Context
The FCA has published a speech by Sheree Howard, FCA Executive Director of Risk and Compliance Oversight, delivered at the XLOD Global London event on 15 November 2023.
Key points to note
The highlights of the speech were:
- Heightened financial pressures mean making careful judgements around risk but should not mean dropping standards.
- A firm’s 3 lines of defence should be separate but cohesive.
- Creating a culture of fearlessness, not fear, where employees can speak up and employers listen up is vital for healthy cultures.
- An organisation with a lack of diversity, equity and inclusion is at much greater risk of not having a healthy culture.
The speech urged firms to update their risk assumptions, outlining how risks can morph and transform. “What may start as conduct, operational, or reputational risk can swiftly transform into liquidity or solvency risk. And in the event of liquidity or solvency challenges, there are often new conduct, operational or reputational challenges to manage.”
Next actions
None – for information and awareness.