Generic selectors
Exact matches only
Search in title
Search in content
Search in posts
Search in pages
Filter by Categories
Blogs
Board Members
Board: no title
Board: non-practitioner members
Board: practitioner members
Consultations
Guidance
Member spotlight
News
Press articles
Press releases
Speeches & panels
Uncategorised
 

Annual Review 2015/2016

SECTION II
THE 2015 ASSESSMENT

The rationale

The BSB’s assessment work has two broad aims, one focused at the level of the individual member firm, and one at the cross-sector level:

  • to provide individual boards with useable and relevant information that will help them judge the extent to which they are achieving their objectives with respect to culture, behaviour and competence in their firms; and to identify what is and isn’t working, whether resources are being prioritised in the most effective way, and whether the objectives themselves remain the right ones; and
  • to build up an evidence-based picture of developments across the sector that will facilitate collective efforts to raise standards, benchmark performance and share good practice.

There is little that is straightforward about culture, and no single ‘good’ or ‘bad’ culture that provides a template against which others can be ranked. Culture is a differentiating factor that can vary within as well as between organisations. It is hard to define, hard to measure, hard to manage and generally extremely hard to change, and certainly harder in each case than are compliance or conduct. The latter are often measured and managed in terms of the incidence of misconduct, as defined by regulation; there is, however, no word for ‘mis-culture’. As difficult as it may be to pin down, however, firms cannot choose not to have a culture; only whether and how to manage it.

While there is no one template for a ‘good’ organisational culture, there are certain characteristics that we would expect such a culture in the banking sector to foster. These could include (but would not be limited to) a clear understanding of the firm’s purpose and values; a relationship of respect and openness with customers, staff, members, investors, building society members and regulators; an executive team that genuinely leads by example; a focus on continuous improvement and professional development; a product design process that has the customer’s needs, capabilities and best interests at its heart; high levels of employee engagement; effective succession planning; the fostering of internal challenge, feedback and ‘speaking up’ at all levels; and, of course, good conduct, and compliance with both the letter and the spirit of regulatory requirements.

A firm characterised, in contrast, by frequent regulatory breaches and incidences of misconduct, a reluctance to admit to or learn from mistakes, poor risk management, a lack of respect for customers and colleagues, an intolerance of different views or of people who didn’t ‘fit’ a particular stereotype, a reluctance to seek and listen to feedback from around the organisation, or an inability at the top to recognise that what was happening around the firm was out of alignment with what the board assumed was happening, might also have a very strong culture and identity. It would, however, be difficult to describe such a firm as having a good banking culture.

The BSB’s annual assessment process does not, therefore, assess a firm against a one-size-fits-all culture template. Rather, it asks how far a firm’s culture promotes and fosters a range of desirable outcomes; whether what the board and senior team say they want to achieve on culture, behaviour and standards is consistent with what happens (and is seen to happen) at all levels across the firm; and how the board and senior team know whether what they are doing to manage and shape the culture of their firm is actually having an effect.

Following completion of the individual assessments, the BSB then draws together common themes from across all of the participating firms, identifying where possible good practices, sub-sector differences, emerging concerns, new questions or apparent gaps, in order to provide further information for member firms seeking to meet their commitment to raising standards across the sector. The lessons drawn from each assessment cycle will also inform the rest of our work and may suggest areas where, for example, formal standards or common metrics or benchmarks would be valuable.

The provision of a firm’s assessment report is just one stage, albeit a very concrete and significant one, in an ongoing cycle. The report gathers together evidence and facilitates a conversation, but it is the board level discussion and the actions that follow that matter. We have, following the delivery of the 2015 assessment reports, been meeting with the boards of the participating firms. These discussions have been informative, constructive and challenging, covering both the findings of the 2015 exercise and looking ahead to 2016, and contributing further to our understanding of each firm and our ability to draw useful comparative conclusions.

The assessment approach

To help answer the questions set out above and to develop and refine the assessment process for the coming years, the BSB piloted an initial assessment exercise in the second half of 2015 with ten firms (the six banks and one building society that were the BSB’s founders) and the additional three firms 7 that joined the BSB Board at the outset. This set of ten allowed us to test our approach on firms of different sizes, backgrounds, business models and markets, and – while recognising the constraints of the relatively small sample size – to begin to build up an evidence base of current practices across the sector with a view to being able to identify good practice, trends, divergent behaviours and gaps.

With the responsibility for culture, behaviour and competence lying firmly with the boards of firms and their senior executive teams, the BSB’s assessment exercise is built around an ongoing dialogue with the Chairman, the board and the senior executive team of each firm.

