Culture Club

“I’m a man without conviction. I’m a man who doesn’t know”

So sang Boy George in his seminal 80’s hit Karma Chameleon. Whilst a little more certainly might have been expected from the regulator, you can almost see Andrew Bailey, FCA Chief Executive, donning the big hat and ringlets and singing the same.

When it comes to the question of firm culture, FCA is in a dilemma. FCA knows it’s important, and knows what it doesn’t like. But beyond that, FCA too is without conviction. Or at least, without strong ones.

FCA’s March Discussion Paper DP DP18/2 “Transforming Culture in Financial Services” crystallises this approach. Careful not to legislate what good culture looks like, instead FCA gives air space to an assortment of firms, academics and other regulators to give their views of what firm culture should be.

Some of the firms held up for emulation in this paper have already come spectacularly to grief for more on this, see our article on the May Compliance Monitor here.

But for all its uncertainty, FCA is clear that whatever culture is, firms need to address it. DP18/2 offers “actionable insights”, they say. So it’s timely that Board’s should take time out from the day to day and consider this more profound question, and then take action.

Contributors to DP18/2 quote the management guru Peter Drucker, who said “culture eats strategy for breakfast.” It’s no good having a great strategy if your culture is wrong. Thus the firm falls victim to its own bad culture.

As Boy George also said, “the victims, we know them so well.”


As the Test series against Australia kicks off this summer, Boards may find it useful to look at the question of firm culture through the prism of sport and in particular the Australian ball tampering scandal of March this year.

Here was a team of top performers, brought to their knees by a cultural issue that pervaded the organisation. There were implications for individuals throughout the hierarchy, from board members down to players.

Fulcrum Compliance has developed a short briefing session that brings these points home, using these examples. If you think this might be a useful agenda items for your next Board meeting, get in touch.


It has been a busy time for FCA in additional to all of the above, they also released a Guidance Consultation (GC18/2 “Fairness of Variation Terms”) which looked at the ability of firms in their Terms of Business to unilaterally vary conditions, often for reasons set out in non-exhaustive lists. Such clauses are likely to be unfair. In addition FCA published a further list of terms similarly likely to fall foul of the Consumer Rights Act 2015.

Firms will already have considered their contract Terms and Conditions for MiFID II amendments. FCA recommends further regular reviews of these documents to check for unfair terms.


Our thanks to all of you who accepted our invitation to re-subscribe to this Newsletter. We were gratified to have had nearly a 25% conversion rate from our initial mailing. We will now be able continue to provide you with timely reminders and insights into FCA thinking.


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