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Annual Review 2016/2017

II: THE 2016 ASSESSMENT & EVIDENCE

Assessment exercise

Having piloted an approach based around focus groups, interviews and board questions with ten firms in 2015, the BSB conducted its first full Assessment in 2016.

22 member firms took part in the 2016 Assessment. Of these, 14 participated in the full Assessment exercise (both quantitative and qualitative), with eight taking part in the Survey component only.

The 22 firms that took part in the Assessment are below. The 14 firms that participated in the full Assessment exercise (both qualitative and quantitative) are highlighted in blue:

  • Airdrie Savings Bank
  • Bank of Ireland UK
  • Barclays
  • Buckinghamshire Building Society
  • Cambridge & Counties Bank
  • Charity Bank
  • Citi
  • Handelsbanken
  • HSBC Bank
  • Ipswich Building Society
  • Lloyds Banking Group
  • Morgan Stanley International
  • Nationwide Building Society
  • Paragon Bank
  • Penrith Building Society
  • Principality Building Society
  • RBS
  • Santander UK
  • Standard Chartered
  • State Bank of India
  • The Co-operative Bank
  • Virgin Money

The five parts of the Assessment in 2016 were:

  • BSB Employee Survey 2016: the Survey consisted of 37 questions, set out below. Each relates to one of the nine characteristics of the BSB framework, and the questions test both observations and beliefs. To reduce acquiescence bias, the questions were phrased both positively and negatively and (apart from a standard set of questions at the start and the end) asked in a randomised order. Respondents were not aware of which question related to which characteristic. The Survey was run in all firms on a stand-alone basis (i.e. not combined with an internal staff survey or any other exercise) to avoid firm-specific framing effects that might bias answers. The BSB worked with each firm to identify sample sizes sufficient to produce statistically representative results across different business lines and functions. The survey was sent to c.82,000 staff at all levels across the UK, and more than 28,000 responses were received.
  • Board questionnaire: a small number of high level questions about the firm’s purpose and culture were sent from the BSB Chairman to the Chairman of each firm.
  • Board member (non-executive) interviews: 26 non-executive directors were interviewed to gain a better understanding of their perspectives on their firm’s purpose and culture, as well as any relevant contextual factors. Those interviewed in 2016 included Chairmen of Remuneration Committees and/or of Culture (or related) Committees.
  • Executive interviews: interviews were held with 114 senior staff. As part of this, and prior to the Survey results being shared, interviewees were asked to position their firm – where it was, and where they thought it should be – on a range of issues relating to the BSB Assessment characteristics. The interviews then explored possible causes for specific themes emerging from the Survey results, and included a more general discussion to understand the context at each firm.
  • Focus groups: 104 focus groups involving more than 800 junior and middle-ranking staff provided the opportunity to explore potential causes of firm-specific issues (including both challenges and strengths) emerging from the Survey data, and to draw out differences and similarities between firms to inform sector-wide analysis.

Each firm received its own Survey results, including (assuming that response rates were high enough to be statistically representative of the relevant populations, and where at least seven firms could be compared), comparisons of its scores on each characteristic and question against a benchmark made up of all participating firms.

Comparisons in each case included a rank and quartile against the equivalent category across all relevant firms, though without revealing the identity of any individual firm. The results for retail banking at Firm A, for example, were compared with those for retail banking at all those assessed firms with a retail banking business.

Those firms that took part in both the Survey and the qualitative elements of the full Assessment received a more extensive report containing the fuller findings and analysis.

We will review and, as appropriate, refine the Survey questions in the light of this first year’s experience. The Survey overall (and the nine characteristics of the underlying framework) will, however, remain consistent to allow a dynamic picture to be built up over time, both at the individual firm level and across and within firms. The qualitative elements of the Assessment may, in contrast, vary from year to year depending on the themes explored and the most appropriate way of approaching these.

We will also, as the Assessment work develops, introduce or pilot new approaches and measurement techniques and incorporate additional firm or third-party information, to ensure that the exercise remains as valuable as possible for firms and their employees, customers, members and clients.