The pilot exercise began accordingly with a short number of simple but stretching questions from the Chairman of the BSB to each bank or building society Chairman individually, asking:

  • how would you describe the purpose of your firm, and the culture needed to deliver this? What are your priorities on culture, behaviour and competence over the coming twelve months, and beyond, and which do you expect will be the most difficult to achieve? How will you be measuring progress against your objectives?
  • what have been the board’s priorities on culture and competence over the past twelve months and why? How have you gauged the effectiveness of the steps taken to develop and embed your firm’s culture, and where has most/least progress been made?
  • how confident are you that management and staff at all levels across the organisation live and exemplify the firm’s values? How do you know this? and
  • what outcomes and behaviour does the board seek to incentivise for your firm’s staff, and through what means? What are the objectives and reach of your Remuneration Committee? How is this intended to support its purpose and influence culture and behaviour at all levels in the firm? What effect has it had to date on culture and behaviour, and what evidence do you use to gauge this?

These questions were designed to help us understand each board’s priorities and concerns, and its current approach to culture, behaviour and competence within the firm. The answers allowed us to begin to identify themes, similarities and differences across our sample of firms. For each individual firm, the challenges identified by the board as priorities in 2015 will provide a helpful starting point against which to judge progress in the 2016 assessment exercise.

Alongside the questions sent to the Chairmen, we asked a number of factual questions of each CEO. These were intended to help give us a sense of the processes and approaches the firm already had in hand with respect to, for example, training and development, hiring, promotion and diversity, as well as how the executive team already measured staff engagement, communicated with employees and sought to assess and manage culture, behaviour and competence. The aim in each case was to help us to understand what the firm was already doing, what information each board was receiving to help it set strategy and priorities and monitor performance, and what was (or wasn’t) common practice across our ten firms and potentially across parts of the sector more broadly.

We also tested these themes with junior and middleranking staff. Timing and practicalities – given that the BSB itself only came into being in the second quarter of 2015, so the 2015 assessment exercise had effectively to be initiated and completed within a six-month period – meant that our focus groups and 1:1 interviews were not large enough to be fully representative of each firm’s workforce. The results, nevertheless, were insightful and, alongside informal input from investors, trade unions, consumer groups and others, informed the reports sent back to firms at the turn of the year and the subsequent discussions with each board.

As noted, the objective of the assessment is not simply to deliver a report; it is to equip boards with information and perspectives that will enable them better to provide leadership across all those areas that feed into and shape the culture of their business. The discussions that the BSB has been having with each Chairman and board about their firm’s 2015 report have been central to the exercise and key to ensuring that the assessment work is both useful and used.

The BSB sent the findings of each individual assessment exercise to the board of the firm concerned. Each board owns its report, and it is the board’s responsibility as to whether and how it disseminates its contents, internally or externally. The BSB has not published and will not publish firm-level findings. It will, however, draw together each year the themes that emerge from across the individual assessments and report on these. The key themes from the 2015 assessment are set out in the section that follows.

  1. Citi, Metro Bank and Morgan Stanley.

Key themes

As well as the firm-specific information contained in each report, the assessment exercise also aims to identify any generic themes and approaches that may be of value across member firms and to the sector collectively. The constrained nature of the 2015 assessment exercise and the non-random nature of the ten firms that participated, mean that the results of the pilot cannot be regarded as representative of the banking landscape as a whole, or indeed of any individual firm. Furthermore, given the partial nature of the evidence base, the emerging themes reflect in some cases our interest in finding out more about issues on which relatively little information was available or provided. Notwithstanding this, however, six themes emerged from the exercise that may merit reflection from banks, building societies and others, and that have informed the BSB’s future work plans.

These themes, described below in more detail, comprise:

  1. the alignment of a firm’s purpose, values and culture
  2. the difference between a focus on culture, and on compliance
  3. Leadership and key person risk
  4. Incentives, rewards structures and practices
  5. Fostering challenge and speaking up; and
  6. Provision, take-up and effectiveness of staff training and support

a. Purpose, values and culture

Firms varied in terms of their statements of purpose and how they set these out. Some, for example, referenced explicitly their role in society; others did not. Within the small workforce samples we surveyed, staff varied in the extent to which they said they identified with the values set out by their firm.

We were particularly interested in whether a firm’s purpose and the values it espoused were clearly articulated, understood and perceived by staff to be aligned with the firm’s business model and practices – whether the firm’s culture and values were intrinsic to its purpose and strategy, or whether they were ‘add-ons’ and, as such, vulnerable to being forgotten or subsumed if the firm’s business strategy or bottom line came under pressure.

