Top ways of measuring a compliance culture.
Updated: Dec 7, 2022
We are really struggling to work out smart ways of measuring whether we are moving towards a culture that embraces individual accountability.
Our Bitesize Our practical take on building an SMCR culture suggests that the best way for you to ensure that you have the right compliance culture is to focus on implementing the nuts and bolts of SMCR, leaving no gaps.
However, we recognise that it may also be important for you to attempt to measure your firm’s culture and how it is changing over time. This again, is partly to make you and your firm safe since a key element to successfully fulfilling the FCA’s expectations will be the amount and quality of compliance related data you can provide to the regulator.
Your challenge is putting useful measures against something as seemingly intangible as culture. We’ve provided some suggestions below (not an exhaustive list) of the practical tools and metrics you could use to start to measure your firm’s culture and how it is changing over time.
There are many potential quantitative measures that will give a useful indication of your firm’s compliance culture. There are the more obvious ones, such as the number of conduct rules breaches and number of employee disciplinary actions, or less explicit measures, such as compliance training completion rates, engagement rates for compliance-related communications, and conflicts of interest disclosure rates.
Employee surveys do not have to be a big exercise that soaks up time and resources. You can use “pulse” surveys which are based around a short questionnaire and used to capture a culture “snapshot” and how that changes over time. When done consistently, with input from employees across your firm, pulse surveys are a powerful tool for assessing culture through direct employee feedback.
Exit interviews are a powerful channel to identify cultural problems because they provide departing employees with an environment for speaking candidly. For example, an increasing number of employees leaving the firm and mentioning their experience of fitness and propriety in their exit interviews may suggest that you have underlying problems with one part of your SMCR implementation.
External Feedback Channels
There are an increasing number of websites that provide ex-employees with the opportunity to rate their previous employers anonymously against a number of different metrics. Glassdoor is probably the best known of these and now has more than 50 million reviews of over 900,000 organisations in different sectors around the world. This aggregation of non-mediated feedback provides firms with a hugely valuable source of information around their culture.