Survey questions
HONESTY

Q1: ‘I believe senior leaders in my organisation mean what they say’

Q2: ‘In my organisation I see instances where unethical behaviour is rewarded’

Q3: ‘My colleagues act in an honest and ethical way’

Q4: ‘It is difficult to make career progression in my organisation without flexing my ethical standards’

RESPECT

Q5: ‘At my work I feel that I am treated with respect’

Q6: ‘At my work people seek and respect different opinions when making decisions’

Q7: ‘In my organisation Risk and Compliance are both respected functions’

Q8: ‘In my organisation we are encouraged to follow the spirit of the rules (what they mean, not just the words)’

Q9: ‘I believe my organisation puts customers at the centre of business decisions’

OPENNESS

Q10: ‘In my experience, people in my organisation are truly open to review and feedback from external sources’

Q11: ‘In my organisation, people are encouraged to provide customers with information in a way that helps them make the right decisions’

Q12: ‘In my experience, people in my organisation do not get defensive when their views are challenged by colleagues’

Q13: ‘In my organisation I am encouraged to share learnings and good practices with others’

Q14: ‘If I raised concerns about the way we work, I would be worried about the negative consequences for me’

ACCOUNTABILITY

Q15: ‘I clearly understand the behavior that is expected of me’

Q16: ‘I believe senior leaders in my organisation take responsibility, especially when things go wrong’

Q17: ‘I see people in my organisation turn a blind eye to inappropriate behaviour’

Q18: ‘I see people in my organisation try to pass responsibility to others in case things go wrong’

Q19: ‘I feel comfortable challenging a decision made by my manager’

COMPETENCE

Q20: ‘In my experience, people in my organisation have the skills and knowledge to do their jobs well’

Q21: ‘In my role, I am encouraged to continually learn new skills and improve my role-specific knowledge’

Q22: ‘I feel confident in my ability to identify risks in my area’

RELIABILITY

Q23: ‘When my organisation says it will do something for customers, it gets done’

Q24: ‘I see the people I work with go the extra mile in order to meet the needs of our customers’

Q25: ‘When people in my organisation say they will do something, I can rely on them getting it done’

RESILIENCE

Q26: ‘In my experience, people in my organisation are good at dealing with issues before they become major problems’

Q27: ‘My organisation focuses primarily on short term results’

Q28: ‘I often feel under considerable pressure to perform in my work’

Q29: ‘Working in my organisation has a negative impact on my health and well-being’

RESPONSIVENESS

Q30: ‘I believe that my organisation responds effectively to staff feedback’

Q31: ‘Our internal processes and practices are a barrier to our continuous improvement’

Q32: ‘I believe that my organisation responds effectively to customer feedback’

Q33: ‘I believe that my organisation encourages innovation in the best interests of our customers’

Q34: ‘I have observed improvements in the way we do things based on lessons learnt’

SHARED PURPOSE

Q35: ‘My organisation’s purpose and values are meaningful to me’

Q36: ‘There is no conflict between my organisation’s stated values and how we do business’

FREE TEXT QUESTION

Q37: What 3 words would you use to describe your organisation?

Overview of the Assessment process in 2016

28,122
survey responses received
22
firms surveyed
14
firms fully assessed
800
members of staff interviewed from 104 focus groups
114
executive interviews carried out
26
non-executive interviews carried out

Assessment evidence

Our methodology

Interpreting our charts

This review presents the distribution of firm and business area scores for each of the nine characteristics being assessed, as well as for three clusters of questions that focus on customer focus, speaking up and senior leadership

The review presents a weighted average of the responses from all participating banks and building societies to each Survey question

Q1:
‘I believe senior leaders in my organisation mean what they say’
Strongly agree
Somewhat agree
Neutral
Somewhat disagree
Strongly disagree

