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Annual Review 2017/2018

THE PROFESSIONALISM FORUM

Professionalism – integral to serving the interests of customers, clients and wider society – has been a particular focus of the BSB over the past year. In April 2017 we launched the Professionalism Forum, chaired by Sir Brendan Barber and established to help firms strengthen professionalism in banking.

The Forum brings together BSB member firms, professional bodies and qualification providers, other voluntary standards organisations, trade bodies, academics, regulators, trades unions and other relevant organisations from both within and outside the banking sector. This diversity of participation allows ideas to be aired, challenged and improved from a variety of perspectives. The Forum itself has met three times since its inception, and will convene for a final time in May 2018. It has been supported throughout by a Working Group drawn from both member firms and professional bodies and academics. We are grateful to the following individuals and organisations for their participation in and contribution to the Professionalism Forum’s work:

Advance Union, Aegis Union, Alliance for Finance, The Association of Corporate Treasurers (ACT), Association for Financial Markets in Europe (AFME), Atom Bank, Audacity Associates, Bank of England, Barclays*, Buckinghamshire Building Society, Building Societies Association (BSA), Citi*, City HR, City of London Corporation, CFA UK, Chartered Institute of Credit Management (CICM), Chartered Institute of Internal Auditors (IIA), Chartered Institute of Personnel Development (CIPD), the Chartered Banker Institute*, Chartered Banker Professional Standards Board (CB:PSB)*, Chartered Institute for Securities & Investment (CISI)*, Chartered Institute of Taxation (CIT), C. Hoare & Co., CYBG*, The Co-operative Bank, Financial Conduct Authority (FCA), Finance for Europe, Financial Services Compensation Scheme, Global Association of Risk Professionals (GARP), General Medical Council, HSBC*, Institute of Banking of Ireland (IOB), Institute of Business Ethics (IBE), Ipswich Building Society (IBS), The Institute of Banking, Institute of Chartered and Accountants in England and Wales (ICAEW), Institute of Chartered Accountants of Scotland (ICAS), Institute and Faculty of Actuaries, Institute of Leadership and Management (ILM), Institute of Risk Management (IRM), International Compliance Association (ICA), Law Society of England and Wales, Linklaters, Lloyds Banking Group*, The London Institute of Banking & Finance (LIBF)*, Masthaven, Morgan Stanley*, Nationwide Building Society*, Nationwide Group Staff Union, National Skills Academy for Financial Services (NSAFS), OneSavings Bank & Kent Reliance, Professional Associations Research Network (PARN), Professional Risk Managers International Association (PRMIA), Retail Banking Academy (RBA), Royal Bank of Scotland (RBS)*, Santander*, Shawbrook, Standard Chartered, UK Finance, University of Leeds IDEA CETL*, University of Oxford, Unity Trust Bank, Unite the Union, Young Banker of the Year Finalist.

* Part of the Professionalism Working Group

What is ‘professionalism’?

One of the early challenges for Forum and Working Group members was to define ‘professionalism’ in a sector not generally thought of as comprising a single or traditional profession. Members agreed, in the context of this work, that professionalism comprises ‘the attitudes, judgement and high standards of behaviour, knowledge and skill expected of individuals working in banking’. They also agreed that greater professionalism in banking would help create a sector that, now and in the future, better met the needs and expectations of its customers, clients, members, employees15, the economy and wider society. Professionalism was seen as strengthening both the trustworthiness of the sector and the sense of pride and purpose among those working in it.

A variety of approaches, within and across firms

Our engagement with firms underlined the variety of approaches being used to promote professionalism, both with respect to competence and behaviour. Formal qualifications and training are clearly a central element in this, but informal and on-the-job learning, mentoring, and opportunities to discuss and share thinking with peers are also widely used.

Interventions during the early stages of an individual’s career are considered particularly important by firms. Recruitment processes, induction, onboarding programmes and apprenticeships are used to set the tone and provide a frame of reference for new (and prospective) employees. Some firms engage closely and extensively with professional bodies to set standards and qualification pathways for new employees in particular; others develop their programmes internally, sometimes with accreditation by professional bodies16.