Underpinning this was an assumption – and one that we will test – that an organisation that is clear about its purpose and that has a culture and values that reflect and are consistent with its purpose, will be one in which staff are able to feel confident that there is no conflict in principle between what they are expected to do and how they are expected to do it. There would be no mismatch between the pressure to perform and the pressure to behave. A lack of alignment between purpose, values and culture could, in contrast, give rise to stress and uncertainty among staff trying to second-guess what takes priority in any given situation, as well as a lack of engagement with what might be regarded as the non-strategic side of the business agenda.

Aligning purpose, values and culture is not always straightforward even in a small or relatively simple firm. For a large, complex or global firm in which aspects of culture may vary within the organisation, ensuring that culture in each part of the group is consistent with the firm’s overall purpose and values can be even more challenging. It was not always clear from our exercise how cultural variation within firms – whether across geographies or business units or functions – was understood and, as appropriate, managed, reduced or fostered. Without recognition and discussion of intra-firm cultural variation, a pre-requisite for which is having information at a level of granularity that allows such differences to be identified, boards and executive teams cannot adequately assess the risks stemming from differences across their organisation or, more positively, take advantage of opportunities to learn from different parts of the business.

FIGURE 1:

Measuring culture and cultural progress – range of approaches used by firms

STAFF ENGAGEMENT AND CULTURE SURVEY

Most firms use annual staff engagement surveys, supplemented by separate culture and climate surveys or modules added to the regular engagement survey

CUSTOMER PERCEPTIONS AND OUTCOMES

Some firms see the real test of culture as being in the outcomes it generates. They focus in particular on customer satisfaction scores, with some going further to try and test outcomes (eg, mystery shopping or regular online panels of customers)

INDICATOR DASHBOARD

Several firms use a range of indicators, sometimes consolidated into ‘culture dashboards’, including:

  •  Customers: satisfaction scores, Net Promotor Scores, complaints
  • Employees: engagement scores, speaking up scores, turnover, absence rates, grievances, use of whistleblowing lines
  • Conduct and risk: conduct breaches, clawbacks, material events and escalations
VALIDATION

A range of methods is used by firms to validate their progress or performance and confirm their understanding:

  • Consultancy firms’ benchmarking exercises
  • Other external benchmarks
  • Internal Audit assessments
  • Triangulation across various data sources, eg, staff and customer surveys

b. Culture and compliance

Culture is different from compliance, though the two concepts tend to be used interchangeably (and with ‘conduct’ often standing in as a synonym for both). Equally, however, they are not independent of each other; one characteristic of a good culture in the banking sector will be high levels of compliance and conduct, but ‘culture’ itself is much broader than this. The culture of a firm will shape the way it approaches regulation and the way it complies with regulation. There is a world of difference between a firm that focuses on the outcome a regulation is designed to achieve, and a firm concerned primarily with avoiding conduct breaches at least cost.

Firms frequently used the word ‘culture’ during their assessment. It was, however, clear that different firms meant different things by this. For some, the focus was in practice primarily on understanding and mitigating conduct risk. Some others, in contrast, had explicitly identified a need to change aspects of their culture more broadly, and were clear as to the reasons for this change (though sometimes found it easier to describe the culture they aspired to or that they felt that they had moved away from, than the culture they currently had). Others, meanwhile, reflecting the different starting point and experience of each firm, were concentrating on maintaining or building on their existing culture rather than changing it.

Where failures of compliance and of culture had occurred in the recent past, firms also differed in the extent to which they appeared to recognise and ‘own’ responsibility for this. We will be interested in exploring how organisational openness about what went wrong and why, and being clear about why this matters for the whole of the business and not just for a part of it, contributes to the credibility and effectiveness of efforts to move away from the behaviour and culture that produced those failures. It will also be interesting to observe over time whether a readiness to acknowledge responsibility in this way is correlated with the success of efforts to encourage speaking up and accountability at an individual level with staff.

The variety of approaches used by firms to help them assess their current culture or culture change, and to understand the external (customer) and internal (employee) implications, are described in Figure 1.

c. Leadership and key person risk

The importance of key individual leaders (often CEOs) to changing or maintaining corporate cultures was identified by staff in a number of the firms that we assessed. While individual leadership is key to success, and nowhere more so than on an issue as difficult and entrenched as culture often is, it brings the risk that the momentum behind and commitment to that programme becomes associated very personally with that individual. When, as will inevitably be the case, that person moves on, some of that momentum and commitment may be lost with them, and the challenge for their successor be all the greater.

