Chasing shadows? The FCA and the measurement of ‘culture’

Abstract

Culture is the Financial Conduct Authority’s (FCA’s) key theme. In the acknowledged absence of any specific rule-making powers over culture and the FCA’s desire for firms to be able to demonstrate that they have an appropriate culture conducive to producing the FCA’s desired outcomes, senior management faces a very real practical problem, regardless of how good the firm’s culture is. Demonstrating the existence of a culture that is intangible and monitoring it is a practical problem. This paper examines the regulatory background and how this problem might be effectively overcome.