Working Group members also identified a range of factors that they saw as important in supporting an organisational culture that reinforced professionalism. These included the alignment between a firm’s approach and its goals; its expectations of and engagement with its employees; its stated values and the way that employees and senior leaders in particular demonstrated these; and internal and external communications, especially from senior leaders.

  1. The term employees refers to all individuals working in the banking sector.
  2. Many banking sector employees are also of course members of cross-sector professions (e.g. law, accountancy, HR), with associated requirements in terms of qualifications and continuing professional development.
Next steps for the BSB

Each organisation that has taken part in the Professionalism Forum is committed to promoting professionalism, and will be continuing in its efforts after the Forum concludes in May. For the BSB itself, three ideas in particular have already emerged from the discussions that are informing and shaping our ongoing work.

Given the different routes that different firms are taking to strengthen professionalism, and given also the rapidly changing nature of the banking (and financial services) sector in the UK and globally, Forum members expressed support for:

  • establishing a ‘thought leadership’ function that would help the sector strengthen competence and behaviour, both now and in the banking sector of the future;
  • facilitating dialogue, debate and the sharing of good practice across firms; and
  • setting out ‘what good looks like’ in a way that recognised the diversity of potential approaches.

On the first of these, we are creating a new BSB Insights unit that we hope will contribute to the development of the professionalism agenda and to better outcomes across the sector. Details of this new initiative can be found in the New Approaches section later in this Review.

To help facilitate dialogue, debate and the sharing of good practice, we will establish a BSB Member Panel with a rotating membership drawn from among our member firms. This Panel will both inform and challenge the BSB’s own work, and help us ensure that we disseminate this work to and communicate as effectively as possible with all our member firms. We would also look to Panel members to bring perspectives from across their own firms and to share ideas and experience, in order to help identify and develop good practice across the sector.

On the third point — setting out ‘what good looks like’ — we have, with Forum and Working Group members, developed a BSB Statement of Principles to help firms strengthen professionalism.

These principles are deliberately high-level and aspirational. They do not describe the minimum a firm needs to do, but what we would expect of a firm intent on serving its customers well. They are also, as noted, principles for the firm. Many parties involved in promoting professionalism; most importantly, of course, the employee themselves, but also professional bodies, qualification providers and others.

Professionalism is, however, unlikely to be a priority for an employee if it is not one for their employer also. The BSB principles are therefore addressed to firms, and are intended to complement and support the principles or codes for individuals drawn up by professional bodies or, of course, the regulator.

Firms may find these principles useful in testing the breadth and nature of their efforts to strengthen or maintain professionalism, and managers in helping structure conversations with their teams. We are considering whether and what additional guidance, including examples or case studies, would be helpful, and will consider this with the new Member Panel, following the formal conclusion of the Forum.

BSB Statement of Principles for Strengthening Professionalism

The role of the firm
Principle 1: Customers, clients and wider society

Firms should ensure that every individual is motivated and equipped to act in the interests of customers, clients and wider society. This may be achieved by:

  • Communicating to all employees that the long-term sustainability of the firm and serving the interests of customers, clients and wider society are mutually dependent;
  • Ensuring that individuals know how their role contributes to the purpose of the organisation, and to the wider purpose of banking;
  • Considering how social, economic and technological change is likely to affect the provision of banking services and what will be required for professionalism in the future;
  • Making effective use, as appropriate, of apprenticeship schemes, graduate programmes, professional standards, professional qualifications, induction processes and the like to ensure that new recruits   understand the social purpose of banking, have a strong ethical awareness and are encouraged to form attitudes that are conducive to continuous learning;
  • Discussing with staff mistakes or instances of poor behaviour within the firm or the sector and implementing lessons learnt.
Principle 2: Coverage

Activities aimed at strengthening professionalism should include all individuals whatever the stage of their career, including those moving between firms or into or out of the banking sector. This may be achieved by:

