The FCA’s ‘100 flowers’ discussion paper

“Culture and governance is a priority,” stresses the Financial Conduct Authority. Yet pinning down how to repair and sustain positive beliefs and behaviours within firms is far from straightforward. The regulator’s latest treatise on the subject borrows a little from a brief liberal period of Chairman Mao, writes Julian Sampson.

Julian Sampson(julian@fulcrumcompliance.com) is director of Fulcrum Compliance (www.fulcrumcompliance.com) and was chair of the Chartered Institute for Securities and Investment compliance professional forum from 2009-2015.

Culture in regulated firms is important – we all know that. As the FCA says in the very first words of its March discussion paper 18/2 (‘Transforming Culture in Financial Services’), “Culture in financial services is widely accepted as a key root cause of the major conduct failings that have occurred within the industry in recent history, causing harm to both consumers and markets.” This DP follows directly from a long line of previous cultural initiatives from the FCA and other policy makers – we can all remember ‘Tone from the Top’, ‘Treating Customers Fairly’ and ‘balanced score cards’ – all of which were (and remain) regulatory initiatives or themes designed to address an aspect of firm culture.