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Blog series – Clare Woodman

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…

Over the past several years, regulators and the banking industry have worked extensively to restore financial stability through a series of mechanisms and rules which establish appropriate levels of capital, liquidity and leverage. These actions have been immensely effective in improving the safety, soundness and resiliency of firms. However, post-crisis episodes have presented challenges to cultural behaviours and demanded a second wave of reform – addressing less tangible and less easily identifiable structures of trust.

Risk, credit, duty and trust have always formed central pillars to commercial progress. Understanding how an organisation may earn and manage trust is an important business imperative both to operate and to succeed. Absent trust, business slows and becomes more costly. Heightened trust can drive the economy, and an individual firm’s performance. Trust underpins relationships, attitudes and behaviours. It allows a company to attract the best and the brightest people, to foster multi-decade growth and to retain a loyal client base.

Trust in banking is especially important. Financial organisations must not only safeguard the interests of their clients, shareholders and employers, but also share a higher responsibility to support and enrich societal growth. Banks are vital to the functioning of the broader economy. Greater trust in the banking industry brings greater commerce, culture and community.

Trust cannot be bought. It is hard won, easily lost and must be earned by demonstrating trustworthiness. Echoing my fellow Board Member Onora O’Neill’s recent remarks, simply to lobby for greater trust in banking is not sufficient. We must instead ‘aim to have more trust in the trustworthy’.

How do we become more trustworthy? Like anything, behaviour is an imprint of repeated patterns of practice. If we are prescriptive in our organisational design, we can manage cultures of trust and, in turn, become more trustworthy.

  • Leadership: Leaders must be transparent and articulate a strategy clearly anchored to values. There must be alignment between visions espoused and those enacted. Values should be both deep-set and easily explained. Role models should authentically set the tone from the top, celebrate success, amplify best practice, and champion reform.
  • Governance: Architecture of policies, practices and procedures can either stifle or encourage behaviours. Prudent governance should define operational parameters, set minimum standards and be tested periodically.
  • Accountability: To engender trust, you must demonstrate accountability. Intellectual rigour, challenge and diversity of thought form the core foundation to any successful business. Operating within increasing realms of change and complexity, it has never been more important for individuals to be tooled to make informed and ethical decisions. All employees are equal standard bearers and guardians of a company’s brand.

Warren Buffett famously explained, ‘In looking for people to hire, look for three qualities: integrity, intelligence, and energy. And if they don’t have the first, the other two will kill you’. Integrity is everything. Do the right thing and all else will fall into place.

Clare Woodman, Global Chief Operating Office, Institutional Securities, Morgan Stanley International

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.


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.


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.



If your bank/building society has not responded adequately, or in time, to a complaint that you have already made, you can register your complaint with the Financial Ombudsman Service. Which offers a guide on consumer rights when taking a complaint to the Financial Ombudsman Service.


If you have a problem or query relating to your financial affairs, or are seeking personal finance advice or guidance, there is free, impartial information available from the following organisations:


If you work in the financial services industry and are concerned about any activities conducted by your employer or any other firm or individual, you may find the Financial Conduct Authority and the Prudential Regulation Authority's guidelines on whistleblowing helpful. It explains what constitutes whistleblowing, and what procedures are in place to respond to blow the whistle and how your anonymity would be protected. Public Concern at Work, the whistleblowing charity, also offers support and advice to individuals and employers about how to report concerns and how to establish whistleblowing frameworks.


If you are seeking the services of an independent financial adviser, Unbiased may be able to help, or if you are looking for more general financial guidance, the Money Advice Service may be a useful place to start.