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Blog series – Susan Rice

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…


A three-legged stool – that’s how I see the relationship between law, ethics and culture in an organisation.

Wearing two hats, one as chair of the Chartered Banker: Professional Standards Board (CB:PSB) and the other as a Board member of the Banking Standards Board, I think a great deal about trust in banking. With the CB:PSB, we’ve developed standards of broad knowledge and professional behaviour that we should expect of every banker. In the BSB, we’re prompting conversations at the highest levels in member banks about the culture of their organisations, about how things are actually done.

These initiatives matter because trust can’t be regulated. It isn’t something we can add to online training for colleagues. We can’t neatly slot it into a business plan. Trust can only be bestowed by others, it has to be earned.

I’m often asked how long it will take to restore trust in banking, or when the culture in banks will change for the better. These questions are important and complex, begging a short treatise by way of response. Since I’m not about to write a treatise, however, this is where the three-legged stool comes in.

Typically we’ve judged banks based on short-term financial performance – quarterly capitalism – sometimes even on spot numbers. In other words, we measure outputs. And link ongoing performance to capital or a similar financial surrogate for longevity. One leg of a stool.

We also take comfort from what’s called the tone at the top – the executives who are the voice of the bank both with investors and more widely. Can they claim that the bank is well-regulated, that they’re acting ethically, doing the right things? The second leg of the stool.

Not a comfortable place to sit for long, however, because it’s a two-legged stool.

So what else matters if the numbers add up at the end of the day, the bank successfully operates within regulation – within the law – and it’s on message? When things go well, we describe it in numbers; however, when they go badly we blame behaviors. I believe it’s the behaviours, the judgements, the decisions of every colleague in every bank that create genuine value and earn trust.

So if colleagues’ actions matter, could we place a value on ethical lapses, customer detriment, percent of bankers qualified and percent achieving their professional standards, and more?

In business, and especially banking, value should be determined beyond today’s outputs and yesterday’s numbers. We can make a business or transaction or product commercial by factoring in future benefits to the customer, to society, to our own business. A kind of net present value that accounts for more than financial performance.

Doing that will keep us focused on our purpose as a bank, a purpose which goes beyond just numbers, which is societal at its heart. Doing it also starts with what the customer needs. If we deliver that fairly, openly and simply, we reduce future risk and create value instead. Indeed, I believe we only create real value if the numbers, the outputs, are derived from a set of values, values with an ‘s’.

If our purpose is societal, we have to face into what society thinks. Call it behaviours, culture, professionalism – it’s this that comprises the third leg of the stool – and makes it a seat you can trust.

Lady (Susan) Rice CBE, Chair of the Chartered Banker: Professional Standards Board, BSB Board member

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.



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