The most recent scandals that have occurred have been quite enlightening about our society. We have seen nasty activities being perpetrated by individuals or organisations. Many of those being multiple occurrences of the same disgraceful behaviour. Whilst the behaviours may have happened in private, there often seems to have been many people who were aware of them. However, none of them reported or did anything about the behaviour.
This leads to many people coming forward when a scandal becomes public on the basis of “that happened to me. I thought that I was the only victim”. Invariably, there are many people who come forward when “Me Too” becomes available. Also, disappointingly, there are also many people who say they were aware, or at least suspicious about the perpetrators.
Sadly, the perpetrators are often people of “power or influence” and the victims are “underlings or people with no power”. An imbalance in status. The perpetrators work on the basis that they will get away with it because people are scared to report. Or the people to whom a report has been made do a risk assessment about the consequences of publicity or reputational damage. The victims also wonder whether they will be believed or whether reporting will damage their own prospects.
There is nothing that is going to make people hate you more, and love you more, than telling the truth.
Stefan Molyneux
Worse still is the “wall of silence” that operates in many communities. The perpetrators of crimes have such a grip that reporting is dangerous. There is also the stigma about being a “grass or a snitch”. These customs enable criminals to continue with the activities with impunity.
Personally, I feel that the people who do not act upon reports, or worse still, cover up behaviours are as bad or even worse than the perpetrators.
What people do not seem to realise is that an early report could mean that the amount of victims could be minimised in the future. Stop the behaviour – no more victims.
As a compliance consultant, I am a natural whistleblower. Reporting to management about any issues that are revealed in the course of my duties. Normally, with a view to putting things right. That is what I am paid for. A lot of my work revolves around training and guidance to try to work together towards better business practices.
Silence encourages the tormentor, never the tormented.
Elie Weisel
However, if my concerns are not addressed by the management and their colleagues, I then need to assess how to go forward. One is to simply stop working with the firm, if I cannot help them. The nuclear option is to report to the FCA about my concerns.
What whistleblowers need to understand is that they have done their duty raising any issues with somebody that they believe has the power to act on the information provided. It is not up to the whistleblower to enforce any actions. They are merely reporting. It may be that their report is part of a much larger jigsaw. Just one piece of evidence or an allegation. It may well be that the weight of evidence may cause action. But enforcement will fall to whoever has the power to do so.
The lack of willingness to accept accountability has been seen many times in the history of financial services. Historically, when something has gone wrong with a business , the senior management all sought to deflect blame and certainly not admit their own culpability.
Silence becomes cowardice when occasion demands speaking out the whole truth and acting accordingly.
Mahatma Gandhi
In order to try to address this, the FCA introduced the Senior Managers’ Regime. This meant that all directors and senior managers would be issued with a Statement of Responsibilities, which would clarify their duties and spans of control. The upshot of this means that if a problem arises, it is possible to identify who should be responsible for addressing the issue and hopefully resolve it. It has led to clarity on whether an issues falls within a person’s sphere of influence or not.
This must be easier for the management as they can be comfortable that they can only be held responsible for issues that occur in their department and not for the faults elsewhere in a business.
This Statement of Responsibilities is important for good business practice. It should illustrate that the duties allotted to an individual are exercisible. It may highlight whether a person has too many duties to cover them effectively. It should also give rise to consideration about the ability of the individual to undertake those duties. Also, it should be possible to work out what training the individual should be undertaking to ensure that they continue to be competent to complete their duties. Continuous Professional Development is not appreciated by many people and yet it is vital for the continuation of good business practices.
I am currently going through an application process for SMF 16 and 17 functions for a small firm of investment advisers. The FCA is rightly questioning whether I actually have the capacity to make the time commitment to be able to attend to these functions when I already deal with many different firms.
This is something that I have considered already at length and have made the calculation that I will be able to add this to my current commitments.
As I write this, I look forward to an interesting year in 2025.
Intelligence is the ability to adapt to change.
Stephen Hawking
Firms will be used to the Consumer Duty and will need to get used to reporting various elements of their activity to the FCA periodically.
Advisers will see more fund managers adopting Sustainable Investment labels and getting extra levels of information to present to their clients.
The ever-shifting geopolitical situation around the world awaits the inauguration of the new president of USA. How this will affect conflicts around the world remains to be seen. Also, we may well have the addition of trade issues to build into our diplomatic negotiations in the future.
I believe that the only constant that we can rely upon is change.
