Posted Fri 5 Apr 2019
The aim of the Senior Managers and Certification Regime (SMCR) is to reduce harm to consumers and strengthen market integrity by making individuals more accountable for their conduct and competence. As the FCA states, this includes ‘encouraging a culture of staff at all levels taking personal responsibility for their actions’.
Whilst there are clear and structured SMCR requirements ensuring that responsibilities are effectively mapped – that the critical documentation is understood and completed, and staff fully understand what is expected of them – there is also an implicit requirement for firms to embrace the broader purpose of SMCR. So, delivering robust foundations is not enough; firms must comply with both the letter and the spirit of SMCR.
At TORI Global, we have derived four core pillars that make up a complete, robust and effective approach to implementing and embedding SMCR:
1. Robust foundations
Establishing robust foundations that make sure firms and staff clearly understand and can demonstrate where responsibility lies. This includes the mapping and documentation of responsibilities, consequent changes to role profiles and responsibilities, training and communication, and other enablers such as policies and procedures.
2. Shared transparency
Driving transparency around the day-to-day delivery of responsibilities and accountabilities, to ensure rigorous delivery and oversight of performance and to evidence all reasonable steps carried out and a ‘culture of accountability’.
3. Active accountability
Linked to the point made above, creating a culture of accountability and good conduct throughout the firm is vital, fully embedding the conduct rules together with behaviours relating to responsibility and ownership, from Senior leadership to the front line. Ensuring that delegations are clear and robustly made and managed, including where these are to third-parties as well as internal staff.
4. Continuous improvement
Ensuring a process of continuous monitoring and improvement, so that any changes to activities or behaviours are identified and adjusted early and effectively.
An organisation's cultural identity, its underlying purpose and its values all help to define what type of business its clients operate. If elements of the culture run counter to the spirit of the SMCR regulation, it will not be effectively embedded. There is a tendency for firms to comply with regulation on paper, but to forget about the broader spirit, that is, what is it really intended to do?
At TORI Global, we work with organisations from the outset to ensure that the essence of the regulation is embedded. We provide our clients with detailed advice and support on fulfilling the structural requirements of SMCR, monitoring day-to-day compliance with these requirements and creating an approach of ongoing review and improvement.
In taking this holistic approach, we ensure that the culture of the firm can support and reinforce both the structures put in place, and the behaviours required of individuals in order for them to demonstrate that they are genuinely accountable for their areas of responsibility.
By working alongside our expert team of seasoned practitioners, our clients are able to identify their current business culture and employee behaviour, assess the future steps needed to align this to their goals, and monitor their ongoing progress in achieving their aims.
If any of the above speaks to your current business challenges, be that in regard to SMCR or another issue on your agenda, we'd love to hear from you. Speak with someone from our UK or US office using the details below:
London +44 (0) 20 7025 5555
New York +1 212 618 1970