Results by characteristic

Honesty: ‘Speaking and acting truthfully and ethically’
Q1:
‘I believe senior leaders in my organisation mean what they say’
Q3:
‘My colleagues act in an honest and ethical way’
Strongly agree
Somewhat agree
Neutral
Somewhat disagree
Strongly disagree
Q2:
‘In my organisation I see instances where unethical behaviour is rewarded’
Q4:
‘It is difficult to make career progression in my organisation without flexing my ethical standards’
Strongly agree
Somewhat agree
Neutral
Somewhat disagree
Strongly disagree
Note: As these are negatively phrased questions, the key is reversed so that the most favourable responses (i.e. positive) are green
Respect: ‘Due regard, care and consideration for colleagues and customers’
Q5:
‘At my work I feel that I am treated with respect’
Q6:
‘At my work people seek and respect different opinions when making decisions’
Q7:
‘In my organisation Risk and Compliance are both respected functions’
Q8:
‘In my organisation we are encouraged to follow the spirit of the rules (what they mean, not just the words)’
Q9:
‘I believe my organisation puts customers at the centre of business decisions’
Strongly agree
Somewhat agree
Neutral
Somewhat disagree
Strongly disagree
Openness: ‘Open to internal challenge and external review and to sharing ideas and good practices’
Q10:
‘In my experience, people in my organisation are truly open to review and feedback from external sources’
Q11:
‘In my organisation, people are encouraged to provide customers with information in a way that helps them make the right decisions’
Q12:
‘In my experience, people in my organisation do not get defensive when their views are challenged by colleagues’
Q13:
‘In my organisation I am encouraged to share learnings and good practices with others’
Strongly agree
Somewhat agree
Neutral
Somewhat disagree
Strongly disagree
Q14:
‘If I raised concerns about the way we work, I would be worried about the negative consequences for me’
Strongly agree
Somewhat agree
Neutral
Somewhat disagree
Strongly disagree
Note: As these are negatively phrased questions, the key is reversed so that the most favourable responses (i.e. positive) are green
Accountability: ‘Willing to take responsibility for actions, behaviour and decisions’
Q15:
‘I clearly understand the behavior that is expected of me’
Q16:
‘I believe senior leaders in my organisation take responsibility, especially when things go wrong’
Strongly agree
Somewhat agree
Neutral
Somewhat disagree
Strongly disagree
Q17:
‘I see people in my organisation turn a blind eye to inappropriate behaviour’
Q18:
‘I see people in my organisation try to pass responsibility to others in case things go wrong’
Strongly agree
Somewhat agree
Neutral
Somewhat disagree
Strongly disagree
Note: As these are negatively phrased questions, the key is reversed so that the most favourable responses (i.e. positive) are green
Q19:
‘I feel comfortable challenging a decision made by my manager’
Strongly agree
Somewhat agree
Neutral
Somewhat disagree
Strongly disagree
Competence: ‘Knowledge and skills to do the job well’
Q20:
‘In my experience, people in my organisation have the skills and knowledge to do their jobs well’
Q21:
‘In my role, I am encouraged to continually learn new skills and improve my role-specific knowledge’
Q22:
‘I feel confident in my ability to identify risks in my area’
Strongly agree
Somewhat agree
Neutral
Somewhat disagree
Strongly disagree
Reliability: ‘Consistently meeting external and internal commitments’
Q23:
‘When my organisation says it will do something for customers, it gets done’
Q24:
‘I see the people I work with go the extra mile in order to meet the needs of our customers’
Q25:
‘When people in my organisation say they will do something, I can rely on them getting it done’
Strongly agree
Somewhat agree
Neutral
Somewhat disagree
Strongly disagree
Resilience: ‘Personal & organisational capacity to recover quickly from difficulties and shocks’
Q26:
‘In my experience, people in my organisation are good at dealing with issues before they become major problems’
Strongly agree
Somewhat agree
Neutral
Somewhat disagree
Strongly disagree
Q27:
‘My organisation focuses primarily on short term results’
Q28:
‘I often feel under considerable pressure to perform in my work’
Q29:
‘Working in my organisation has a negative impact on my health and well-being
Strongly agree
Somewhat agree
Neutral
Somewhat disagree
Strongly disagree
Note: As these are negatively phrased questions, the key is reversed so that the most favourable responses (i.e. positive) are green
Responsiveness: ‘Ability to adapt and innovate’
Q30:
‘I believe that my organisation responds effectively to staff feedback’
Q32:
‘I believe that my organisation responds effectively to customer feedback’
Q33:
‘I believe that my organisation encourages innovation in the best interests of our customers’
Q34:
‘I have observed improvements in the way we do things based on lessons learnt’
Strongly agree
Somewhat agree
Neutral
Somewhat disagree
Strongly disagree
Q31:
‘Our internal processes and practices are a barrier to our continuous improvement’
Strongly agree
Somewhat agree
Neutral
Somewhat disagree
Strongly disagree
Note: As these are negatively phrased questions, the key is reversed so that the most favourable responses (i.e. positive) are green
Shared purpose: ‘A fundamental purpose that is shared across the organisation’
Q35:
‘My organisation’s purpose and values are meaningful to me’
Q36:
‘There is no conflict between my organisation’s stated values and how we do business’
Strongly agree
Somewhat agree
Neutral
Somewhat disagree
Strongly disagree

