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It’s time to join the culture club or fall out of fashion

by Anna Lane, CEO |

The FCA’s Business Plan 2020/21 slipped out last month almost unnoticed.  With COVID-19 turning even the best-laid plans upside down, it was perhaps no great surprise to hear that the regulator needs more time to reflect on what the current crisis might mean for long-term strategy and the shape of the organisation. When the new CEO is finally appointed, they will certainly have a long to do list for their 100-day plan.

It was telling that, in the limited space available, the FCA hammered home their medium-term priorities, putting both customer outcomes and culture front and centre. It reads like a final wake-up call for any management team holding out against the inevitable tide of change.

The FCA want to see firms embracing business models and strategies that minimise potential harm to customers. They call out four key drivers of culture – purpose, leadership, approach to rewarding and managing people, and governance. Interestingly for an organisation that many customers don’t even know exists, this approach perfectly encapsulates the emerging zeitgeist and reflects our own conversations with investors. While 2019 was the year the world woke up to the climate emergency, 2020 is being increasingly dominated by talk of the need for social reform. A defined purpose and clear cultural values are no longer a nice to have – they will be essential for firms that want to survive (and even thrive) in a post-pandemic world.

In our latest survey of UK retail investors, a significant majority (70%) told us they will consider a company’s behaviour during the pandemic in their future investment decisions. This rises to 81% amongst Millennials. As a member of the Wise Society puts it:

“I think this crisis should serve as a wake-up call, to government, businesses up and down the country and people should look deeply into how they operate as a company.”

This extends not just to the companies sitting inside portfolios, but also to the firms that consumers trust to manage their money. It will come as no surprise that we have tested a few assessment of value reports recently. What has become apparent is that investors don’t just want to read about the outcomes of the assessment, they want to get a sense of what the company stands for. How do you behave as a business? Company attitudes towards their employees, their customers, wider society, and the environment will have a direct impact on future commercial success.

The focus on culture isn’t just a passing fad – companies that fail to sit up and take note will be consigned to the history books.