The senior manager regime - communication matters

In between the excitement of the new EBA Guidelines (on which see my latest blog) I was lucky enough to get some time last week with one of our communications specialists, Will Barkway. We easily filled the time we had discussing the communication challenges of the senior manager and certification regime (SMR and CMR) and how firms should tackle this.

In part, it simply goes back to the fundamentals of good communication - the new regime is effectively putting into place a huge change programme that will touch most of a firm's operations and people in some way. As many of you will know, big change programmes often survive or fall on the quality of their communication. Indeed Will had some pretty sobering stats on this - one of our recent surveys found that only 50% of change programmes accomplished their goals on a sustained basis. The problem? Employees were resisting rather than embracing the change and the reason for this was that they did not understand the changes they were being asked to make. But getting this right is far more than business as usual - the greatest value will be gained by communications working in direct collaboration with the SMR and CMR specialist - helping shape the messages and develop the foundation for implementation. This combined approach will help accelerate the trust agenda throughout the organisation.

This is a concern for anyone undertaking major organisational change, but it is particularly worrying for those tackling the implementation of SMR and CMR. Here, non-compliance is not an option and success relies on employees embracing change - accepting and "living" their new responsibilities and expected behaviours, whether at the most senior or junior levels. If this does not happen, not only will firms struggle to comply with the new regime, but the unintended consequences on the culture and operational effectiveness of the organisation could be huge.

This, then, links into one of the buzz words in financial services - trust. SMR and CMR require employees to trust their leaders, peers and direct reports to each fulfil their responsibilities and take appropriate ownership and accountability. If this does not happen, there is a risk that the requirements of the regime could lead to a blame culture, or a tendency towards "over" governance and siloed approaches to critical business issues. This is clearly neither the intention of the regulation, nor aligned with the best interests of banks. Therefore, one of the real values of a step change in communication will be to set a precedent for new ways of working.

So how does Will advise firms manage the issue?  A few key steps form the basis - firms should:

  • Develop guiding principles fora remuneration strategy
  • Agree stakeholder groups and preferred communication approaches
  • Build a narrative and key messages that will underpin the communication approach through the programme cycle and onwards to business as usual; and
  • Develop content and materials that reinforces new and desired behaviours and helps engage and inform stakeholders in this complex area
  • Create two-way forums that allow employees to see that they are "not alone" and show the real value of the changes.

In short, the key is developing a well-managed approach to communications that begins now as part of the process of change, rather than once decisions have been made.


For more information contact me or your PwC advisor.

Katy Bennett | Financial Services Human Resources Senior Manager
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