In his speech at the MetricStream Governance, Research and Compliance Summit in London on 11 November 2015, Mark Steward set out his views on culture and governance.

Culture is in danger of becoming a buzz term, an integrated ideal of good governance, regulatory compliance and fair process. Intangible, theoretical, in danger of becoming merely regulatory...

Yet there is value in culture and without it there is cost, as we have seen in recent years.

One way of knowing when culture has failed is when things go wrong and get worse or just go wrong again. This may be worth some thought.

  • How quickly does it take for problems to escalate to the right person or group of persons for effective decision making or action?
  • How many problems linger in the inbox or the draft box or the bottom drawer beyond their easily fixable date?
  • How difficult is it to fix things once they are detected?

He stated that 'more is needed' to achieve good governance, regulatory compliance and fair process, and identified:

First, a detailed understanding of the nature of the business. A good effective understanding of the nature of the business means knowing how the front line, the middle management and the senior management actually operate.

Secondly, because senior management cannot be watching everything all the time, there need to be effective systems and controls to ensure the business is operating effectively and in accordance with standards of conduct that have been designed and approved by senior management

Thirdly, there needs to be a healthy dose of reality. The paradox of systems and controls is they can lull senior management into a false sense of security. Systems and controls cannot be ‘set and forget’.

A full transcript of the speech can be found here.

The Senior Managers and Certification Regime challenges Firms to drive the cultural change within their organisation that is discussed in Mark Steward's speech. Many Firms are forging ahead with projects to meet the new regulation and enhancing their Risk and Control Frameworks accordingly. However, is this reaction simply about regulatory compliance or will it truly provide the 'more that is needed' and lead to cultural change?

Mark Steward is the Director of Enforcement and Market Oversight at the FCA

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