FCA Unveils Key Findings On Workplace Culture And Misconduct

The FCA shared important findings from its survey about workplace culture and non-financial misconduct. This survey looked at how companies find and manage bad behavior at work.

In February 2024, the FCA sent a questionnaire to 1,028 firms that provide wholesale financial services. The survey asked about cases of non-financial misconduct reported in 2021, 2022, and 2023. This was the first big effort to collect data on non-financial misconduct across these sectors. It was a big step in understanding the issue and helped to show how companies behave.

FCA Aims To Improve Understanding Of Workplace Misconduct

The FCA uses the word “incident” to talk about any bad behavior that was reported or found by the firms. This includes cases that were not reported to the FCA or did not meet their reporting rules.

From the survey answers, the FCA found that the number of reported bad behavior cases increased over the three years they studied. The types of bad behavior varied by sector.

However, bullying and harassment (26%) and discrimination (23%) were the most reported issues across all sectors. A big group, 41%, of the incidents fell into the “other” category.

Firms found out about bad behavior in different ways. They used formal processes like grievances (50%) and whistleblowing. They also detected issues through their own checks like market surveillance. Firms could use more than one way to find out about one incident.

In 43% of the cases, companies took action like punishment. In other cases, the outcomes were different. Some cases were not looked into, some could not be finished, some were not upheld, and some were still being investigated.

FCA Seeks To Enhance Workplace Culture And Accountability

The FCA noted that some types of misconduct, like violence and intimidation, led to punishment more often than others, like discrimination.

The number of confidentiality and settlement agreements that complainants signed went down over the three years studied. The data from wholesale banks showed this trend, while other sectors did not show a clear pattern.

Discrimination, which was 23% of cases across all sectors, had the highest percentage of incidents that led to signing agreements. In all sectors, actions taken after non-financial misconduct rarely changed pay. When pay was changed, it was mostly for unvested variable pay.

The FCA also noted that some important rules, like those about whistleblowing and punishment, were missing at some firms. They saw some differences based on sector and firm size.

Understanding the data needs to consider the context of each firm and changing expectations in society. The FCA shares these findings to help boards understand their position compared to others, help trade groups keep working together, and inform the public and other stakeholders.

The FCA believes this process will help improve workplace culture in financial firms. They are not giving new recommendations right now but expect firms to use this survey data to reflect on their processes and discuss non-financial misconduct at high levels.