Annual Review 2016/2017
The Banking Standards Board
and its Approach
BSB Board members
- Chairman Dame Colette Bowe has worked in the City, in regulation, and in Whitehall, and is former Chairman of Electra Private Equity and Ofcom.
- Deputy Chairman Sir Brendan Barber is Chair of the Advisory, Conciliation and Arbitration Service (Acas). He is a member of the Board of Transport for London and of the Council of City University London and was the General Secretary of the TUC from 2003 to 2012.
- James Bardrick is the Head of Citi UK. James is a member of The CityUK Advisory Council, sits on the PRA Practitioner Panel and is also a Board member of the British Bankers’ Association and British American Business.
- Craig Donaldson is the Chief Executive Officer of Metro Bank. Prior to launching Metro Bank, Craig was the Managing Director of Retail Products and Direct Channels at RBS. He has also held senior roles at HBOS and at Barclays. Craig serves on the Board of Directors at TheCityUK.
- Gillian Guy became Chief Executive of the independent charity Citizens Advice in July 2010. Gillian is currently Chair of the BBA Consumer Panel and is former CEO of the London Borough of Ealing, and CEO of Victim Support.
- Paul Johnson is Director of the Institute for Fiscal Studies and former Chief Economist at the Department for Education and Director of Public Spending in HM Treasury.
- Saker Nusseibeh is Chief Executive of Hermes, Chair of its Executive Committee and an Executive Board Director. He is former Global Head of Equities at Fortis Investments USA
- Professor Onora O’Neill Baroness O’Neill of Bengarve is an independent peer, philosopher and author, and former Principal of Newnham College, Cambridge, and President of the British Academy
- Lady (Susan) Rice CBE was appointed Chair of Scottish Water on 1 June 2015. She is also Chair of the Scottish Fiscal Commission and a Non-Executive Director of Sainsbury’s and the North American Income Trust. She was a member of the First Minister’s Council of Economic Advisors, Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chair of Lloyds TSB Scotland plc.
- Alison Robb is a Group Director and member of the Executive Committee at Nationwide Building Society. She is a Chartered Accountant and qualified at KPMG before moving into business. She now leads a diverse team with accountability for human resources, communications, customer experience and commercial lending.
- António Simões is the Chief Executive of HSBC Bank plc, with responsibility for the UK and Continental Europe. Previously, António was CEO for HSBC in the UK, and deputy Chief Executive of HSBC Bank plc.
- The Rt Revd David Urquhart Bishop of Birmingham worked in commercial management with BP for ten years before studying theology at Oxford and becoming a parish priest. He is actively involved with education, industry and commerce.
- Clare Woodman is Global Chief Operating Officer for Morgan Stanley’s Institutional Securities Group and is a member of the firm’s Global Operating & Management Committee. Clare is a Non-Executive Director of Euroclear, TheCityUK, GFMA and AFME (The Association for Financial Markets in Europe). Clare is a member of the Worshipful Company of International Bankers.
- Chief Executive Alison Cottrell was previously Director of Financial Services at HM Treasury and began her career as an economist with firms including HSBC and PaineWebber
Following the publication of the report we commissioned from the University of Leeds, looking at the role of professional bodies and professionalism in banking more widely…
In April our Chairman Dame Colette Bowe spoke at ifs University College as part of its Prestige Lecture series. Dame Colette spoke about the banking sector, how professionalism…
Our non-practitioner Board member and Chief Executive of Citizens Advice Gillian Guy CBE spoke passionately at the FT Banking Standards conference on the impact of the…
- Handelsbanken In October 2016 then Acting CEO Andy Copsey and branch manager Sue Toulson spoke to us in the Ilkley branch. Amy Walker, corporate banking manager, showed us around Handelsbanken’s Regional Head Office for Yorkshire and the North East, based in Leeds city centre.
- BNY Mellon At BNY Mellon’s central London offices we spoke to EMEA Chairman Michael Cole-Fontayn, EMEA Chief Admin Officer Janet Johnstone and EMEA General Counsel Susan Revell.
- Penrith Building Society CEO Amyn Fazal, branch manager Kate Cunningham, head of mortgages Michelle Cole and business service administrator Wendy Bird showed us around their branch and offices in Penrith.
- Ipswich Building Society On our visit to the Ipswich Building Society we spoke to then-CEO Paul Winter just before his retirement and the end of 2016, as well as head of mortgage sales Michelle Stevens, general manager Jo Leah and marketing comms trainee Jake Cornish.
- Virgin Money At Virgin Money in Edinburgh we spoke to Paul Eastwood, director of partnerships and Linda Robertson, head of customer proposition. We also spoke to Sarah Rooney, who explained the role of a Virgin Money lounge host.
