PROMINENT ITEMS ON BOARD AGENDAS IN 2017
Author: Phil Festa - Director of Non-Executive Engagement
We recently conducted a survey of non-executive directors and company secretaries working in the financial services sector to determine which issues and topics are on their agendas for 2017.
The results of the survey are in – and for the second year running, culture comes out on top, with financial crime and fraud also being key areas of focus. Here, we provide an overview of the results.
OVERVIEW OF THE RESULTS
Our study asked recipients to identify topics they thought would be relevant to their role over the next 12 months.
Over 86% said culture was key for the boards with which they are involved
Nearly all respondents in the retail banking and building societies sector rated culture as a significant topic for discussion. In probing this issue further, we found that non-executives and company secretaries want to understand the role that they and their colleagues should be playing in delivering the right culture internally and externally, and how it can be tracked and measured.
79% of respondents saw governance and accountability as a key issue
The way individuals must respond to the increase in accountability being implemented across many areas of financial services is still an important area of consideration; especially given the imminent extension of the Senior Managers Regime (SMR) across financial services. How accountabilities and responsibilities should be apportioned at non-executive level is anticipated to be a recurring topic of conversation for 2017.
74% viewed technology and innovation (including digital) as key areas of focus
How technology can be channelled to deliver better customer outcomes across the financial services sector is a talking point for many of those surveyed. From the use of robo-advice to engaging better with customers using their channels of choice, and from dealing with complaints on social media to streamlining processes, respondents are interested in the potential for technology to improve the way their organisation works.
Financial crime was a prominent area of interest for 67% of respondents
An emerging theme for this year is financial crime (including the issues of fraud, money laundering, politically exposed persons and sanctions, bribery and corruption, and terrorist financing) and fraud (including scams and cybercrime). Feedback from non-executives and company secretaries highlighted that while boards recognise the impact and risk represented by fraud and financial crime, they are looking to establish firm actions for dealing with it.
At 42%, general data protection regulation (GDPR) has emerged as a theme of increasing focus
How and why personal data is processed, plus best practice maintenance of personal data records and processing activities were cited as areas of concern by those surveyed. Boards want to understand the impact of GDPR on their business and what they can do to be ready for the changes coming in 2018.
Other topics of note included remuneration and incentivisation (56%) and vulnerable customers (44%); specifically how to approach both of these areas in terms of delivering good customer outcomes.
THE FULL BREAKDOWN OF SURVEY RESULTS:
As a result of the increasing focus on their conduct and the extra accountability apportioned to them in the modern regulatory landscape, non-executives and company secretaries are required to understand what’s going on in their organisations to a much more granular level.
From increasing their awareness of exactly how internal culture contributes to customer satisfaction, to finding proportionate ways to manage financial crime risk, it’s clear 2017 will continue to challenge non-executives’ understanding.
* Huntswood is a resourcing & consultancy firm specialising in Governance, Risk & Compliance.