Regulation alone will not improve corporate culture, CIPD warns
As MPs urge the Government to pick up the "regulatory stick" to drive forward City reforms on corporate governance, the CIPD believes that proposals made by John Kay last July are not being adopted fast enough but warns that regulation alone is not the answer.
CIPD research published in June 2013 suggested there is still a long way to go in transforming culture in the banking and financial services sector to ensure they become more focused on creating long-term value for the customer and wider society.
As a result, the CIPD has been supporting the work of the Chartered Banker Institute Professional Standards Board (CB:PSB), which aims to restore public confidence and trust in the industry and promote a culture of professionalism amongst individual bankers. And to help organisations embed professional standards, the CIPD is also working with the City Values Forum and City HR Association to promote training programmes, guidance and tools to support effective culture change.
Peter Cheese, CIPD chief executive, said: "There's no doubt that more needs to be done to change culture in the City, but our recent research amongst financial services employees suggests that many banks are already taking steps towards a more customer-centric and long-term approach to business.
"Culture change does not happen overnight and cannot be regulated for - it requires each organisation to revaluate its core purpose and values, which in turn define behavioural expectations and norms that are lived and breathed, day-in day-out, from top to bottom. New rules on corporate reporting are welcome, but the importance of firms measuring and reporting on the people side of their business is too often missed or relegated to a footnote.
"If the banks had concerned themselves with measures of trust, employee engagement and a real understanding and adherence to shared values, we might have seen some early warnings of the cultural problems that allowed the banks to go crashing so spectacularly over the precipice."