The answer to this is not for CEOs or other leaders in a firm to exhibit fewer of the leadership skills that have contributed to their success. Strong inspirational leadership is precisely what is needed to initiate and promote cultural change, and the ‘key person risk’ identified here is a product in part of success. What is important is that, over time, the responsibility for managing and safeguarding the firm’s culture becomes shared; across the board, the leadership team, and the entirety of the firm itself. A culture that is contingent on the presence of a specific individual cannot be described as the culture of the firm; the latter will be what resurfaces, once the key individual has moved on.

Our assessment work and subsequent discussions have underlined the importance of the active support of the Chairman and the board to the effectiveness of programmes intended to change or maintain culture. There were also indications of some boards placing increasing weight on culture as a factor in succession planning, to ensure continuity of focus and leadership skills.

While the example set by the executive team and the board is a crucial determinant of a firm’s culture, it is not, however, sufficient in itself. Culture in any part of a firm will be shaped also by the expectations and behaviours of immediate managers and colleagues, and by local role models. Some firms have started to focus on middle managers as a critical group of staff with whom to talk, listen to and engage, and are now more actively involving managers below the most senior levels in implementing cultural programmes. Figure 2 describes some of the approaches that different firms use, both in communicating the ‘tone from the top’ and in engaging staff at all grades.

FIGURE 2:

Communicating values and behavioural expectations to staff

PROVIDING CLARITY ON VALUES AND BEHAVIOURAL EXPECTATIONS
  • Face-to-face learning or ‘off-sites’ at which culture is explicitly linked to strategic aims and managers have the opportunity to explore ethical dilemmas in a practical way
  • Leadership development programmes which incorporate a clear articulation of behavioural expectations
  • Support for line-managers in explaining and implementing strategic and cultural priorities, recognising the pressures faced by staff in middle management grades in particular
PERSONALISED COMMUNICATION FROM LEADERS
  • Regular email and intranet updates from the CEO
  • Q&A phone sessions with the CEO
  • Video diaries from executive team members
INTERACTIVE METHODS
  • Collaboration sessions via internal social media platforms
  • Regular leader-facilitated meetings, discussion-based breakfasts and events for staff
ORGANISATIONAL MEDIA
  • Formal memorandums and bulletins
  • Use of the intranet
  • Use of employee magazines
  • Digital screens in lobbies
  • Regular e-learning
  • Promulgation of decision making tools
CASCADE PROCESSES
  • Cascade from leadership team to managers and then to employees
  • Monthly team briefings to help managers communicate key messages
  • ‘Town Halls’, roadshows and other events
  • Employee-led networks

d. Incentives and reward

The issue of bankers’ pay has rarely been out of the headlines since the financial crisis. This is of course also true of pay in other sectors, but the context of taxpayer support for the sector during the crisis, a continuing legacy of misconduct (not all of it pre-crisis), and a perceived lack of individual accountability for failure or wrong-doing, has made the issue particularly contentious within banking.

Remuneration and reward structures play a crucial role in aligning behaviour with a firm’s values and purpose. As such, they feature prominently in the BSB’s work, whether in the context of the assessment exercise or other themes or projects. Given the diverse nature of the sector and the different environments that different firms, or parts of firms, operate in, it is helpful to approach this topic from two perspectives; first, the remuneration of senior executives and material risk-takers (the latter, in particular though certainly not solely in the investment banking sector); and second, pay and incentive structures more broadly, covering the bulk of banking sector employees.

Executive remuneration – its scale, structure, cost and rationale – has come under increasing scrutiny in recent years from a range of sources. The regulatory focus has encompassed the scale of remuneration, its composition and the terms and timing of variable pay. The result is a pay structure for senior staff and risk-takers that is now more constrained. It remains, however, open to challenge, with early 2016 seeing some senior figures in the industry commenting publicly on the merits and costs of established pay practices, in particular in the investment banking sector.

Executive remuneration is clearly relevant to any consideration of culture in a firm or in an industry. Firms have been adapting to and implementing a wide range of national and global regulatory initiatives, and the full impact of these remains to be seen. We will be paying close attention in our continuing assessments to the way in which firms take responsibility for ensuring that executive and risk-taker remuneration structures and processes are aligned with the stated purpose of the business, and to how this is communicated. The role of Remuneration Committees in setting bonus conditions and targets will be an area of particular focus.

