Regulations alone cannot create an environment of positive corporate culture, a senior figure at the Financial Conduct Authority has claimed.
In a speech given at the MetricStream Governance and Compliance Summit in London, Mark Steward, director of enforcement and market oversight at the FCA, highlighted companies need to take a more active role to create a culture of integrity and confidence within the financial markets.
Mr Steward said: “Good rules and standards describe the expectations and set the boundaries. But they are not like the rules of a board game. They don’t determine the moves made by every player.
“Alone they can not create the environment in which good governance, regulatory compliance and fair process magically appear – more is needed.”
Points raised in the speech included the need for senior members to understand how all areas of the company operated including the front line, middle and senior management.
He also emphasised the importance of senior management implementing systems and controls to ensure the business operates efficiently and the need for these procedures to be regularly reviewed.
He said: “I remember one institution that created terrific systems and controls, but they were all on paper, not implemented.
“In another case, effective systems and controls had been implemented, but they were not maintained – no upkeep, no training for new staff, no repair, review or reporting. All of these mistakes were fatal ones.”
Mr Steward also added: “Culture is in danger of becoming a buzz term, an integrated ideal of good governance, regulatory compliance and fair process. Intangible, theoretical, in danger of becoming merely regulatory and yet another catchphrase.”