The Financial Conduct Authority’s board has warned the regulator that it must demonstrate it is “seeking to understand the concerns of staff”, amid mounting confusion over reforms proposed by new boss Nikhil Rathi.
The nine-person board tasked with holding the UK’s financial regulator to account has highlighted the need for “two-way” communication and engagement “to ensure the organisation is listening” to its roughly 4,000 employees as the watchdog consults on a raft of changes to pay and conditions.
The group, which includes former The Co-Operative Bank chief executive officer Liam Coleman and HSBC’s former global head of strategy and planning Bernadette Conroy, said that the FCA’s senior leadership team and its staff consultative committee — a group of employees who discuss issues with management and conduct polling on the FCA’s workforce — both had a “critical role” to play in supporting employees through a period of significant change at the watchdog, according to minutes from the board’s latest meeting on 21 and 22 July.
“The board discussed the challenge of integrating internal and external communications and ensuring that individual issues do not drown out the wider transformation message,” meeting minutes posted online on 7 September read. “The board encouraged the use of examples to illustrate how transformation initiatives will create opportunities and benefits for staff and make the FCA a better regulator.”
The meeting followed an FCA staff poll, conducted in late June and early July, in which 56% of the respondents said they “don’t understand why the organisation needs to transform”, noting that “significant change in leadership in the FCA…has caused uncertainty for many”.
A leaked FCA memo on the survey, reported by Financial News, said that FCA bosses were set to hold weekly morale-boosting meetings with employees in a bid to better explain Rathi’s agenda.
It comes amid an already challenging year, in which the watchdog’s employees have been navigating compliance headaches arising from both the Covid-19 pandemic and Brexit.
Under the leadership of Rathi since October 2020, the FCA has been grappling with mounting workloads as the EU departure gives more powers to UK regulators.
It is also tasked with getting back on track initiatives derailed by the pandemic, all while undergoing significant structural changes, as well as changes to its top ranks, as part of Rathi’s reform plans.
Rathi has appointed six new hires to the FCA’s executive committee since taking on his post, leaving just three senior managers at that level who pre-date his tenure.
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