- Unity Trust Bank At Unity Trust’s central Birmingham offices we spoke to CFO Clare Gosling, head of transformations Matt Glover and customer services adviser Ben Heywood.
- Cambridge & Counties Bank Cambridge & Counties Bank is represented in this film by CEO Mike Kirsopp, financial accountant Katie Garrick, senior underwriter Mark Smith and Alex Churchill, business development officer. Director of HR Sara Thorpe also talked us through a recent workshop on culture in which all staff participated.
The BSB’s Assessment framework comprises nine characteristics that encompass a range of ethical and professional aspects of behaviour, and that we would expect to be associated with any good culture in banking.
The nine characteristics against which firms are assessed are honesty, respect, openness, accountability, competence, reliability, responsiveness, personal and organisational resilience, and shared purpose.
If these characteristics appear at first glance to be obvious and fundamental, that is precisely as it should be. They are characteristics that customers or clients should be able to take for granted as being not only present, but present to a very high degree, in any bank or building society to which they entrust their money or that they deal with. Furthermore, given both the importance of the banking sector to the economy and the systemic nature of the sector, the public as a whole also has the right to expect every firm – whether or not they deal with it directly – to demonstrate these characteristics to a high degree.
Our Assessment approach evaluates how far firms exhibit these core characteristics. It does not seek to measure a firm’s culture as such, or to rank one culture relative to another. Firms with very different cultures can produce equally good or bad customer and client outcomes. While this approach does not yet enable us to identify directly the impact of culture on customer outcomes, we would expect a firm that strongly exhibits our nine characteristics to be better equipped and more likely to serve its customers, members and clients well, than one in which these characteristics are lacking; a hypothesis that we will test as we extend and develop our work.
The Assessment exercise asks how far the nine characteristics of the BSB framework are demonstrated within a firm. Repeated annually, it provides boards with an impartial, evidence-based picture of the culture of their firm; not only over time and across different business areas, but also relative to other firms. These multiple perspectives, combined with other internal and external data used by firms, equip boards and executive teams better to gauge progress, set priorities and learn from good practice both within the firm and (including through our policy work) across firms.
The Assessment approach was developed by the BSB, working with leading academics in the fields of organisational psychology and ethnography from the London Business School and the London School of Economics and with strategy consultants. It comprises both a quantitative element (generated from an employee Survey) and a qualitative dimension (including e.g. focus groups, interviews and board questions) that allows the Survey results and any broader themes to be explored in more detail. All participating firms engage in the Survey, the data from which provides benchmarked results by firm and business area.
How our framework supports out policy and assessment work
The BSB’s Assessment and policy work are together intended to provide member firms with the evidence, support and challenge that will help them meet and maintain high standards of both behaviour and competence, individually and collectively.
At the core of this dual approach is our framework of nine ‘characteristics’. These are characteristics that encompass both ethical and professional aspects of behaviour, and that we would expect to be associated with any good culture in banking (or indeed in any sector or industry). The assessment provides a point in time view of how far firms exhibit these core characteristics; and our policy responses seek to help firms improve their ability to exhibit these core characteristics. For example, our work on Certification seeks to help firms improve attributes associated with the following characteristics from our framework; honesty, respect, openness, accountability, competence and reliability.
Informed by the themes that emerge from each annual Assessment exercise, the BSB’s policy work then identifies issues of relevance across the banking sector or within parts of it. Drawing on this evidence the BSB will innovate, challenge, initiate and collaborate with other bodies and member firms to understand these issues in more depth and develop appropriate policy responses, using the following methods:
- Research: By developing a strong evidence base we will seek to better understand issues that are impediments to higher standards of behaviour and competence in banking, or where there is a potential for positive change. This will typically be in partnership or collaboration with organisations or individuals who are experts in a particular field. The work that we commissioned from the University of Leeds on the role of professional bodies and professional qualifications is an example of this.
- Proposals for action: Building on our research, we will examine the case for broader changes in the banking sector, or sectors that interact with it, that could help to raise standards of competence and behaviour. Our planned formation of a Professionalism Forum is an example of this.
- Good practice guidelines: Working with our member firms and other appropriate experts we will encourage firms to adopt good practice that raises, supports and bolsters standards of behaviour and competence within banking. Our good practice guidelines (which come in the form of Statements of Good Practice and supplementary Supporting Guidance) are not intended to substitute the standards set by regulators or other organisations. Instead, they are intended to help and challenge firms in raising standards of behaviour and competence, beyond the regulatory minima, that are in line with the nine core characteristics of the BSB framework. They do not constitute legal or regulatory obligations on our members, but we would expect our member firms to formally consider our good practice guidelines and, with due consideration to their own business model and risk profile, adopt them where appropriate. An example of this approach is our work to date on Certification.