Global Trustee and Fiduciary Services News and Views Issue 54

Markets and Securities Services | International 4 ALL CHANGE? MANAGING CULTURE AND CONDUCT THROUGH COVID As the world continues to grapple with the impact of covid, the financial services industry can reflect on the success of its operational resilience, planning and implementation. Markets have been volatile, but they have not been forced to close. Equally, the people behind the computer screens may not have been in the office, but their physical remoteness has not affected their ability to function — and to function very well. Indeed, this has taken the financial world by surprise, and the future of working practices has a new chapter to write. The purpose of this article, however, is not to look at these developments directly, but rather to question whether any developing changes pose a risk to the continued effectiveness of firms’ culture and conduct practices. In determining this, we ask: should firms wait for the new normal to normalise (and try to understand what that entails) or should they act now to identify potential emerging risks to their business and to good consumer outcomes? Conduct sponsored by and visible to the CEO Programme design led by senior executives Front-, middle-, and back- office coverage Clear short-term and long- term goals And conduct or culture linked to performance/pay A further challenge for firms is that before the pandemic the ability to effectivelymeasure culturewas already keenly debated. That hasn’t changed and just as there is no one-size-culture-fits-all, there is no one- size-fits-all-quantitative or -qualitative approach that firms can employ tomonitor the healthof their culture in the newnormal. Yes, there aremany commonalities, but how each firm codes them to their own specific corporate DNA will be different. By way of non- exhaustive examples, positive indicators can include: The prudent answer is short: act now. Yet how firms do act or react is much more complicated. If a firm’s operational resilience is compromised, critical processes can stop and the impact will be immediate. Importantly, though, remedial work can also be quick to put in place. Cultural slips, however, are not so easy to identify in the short term, nor so simple to quickly remedy, and once they are realised, the impact can be severe.