Annual Review 2017/2018
DAME COLETTE BOWE
People talk a lot about trust; who deserves it and who doesn’t, and why it is hard to regain once lost.
And institutions of all kinds, public and private, and in all sorts of sectors, worry about whether they are trusted and, if not, what they can do about it.
The Banking Standards Board (BSB) was born at a time of a widespread failure of public trust in the banking sector, following the financial crisis.
The focus of our work is on trustworthiness: not on whether trust is given, but on whether it is deserved. And while trust can take a long time to earn, trustworthiness is in the hands of firms themselves. A firm cannot decide to be trusted: but it can decide to aim to be worthy of trust.
The banks that have come together on this project have committed themselves to understanding better what drives the combination of incentives, other influencers of conduct and overall culture that together can determine trustworthiness.
The banks that are members of the BSB are drawn from right across the sector: from large global banks that have major activities in the UK through long-established UK based banks and building societies through to new start-ups with different business models.
And this is the second of our fully worked-up reports on the ground-breaking work of the BSB.
The main messages emerging from this most recent work are:
- the clear importance of leading by example. When it comes to the alignment between a firm’s stated values and the way that its own employees see the firm doing business, it is not what leaders in the organisation say that makes a difference, but how they are seen to behave;
- the health and wellbeing of employees remains a key area of concern and in consequent need of improvement. Overall, the percentage of employees who said that working at their firm had a negative impact on their health was the same in 2017 as in 2016. Perceptions of respect and of organisational fairness or justice also emerge as important influences on individuals’ wellbeing; and
- a reluctance to speak out on issues certainly reflects, in part, fear of the consequences of doing so; but it also, and to a roughly equal extent, reflects the perception that nothing is likely to happen even if something is said. Fear and futility, in other words, are equally influential in constraining challenge. Firms need to think about not only how they encourage feedback, but also how they respond to it when it is received.
All of this is expanded on in the detailed report that follows.
The work that has led to the production of this report has involved many people, including the more than 36,000 people working in the sector who took part in our Survey.
We are grateful to them all.
And I would like to thank in particular the chairmen of the boards of the BSB’s member firms, with whom I have had many discussions over the past year. These discussions have made clear both the seriousness with which boards are addressing the challenge of managing their culture, and the importance of the kind of evidence we are assembling to help prioritise efforts and assess progress.
I would also like to thank the BSB’s Board members for their strong and constructive contributions to shaping the work of the BSB.
I am most grateful to Antonio Simoes of HSBC and Craig Donaldson of Metro Bank who have been Board members from the start, and who have this year stood down from the Board.
We are delighted to welcome Janet Pope of Lloyds Banking Group and Mikael Sorensen of Handelsbanken to the BSB Board.
One of our non-practitioner Board members, Baroness Onora O’Neill, has also decided to step down from the Board in the spring of 2018. She has made a strong and distinctive contribution to our work from day one, and I am very pleased to say that she has agreed to continue as a senior adviser to the Board, allowing us to continue to benefit from her challenges and insights.