Financial incentives do not, however, apply to and affect the behaviour of only the highest paid staff in an organisation. They also play a powerful role in shaping the culture at all levels, including in front-line positions. In the 2015 pilot assessment, we explored the extent to which remuneration structures throughout the firm – below the senior tier, and encompassing customerfacing staff in the retail and commercial banking sectors – were aligned with what the firm set out as its purpose, values and culture. Given that reward structures in the retail and commercial sectors are more likely, for most staff, to be set in a ‘top down’ manner across a whole firm; the changes in behaviour they incentivise can have very large consequences, as past mis-selling scandals demonstrate.

Firms have in general been changing performance assessment and remuneration practices. They have moved in many cases towards balanced scorecard approaches or assessment mechanisms that give a greater weighting to behaviour.

In many retail banks, aggressive sales targets appear to have been removed or softened. This has produced a lack of certainty in some cases among staff and managers as to how performance is in practice now measured. Ensuring that managers understand the new approaches, and that sales targets do not reappear via the back door or at local level (either because of confusion over the new approach, or if pressures build on the bottom line), will be challenging.

The extent to which firms see (or indeed are looking to identify) changes in behaviour stemming from changes in remuneration practices, is less clear. There is a question in this context about the role that Remuneration Committees might play in considering the influence of remuneration structures, and of changes in these structures, on the firm’s culture. It also suggests a further area to explore, in terms of how far the role of the Remuneration Committee is joined up with those of other board committees focusing on culture or conduct. If a Remuneration Committee does not factor culture into its thinking, culture is unlikely to be intrinsic to the way that a firm pursues its business.

FIGURE 3:

Performance assessment mechanisms

< MOST PRESCRIPTIVE LEAST PRESCRIPTIVE >
Balanced scorecards with defined weightings for behavioural elements

Performance is assessed against a specified balanced set of objectives. These often include customer and colleague feedback, adherence to appropriate risk management processes, behaviour that is in line with values, and performance against agreed business/ financial objectives. Outcomes are often subject to ‘moderation’ and challenge

Example
An explicit 50/50 weighting between behaviours (the ‘How’) and business performance (the ‘What’). Business performance is further broken down into specific financial and non-financial targets

Discretionary approach

A non-scorecard approach where staff are assessed on the basis of individual, group, and business performance, and management of risk. The process relies on manager discretion

Example
A line manager assesses the performance of an individual based on what has been delivered during the period, taking into account whether this individual has met the behavioural standards expected. Performance scores may be reduced to reflect incidents of poor behaviour during the year

FACTORS TO CONSIDER
Do specific measures have any unintended consequences for behaviour? What is the most effective weighting for behavioural elements in balanced scorecards? How confident do managers feel in being able to make these judgements? Does the use of discretion imply a lack of clarity or transparency in how individuals are rewarded?
How to communicate to staff that failure against the ‘How’ has in
practice had a material impact on reward or promotion, without
identifying individuals?
GUIDANCE ON ASSESSING BEHAVIOUR
In many cases, guidance is provided on assessing behaviour for staff having or holding performance assessments. Typically, this describes desirable and undesirable behaviours in line with the firm’s values

e. Challenge and speaking up

Challenge and speaking up was a theme common to many firms; it is also one that can encompass a range of issues. At one end, it may be about awareness of and confidence in the firm’s whistleblowing arrangements; at the other, about the extent to which a junior member of staff feels able to say that he or she has a better idea about the way in which something might be done.

Firms focused to different degrees on different parts of this spectrum, but appeared to be consistent in their wish to foster an environment in which staff would challenge and speak up when poor behaviour was observed; when actions were being considered that would not be in the customer’s interests or aligned with the firm’s values; when decisions already taken were having unintended consequences; or when something could be done in a better way.

The extent to which staff are willing to speak up and challenge will depend on their confidence both that doing so will not have adverse consequences for them (or their colleagues), and that if they do speak up, something will be done as a result. To promote a culture in which speaking up and challenging is normal, organisations need therefore not only to encourage it but to respond to it, and to do so very visibly.

Diversity of thought, experience and approach may also be important in creating an environment in which challenge and speaking up are the norm. When most people approach an issue from the same perspective, the minority views may be more likely to go unvoiced. The importance of actively fostering challenge and different views may, paradoxically, be all the greater in a very ‘friendly’ working environment, as staff may feel more constrained in speaking out or going against the grain where working or social ties are very strong.