  • Ensuring that efforts to strengthen professionalism go beyond traditional banking roles and are relevant to all those within scope of the Individual Conduct Rules (ICRs), across all business lines and functions;
  • Providing enhanced support for, and oversight of, individuals covered by the Senior Managers and Certification Regime (SMCR).
Principle 3: Regulatory Context

Activities aimed at strengthening professionalism should build on relevant regulatory frameworks, in particular the SMCR and ICRs. This may be achieved by:

  • Implementing the SMCR and ICRs consistently, proportionately and fairly and in ways that best support the letter and spirit of these regulations;
  • Working with other firms to achieve consistency of implementation of the SMCR and ICRs across the sector;
  • Ensuring that, where individuals’ behaviour falls short of expectations, there is a fair and transparent process for investigating the circumstances and, where necessary, taking appropriate action;
  • Encouraging individuals to learn from mistakes and share experiences;
  • Sharing appropriate and required information in a timely way with organisations fulfilling roles prescribed by regulation e.g. with professional bodies that issue Statements of Professional Standing.
Principle 4: Learning

Learning and development should meet and go beyond regulatory requirements, encompassing the ongoing strengthening (by a variety of means) of technical knowledge, ethical judgement and people skills. This may be achieved by:

  • Ensuring that leaders at all levels are role models in their behaviour and demonstrate a personal commitment to developing their own technical knowledge, judgement and people skills, and help others do the same;
  • Developing, rewarding and celebrating technical knowledge and skills, good behaviour, ethical judgement and people skills such as leadership, empathy and emotional intelligence;
  • Equipping individuals with the skills to serve their customers and clients well in a rapidly changing sector and technological environment;
  • Establishing and maintaining strong relationships with relevant external bodies (e.g. professional bodies, standards setters and qualifications providers) to ensure that learning frameworks and standards meet current and future needs at the level of the individual practitioner, the firm and the sector;
  • Making effective use, as appropriate, of formal training (such as initial and continuing professional development, including professional qualifications and standards), and other learning opportunities such as mentoring, professional body membership, reflective practice (e.g. through 360˚ and self-review), peer-group discussions, shadowing etc.;
  • Supporting those individuals with specific CPD requirements set by a professional body;
  • Maintaining up-to-date information across the firm on employees’ skills, qualifications and development needs;
  • Ensuring that individuals have the time and encouragement to learn as part of working life, not as an extra-curricular activity on top of a working day.
Principle 5: A culture of openness, honesty, challenge and support

Firms should foster a culture of openness, honesty, challenge and support. This may be achieved by:

  • Cultivating an environment in which individuals are confident to speak honestly and are supported when challenging the behaviour of colleagues;
  • Ensuring that senior staff lead by example in seeking challenge, speaking honestly and fostering a culture of openness and support;
  • Developing appropriate procedures to encourage individuals to speak up in a timely manner, and supporting them when they do;
  • Promoting both diversity and inclusion within the firm, using the drive towards this to ensure that the firm reflects the values of society and supports a culture of openness, honesty, challenge and support;
  • Allowing individuals to exercise appropriate autonomy and to deploy the judgement they have developed;
  • Prioritising the well-being of staff to ensure that they feel confident in performing their roles and in exercising their judgement.
Principle 6: Coherence, efficiency and effectiveness

Initiatives aimed at strengthening professionalism should be coherent, efficient and effective, not only at the level of the firm but across the sector. This may be achieved by:

  • Establishing sponsorship at a board and senior executive level for professionalism activities within the firm;
  • Ensuring consistency between such initiatives and a firm’s purpose and values;
  • Collaborating with other firms to overcome common obstacles to raising standards of professionalism, recognising that different approaches are likely to be suitable for different firms;
  • Contributing to efforts to understand the effectiveness of initiatives aimed at strengthening professionalism, e.g. assessing the links between training/learning inputs and performance outputs and outcomes for customers and clients;
  • Sharing good practice and experience with other firms and encouraging and contributing to cross-sector initiatives to identify good practice, understand future requirements and promote professionalism.
  • Sharing appropriate and required information in a timely way with organisations fulfilling roles prescribed by regulation e.g. with professional bodies that issue Statements of Professional Standing.

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