The Senior Manager and Certification Regime is yesterday’s news; Senior Managers now duly complete their Annual Certifications and follow their road maps of responsibilities. When the Regime was introduced, many had training that typically included the importance of establishing and embedding the right culture and governance to improve the standard of conduct within their area of responsibility. As a result, for a while, it felt like everyone was on board with the importance of training and competence in creating the right company culture and the role a well-structured T&C Scheme plays in providing a good company governance structure. But five years on, it feels like whilst the Conduct Rules remain in focus, the importance of training and competence seems to have fallen to the wayside.
Some may have even found this publication as part of that new found interest in T&C. Whilst I can accept that not everyone will share my passion, training and competence is far too important for it to be treated like the poor relation, constantly having to justify its importance and fighting for attention. So, in an era where every cost must have a benefit, how do we make sure training and competence continues to take centre stage? I’ve come up with few common challenges; some heard more recently than others and some more frequently than others, along with my typical responses. They may not win over every reluctant stakeholder, but they may help to guide the focus back in T&C’s direction so feel free to cut and paste where needed.
A T&C Scheme doesn’t have to reinvent the wheel, it can ‘wrap its arms around’ other existing activities
- We don’t need a T&C Scheme as our activities are not regulated.
Whilst it is true that there is no regulatory requirement to have a T&C Scheme (TC2.1.14), the competent employee rule (SYSC5.1), which covers ALL employees, irrespective of whether they are conducting a regulated activity or not says that firms ‘must employ personnel with the skills, knowledge and expertise necessary for the discharge of the responsibilities allocated to them…’. So irrespective of a colleague’s activities, to meet the competent employee rule, a firm will need some means of assessing and demonstrating an employee’s competence, including how they achieve ‘a good standard of ethical behaviour’. Ultimately, most firms opt for some form of T&C Scheme as it allows them to demonstrate how their systems and controls enable them to satisfy themselves of the suitability of anyone who acts for it.
- T&C is just box ticking for the sake of it.
It was…once…I agree. Back in the PIA days, it was ‘do three of these’ and ‘two of those’ and you were competent. Things have thankfully moved on and most good Schemes now talk of minimal numbers to encourage the behaviour of responsibility and accountability. If one observation of a skill is good enough to demonstrate competence, it’s enough – as long as you have other means of checking outcomes and monitoring a colleague’s activities. And in addition, the supervisor has the skills to back up their decision including demonstrating their ability to monitor, identify and act on other information that may indicate a colleague’s competence, or not.
- We have all of this activity already; a T&C Scheme will just be duplicating it.
A T&C Scheme doesn’t have to reinvent the wheel, it can ‘wrap its arms around’ other existing activities. A common perception to overcome when you start talking about Schemes is how much additional effort it will take. If you demonstrate how you are not looking to increase the workload but more embrace existing activities and make their life easier by bringing it all under one regime, you are half way there before you’ve even started.
If you prefer to go with the proverb that ‘attack is the best form of defence’ then you could also try flipping the approach so that you ask the questions rather than provide the answers. I find that the three questions listed below have the greatest impact, especially if the challenger can’t provide an answer and you can then follow up with ‘a T&C Scheme can do this for you’.
- How do you demonstrate a fair and consistent approach to a colleague’s development?
- How do you ensure that colleagues have a regular opportunity to share concerns and feedback on issues that may be occurring in their daily activities?
- How do you drive the company’s culture and preferred behaviours?
With Training and Competence remaining a firm focus of the FCA, it’s time to raise T&C’s profile again. Adhoc discussions are starting to occur as we start to move forward post the challenges of COVID19 and whilst both lists are certainly not exhaustive, they may just help when you are caught out by one of those unexpected conversations.
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