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BSB Statement of Principles for Strengthening Professionalism

About this Statement of Principles

In April 2017 the BSB launched a year-long project to explore ways of strengthening professionalism in the UK banking sector for the benefit of employees1, customers, clients and wider society. To do this the BSB established a Professionalism Forum and smaller, supporting Working Group, bringing together BSB member firms, professional bodies, qualification providers and other experts. The “BSB Statement of Principles for Strengthening Professionalism – The role of the firm” reflects their discussions. It is intended to help firms structure internal consideration of their practices, and to reflect the legitimate expectations of customers and clients of UK banks and building societies.

Definition of professionalism

 For working purposes, the BSB Professionalism Forum and supporting Working Group have defined professionalism in UK banking as referring to the “attitudes, judgement and high standards of behaviour, knowledge and skill expected of individuals working in banking”.

Status of this document

 BSB Statements of Principles allow member firms and others in the sector to reference their own policies and practices against a set of aspirational guiding principles. They do not impose any legal or regulatory obligations on BSB members, nor do they replace regulation (and where relevant, they should support both the letter and spirit of regulation). In the event of inconsistency, applicable laws, rules and regulations should prevail.

BSB Statements of Principles are living documents and are kept under review. Please contact professionalism@bankingstandardsboard.org.uk if you have any comments or queries regarding this Statement.

 

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 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 ;
  • 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, 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.

 

1 The term “employees” in this Statement of Principles refers to all individuals working in the banking sector.

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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