff to speak up, sharing opinions and ideas or acknowledging errors, without fear.
- The ‘tone from above’: The behavioral examples and cultural signals being sent by an employee’s immediate manager or supervisor.
This latter point is the most vital when it comes to facilitating autocratic regimes. “Culture is demonstrating tone from the top and supporting younger members as they come to understand our professional norms,” says Thompson.
“We have to ensure that people know that professionalism requires not upholding the law but upholding moral standards. There are some timeless ethical principles that are pretty good guides to what’s right, rather than what’s simply legal. For example, would you be comfortable seeing what you’ve done or the advice you’ve given splashed on the front page of a newspaper? Is this how you advise your mother and your grandmother? These are pretty common sensical when it comes to conducting yourselves within the professions, and they aren’t bad rules for life, either. “