Results across a number of characteristics

Speaking up
Q12:
‘In my experience, people in my organisation do not get defensive when their views are challenged by colleagues’
Q14:
‘If I raised concerns about the way we work, I would be worried about the negative consequences for me’
Q19:
‘I feel comfortable challenging a decision made by my manager’
Strongly agree
Somewhat agree
Neutral
Somewhat disagree
Strongly disagree
Senior leaders
Q1:
‘I believe senior leaders in my organisation mean what they say’
Q16:
‘I believe senior leaders in my organisation take responsibility, especially when things go wrong’
Strongly agree
Somewhat agree
Neutral
Somewhat disagree
Strongly disagree
Customers
Q9:
‘I believe my organisation puts customers at the centre of business decisions’
Q11:
‘In my organisation, people are encouraged to provide customers with information in a way that helps them make the right decisions’
Q23:
‘When my organisation says it will do something for customers, it gets done’
Q24:
‘I see the people I work with go the extra mile in order to meet the needs of our customers’
Q32:
‘I believe that my organisation responds effectively to customer feedback’
Q33:
‘I believe that my organisation encourages innovation in the best interests of our customers’
Strongly agree
Somewhat agree
Neutral
Somewhat disagree
Strongly disagree

PREVIOUS SECTION: THE BSB & ITS APPROACH

NEXT SECTION: POLICY WORK 2016

Senior Managers and Certification Regime

Exploring how the SMCR - and especially Certification - can be implemented in the most effective way across the sector.

The Senior Managers and Certification Regime is a major regulatory change that will affect all banks and building societies. Responding to recommendations by the Parliamentary Commission on Banking Standards, the government and regulators have together developed a comprehensive framework to ensure better accountability and responsibility for behaviour, competence and culture in banks and building societies. The new framework provides an opportunity for the industry to focus on and demonstrate a culture of professionalism. We are working with firms and regulators to facilitate this, including areas where a common approach across firms could support both the objectives of the regime and the skills and development of the people covered by it.

Professionalism

Evaluating whether a more 'professional' approach to banking would improve behaviour and competence across the industry.

The Parliamentary Commission on Banking Standards found that 'banking culture has all too often been characterised by an absence of any sense of collective responsibility to uphold the reputation of the industry', and argued that a greater focus on professionalism could be an answer to this. Working with a leading team at the University of Leeds, we are researching the issues around professionalism in banking. In particular, we are reviewing how professional qualifications are currently used across the sector, and at whether a stronger role for professional bodies, along the lines seen in some other sectors, like medicine or law, would help raise standards. To inform this work and develop a rounded picture of 'professionalism' and what it means in banking, we are surveying banks and building societies, professional bodies and a wide range of other interested groups, including consumer bodies and investors.

Assessments

Providing an honest and impartial assessment to Boards of progress against objectives on behaviour, competence and culture.

The BSB assessment exercise presents Boards with an objective and impartial view of their firm's culture, identifying where things are working well and recommending areas for improvement. It draws on information not only from Boards and senior teams, but also from employees, investors (or members), trade unions, customer groups and other relevant bodies. In doing so, it will provide constructive challenge to each firm individually, while building a collective understanding of common issues across the industry, or sectors within it. We undertook our first annual assessment exercise in 2015 with ten firms (Barclays, Citi, HSBC Bank, Lloyds Banking Group, Metro Bank, Morgan Stanley International, Nationwide, RBS, Santander UK and Standard Chartered). The BSB itself will not publish individual assessment reports - each firm owns its own report - but key themes and messages will be set out in the BSB's annual report, the first of which will be published in Spring 2016. Given that Board engagement is central to the assessment work, only firms that have their headquarters in the UK are eligible for the full assessment exercise. All firms, including branches of firms headquartered overseas, will however be included in a focused membership-wide survey, which will allow each participating firm to benchmark itself against its peer group.

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HAS YOUR BANK FAILED TO RESPOND ADEQUATELY TO A COMPLAINT?

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