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Blog series – Robin Bailey

In advance of our event at the Bank of England on 21 March 2017, we asked interested parties to write on the theme: Worthy of trust? Law, ethics and culture in banking…

 

From my experience the key to establishing a culture that has integrity and becomes engrained throughout the whole organization starts with the Board displaying a passion and ownership and determination for having a culture respecting the requirements of the Law and Regulation but going beyond that in “doing the right thing” for its employees and customers. It is however significantly reliant on the CEO and the Senior Team relating to that ambition and continually demonstrating those behaviours required in the day to day operations of the Company.

There need be no conflict between a High Performing culture and an embedded ethical approach. I have found that where an ethical culture is encouraged based on clear objectives, clear values, mutual respect and trust for and from the leadership, that business success invariably follows.

Culture is a complex mix of collective and individual attitudes and behaviours and requires a comprehensive oversight. The overlapping moral codes between ingrained principles, social conscience,and strict adherence to rules all need to be recognised. Strong negative contributors can have an undue influence on individuals and localized teams particularly when this is allied to positional power. Sub cultures can easily arise as a result.

Having a set of key Corporate values and operative beliefs that everyone in the organization can recognize and expect others to work to will restrict the opportunity for this to occur but there is still a need for reinforcement through visible leadership and formal and informal policies and intervention is required when dissonance is evident.

To avoid rupture of the culture during periods of Company stress the purpose and strategy need aligning to the expected Corporate behaviours from the outset as its easy to de-prioritise it when financial underperformance dictates more urgent issues to address. Equally when performance is good attention to maintaining a focus on cultural coherence and identity may be deemed a low priority as it might be seen as a “soft” attribute.

To keep momentum Board and Senior Management need access to a wide variety of measures and actions both internal and external and these should to be integrated into formal Board reports. This will enable the Board to spot inconsistencies.

These measures and actions can be broken down into three categories.

Affirming key values, such as ad hoc visits/coffee mornings by NEDS with a range of staff without Executive presence, Internal Audit comments on positivity of staff to support their work, incentives aligned to behavioural objectives.

Consistent Behaviours, such as adherence to Risk Appetite, Customer feedback, staff surveys , supplier surveys.

Reinforcing strategies, such as behavioural recognition schemes, treatment of customer complaints, analysis of absenteeism and leavers.

Through the SMR, Chairs and CEOs have specific responsibility for the Cultures that are created. Highly cost effective anonymous staff surveys through the BSB are exceptionally valuable to enable benchmarking across the industry and identify specific areas for further analysis. At the Buckinghamshire we fully intend to continue with these as it showed we currently have a set of values that our staff strongly relate to, it will give us trends over time to enable intervention where necessary, and it will demonstrate whether our culture is giving us a competitive edge.

Robin Bailey, Chairman, Buckinghamshire Building Society