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“And welcome. I m here in the financial times headquarters with dane colette beau. Who who chairs the uk s banking standards board. Which was set up in 2015 with endorsement of the bank of england.
Among others. The borders so far signed up 31 institutions. And it s preparing to issue its first annual report well thank you very much for joining us obviously we have regulators on the one side. We ve got professional bodies like the charter bankers institute on the other where does the banking standards board fit into the landscape.
What do you see as being the main contribution that you can make i think the banking standards board can make a pretty distinctive contribution regulators have of course a statement of the obvious a very important job to do in determining where the boundaries are of what is lawful on what is prescribed by the regulations. What the banking standards board. Is about is about how on the basis that all of that is being complied with a firm in this industry. Can go above and beyond to deliver something that reflects its culture its desire to go as it were beyond compliance into the realm of this is what this business is about so the banking standards.
Board is i would say highly complementary to the regulator s neither of these things that we do or substitutes for the other in terms of the professional bodies again there s a good and close relationship. I would say one of the things that the banking standards. Board has become very interested in is the question of professionalism in the banking industry will be having a good close look at that in the course of 2016 and one of the things we will be doing is working with professional bodies on what is their offer how does it align with the demands of the modern banking industry. And do we need to work collectively together to improve that offer to make it more widely available on the one hand and to encourage banks to intern.
Encourage their own staff to make more use of time for getting professional qualifications and one of the tasks that you did during the first year and is in the first annual report mmm is this assessment of in ten institutions. That was very in depth. What what were the main lessons that were able to draw out of that. But i think there were three or four big lessons that came out the worth fairly common across the ten institutions that we we looked at one and this is going to sound like a statement of the obvious.
But i think it s worth saying one is the extent to which the development of a strong culture for a firm and the installation of that culture. And the oversight of it is absolutely a job for the board itself. The board is responsible this is not a job that is to be sensibly handed off to the compliance department or some other part of the firm. The board itself has got to take ownership and leadership.
I think that s well understood by the ten firms that we assess this year. But i think one of the strong things that came out of our assessment. It s how much this this job of leadership in this face of the firm s culture. It s something that a board has to be on in a very engaged way quite a lot of a time you can t as a board.
Believe that you ve kind of got the culture that you want and then it s dumb. It s something that you have to keep you have to keep on so one big message and i think it s a message that s completely recognized by our ten initial firms. Which of course is why they are the initial firms of the banking standards. Board.
Is that this is a job for the board set in big message. And it reflects something i said a moment ago is the importance of professionalism and that is more than just an aspiration it means a commitment to training it means a commitment to continuous training. It means firms being prepared to make available time for people to do that training and it means that people who have undertaken professional training are appropriately recognized and rewarded for doing so a third big lesson that and again this is a statement of the obvious. But our our reports indicated this is the extreme importance of the work of wards remuneration committees in reinforcing the kind of cultural messages that that firms wanted to convey to those who work for them.
What is rewarded normal s. Very well worthwhile stating and i suppose a final important message that came out of year. One was the possibility of key man risk or key person risk if you re in any business of course not just banking that embarks on a process of putting culture. Right at the heart of your business development.
Any business. Where there is a strong ceo who personally commits herself or his self to such a program. Any any such business has to be very sure that there is good succession planning behind that person so that there is no doubt at all inside. The firm that the whole senior management under the leadership of the board is committed to carrying this through now phil.
If none of this is revolutionary you re going to say i can feel you thinking well that is all fairly obvious isn t it. But it does need saying it does need reinforcing the board to whom. We ve reported on findings have all told us that they have found a great deal in our detailed reports that has given them a lot to think about and in terms of the coming year or would you say is the most important task that you re going to focus on i think in the coming year. Our biggest task is going to be developing a new set of assessment techniques to enable us to work with a much wider range of firms.
We have firms coming into membership now so we are extending beyond our original 10 developing a set of techniques that will be wider than those that we ve already used new techniques that will enable us to take on board. A wider set of influences leading us. Very importantly to what i think is the the crucial need for all boards in this kind of space. Which is what are the metrics.
You can have that can tell you as a board. Whether your business is going in the right direction. As you work to improve its culture. Well thank you very much i m sure we will read the report with ” .
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