Leading in the new regulatory world
A new research report on the role of leadership in creating an ethical high performance culture in financial services
By Erica Sosna, Leadership Consultant
The great financial crisis of 2008 – 2009 may be over, but the aftershocks are still being felt. Governments around the world are taking a hard look at the guidelines and regulations they are imposing on financial firms, trying to ensure that a patchwork of country-level regulations add up to a coherent system of controls to prevent another global financial meltdown.
The associated shifts taking place in financial services are significant. With punitive fines being issued for mis-selling, non-compliance and rate fixing – the banking sector in particular is under close scrutiny with regard to its ethics, integrity and customer-focus.
Strong leadership at all levels will be required to drive the shift in cultures, behaviors and mind-sets needed to restore customer trust, public confidence and engender ‘ethical high performance’.
BlessingWhite’s latest report explores the current challenges facing leaders in financial services and provides guidance from the perspective of leadership development, learning and culture change.
We provide practical recommendations for how leaders can navigate the environment and deliver on a business that is both principled and profitable.
The report is organized around three major themes:
“Paralysis in the Face of Complicity and Uncertainty” – The challenge of ever-evolving regulation, along with the variety of stakeholders, cultures, product and services in question has caused considerable disquiet about how to establish meaningful controls, checks and balances on the behavior of a minority of individual financial services employees.
“Reputation, Relationship and Risk” – There is a co-dependence and a risk as the sectors’ reputation can only improve at the rate of the slowest to conform. This means partnership, collaboration and trust are fundamental to everyone’s future success and the stability of the sector itself.
“Right People, Right Drivers, Right Action” – Leaders need to consider what talent they need to guarantee a profitable and sustainable future. With increased scrutiny of bonuses, incentives and rewards, there is an opportunity to change the way we reward and recognize performance and therefore drive different behaviors. We also explore how learning can play a part in shifting behavior, performance and the culture.
The team details 10 key issues and 10 related recommendations for organizations facing a newly regulated environment, and spells out 4 best practices that every organization should follow. To help us understand, we held a focus group with 15 financial services professionals and interviewed 21 senior individuals from 21 different global financial service organizations.
The focus of our report is on financial services with a special emphasis on the UK and the City of London. This said, the insights and recommendations offered may be useful to leaders in other industries where regulation, compliance and quality are significant to business practice and performance.
Download “Leading in the new regulatory world” at www.blessingwhite.com/research.