The research, revealed at a Chartered Institute for Securities & Investment (CISI) seminar this week, cited the need for engagement by staff at the lower end of the organisation as being key, with markedly worse results being obtained where control of the message and policy was solely vested at board level.
Dr Paul Cox, senior lecturer of finance in the Business School at University of Birmingham and a senior adviser to the National Employment Savings Trust (Nest) said:
“Culture is a slow-moving constitution and the evidence from this study is one of years of effort for slight improvement. Culture is interpersonal and embedded by people doing banking day-by-day, which comes from a myriad of inter-relationships and interactions at a grassroots level.
“To get to the heart of culture and provide the shift that banks and regulators desire, much more effort needs to be expended at the grassroots level where interactions, intent and action occur.”
The report findings contrast with the preface of the UK Corporate Governance Code that a key role for the board is to establish the culture, values and ethics by setting “the correct tone from the top”.
The study was based on meetings NEST held with officers and directors of UK banks to discuss their conduct and culture programmes during 2014 and 2015. Nest has over one million members, and invests in all the large listed banks.
It was looking to reduce systemic and systematic risk by encouraging banks to work together to share good practice and to facilitate an improvement in integrity, conduct and competence to lift the performance of all banks in the sector.
The study found that in 2014 and 2015, corporate purpose, organisational culture and staff in the business were the heart of conduct and culture.
The findings showed that from a culture perspective the board should not set the tone from the top. This, the report says, is because a myriad of people interactions constitute culture and therefore we are in danger of reductionism in believing that a board can simply do this.
Simon Culhane, chartered FCSI and CISI chief executive said: “This is an interesting piece of research, especially in the light of work we have been doing over the last two years with a number of international banks. We have seen how important it is not only to have a strong message from the top but active engagement and empowerment across the organisation.”
Based in the City of London, the CISI is a global organisation with representative offices in financial centres such as Dublin, Singapore, Hong Kong, Manila, Dubai, Mumbai and Colombo.