The FCA has confirmed that non-financial misconduct is now classified as a core risk. This means that behaviours that include harassment, bullying, violence and intimidation in the workplace must be flagged up, carefully assessed and then dealt with using the same level of process compliance and focus as traditional risks in compliance. Let’s take a closer look:
What has the FCA said?
The FCA has updated its guidance to bring non-financial conduct into its remit as a priority for regulation. Bullying, intimidation, harassment and other similar behaviours are now governed as core misconduct under the Financial Conduct Authority’s Code of Conduct.
The FCA has said that leadership behaviour and culture must be positive and guided to reduce the risks of this kind of conduct and shape norms of organisational behaviour. This needs to be supported through clear processes, management and cross-functional governance between compliance, legal, HR and business departments, to ensure that standards of behaviour, investigations and consequences are managed in a clear and transparent way.
Practical implications for firms
Compliance elearning from specialists such as //www.adempi.co.uk/compliance-training/elearning-courses must also be updated to reflect this development, and businesses must ensure that hybrid and remote workers are also covered and supported, with behavioural expectations also extended to other third parties and external parties.
Early measurement must also be used to drive improvement with regular reporting, showing that the FCA sees these risks as systemic and necessary for leadership to tackle. The FCA will be providing detailed guidance for businesses to follow as part of this new development, to ensure consistent implementation and management.
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