There is, of course, a balance to be struck between strengthening the culture ‘fit’ of a team or workforce and ensuring that challenge or difference is encouraged, and there is no one right answer. Hiring at any level is, however, a key part of managing that fit, and a firm’s hiring policies will be a central influence on and reflection of its culture. Figure 4 describes some of the different approaches used by firms.

Diversity, for some firms, appeared to be considered primarily in terms of legal requirements and protected characteristics and, to some extent, external expectations, rather than seen as integral to a firm’s culture, purpose and strategy. This is surprising, given the numerous potential benefits of diversity of experience to a firm’s business goals (eg, enhancing its ability to identify and manage risk, encouraging aspiration among its staff, attracting talent from across the workforce, retaining staff, relating more effectively to its customers and the society it serves, and encouraging the expression of different points of view or perspectives).

The stated diversity focus of most firms is almost exclusively in relation to gender, and to a lesser degree on ethnicity and/or sexual orientation. Firms used different quantitative measures, making comparability difficult. Targets (primarily for gender) tend to be focused at senior level representation rather than extending to the pipeline that feeds internal promotion to those senior positions.

A broader concept of diversity and a more transparent approach to measuring success, and one more clearly rooted in the firm’s own purpose and business interests, would help many firms improve their effectiveness in fostering the culture that they are working hard in different ways to create.

FIGURE 4:

Recruitment practices and priorities

< CULTURAL FIT
Prioritisation of cultural fit

Selection primarily designed to determine cultural fit; skills are a secondary factor. For many roles, training is provided once the right person is selected, and processes are designed to reduce the specialism required at junior levels

Example
A firm does not allow the hiring of a full team from a competitor, or a new hire to bring in ex-colleagues, because the result may be to import a culture that does not align with that of the firm

Balance of capability and cultural fit

Selection based on competency (role-specific skills and knowledge), expected behaviours, and cultural and motivational fit

CAPABILITY >
Prioritisation of capability

Selection primarily based on capability, skills and experience. Candidates assessed against criteria such as judgement, drive, influence and execution. Reliance on background checks as main indicator of ethical conduct

Example
A firm permits the hiring of a full team because it provides the required expertise

f. Staff training and support

Firms in general have a wide range of training and development material available for staff, and policies that encourage them to use it. The overall culture of a firm may not, however, be so supportive in practice of these training opportunities actually being taken up. It may also not foster efforts to assess the efficacy of the training received. The impact on behaviour and norms of each member of staff receiving induction or refresher training in ethical behaviour is, for example, likely to be different where this involves a peer group discussion using real-life scenarios and dilemmas, to where it comprises a short online package completed by the individual at their desk, even though both might tick the box in terms of training having been provided.

Many firms provide decision-making tools that employees can use when faced with difficult judgements or ethical dilemmas. The assessment suggested that, where these tools are clear, and in particular where they nudge individuals towards taking into account personal considerations in their judgements, staff both use and value them. In contrast, staff are less inclined to use overlapping and more complex tools that require more abstract judgements. Understanding this dynamic through further investigation will be important to evaluating the effectiveness of the approaches used by firms. The type of training offered and its take-up are, of course, just the first steps. The next is to assess the actual impact on decisions of using such tools, to help assess their effectiveness.

Staff frequently described their working culture and environment as fast paced and intense; a finding not only in investment banking samples, but also in some corporate and retail banking functions. Such words can, of course, have positive and negative implications, and need careful contextual interpretation. The adverse implications in terms of increased prolonged stress levels and wider detrimental impacts on the health of employees make this, however, an important area for detailed consideration. Given that stress can affect how people weigh risk and reward, and therefore the way in which they make decisions, it is important from both a duty of care and a business perspective that staff wellbeing and health are incorporated within firms’ cultural agendas, both as an input and influence on actions and behaviour, and as an outcome.

FIGURE 5:

Diversity

< HIGH FOCUS
Gender Ethnicity Sexual Orientation Disability
LOW FOCUS >
Age Carers/ Parents Ex-military
Other

Diversity targets

Most firms have targets for gender representation at the top levels of the organisation (either at board level or senior management level). For those that have targets, these are typically about achieving between 25%-40% female representation in the most senior roles over the next 3-5 years

Integrating diversity into operations

Many firms use their internal diversity groups to help integrate diversity into their operations, and extend their approach externally to customers or suppliers

Example 1
A firm engages its staff disability network to trial new processes for customers with a disability

Example 2
A firm shares its best practice findings with its suppliers to promote diversity beyond the firm itself

SECTION 1: THE BSB

SECTION 3: NEXT STEPS