The Importance of the Firm's Purpose for Culture

Do’s and Don'ts of solving the purpose challenges

• Do’s- Look at old sources of information in new ways - Ask intelligent questions about data-gathering assumptions
• Don'ts- Listen to advisors with a vested interest in repackaging conventional audit-based offerings

• Conduct regulators want to see firms thinking for themselves, not ‘outsourcing’ culture initiatives to external firms
• You already have much of the raw material you need for culture reporting

What are the bad habits of misconduct listed by the FCA?

• Misaligned incentives - This means in its plainest form, rewarding mis-selling
• Negative ideologies - People’s loyalties mostly set by their need to ‘belong’ in their team, no matter what
• Moral evasion - This is when people “justify away” something dodgy that they’ve just done
• Selective attention - This is only looking at the things that it suits you to look at; clinging to processes and controls that you know don’t really work
• Lack of challenge - This one means that there’s no sign of anyone ever putting a hand up to question anything
• Contagious rule-breaking - This is where there are little habits of “cutting corners” or “workarounds” that, over time, morph into full-on breaking of the rules
• Overconfidence - This come is three kinds:- You think you know what you're doing (even if you don't) - You think you won't get caught (detection denial) - You think that even if you do get caught, any penalty won't hurt