An empirical investigation into the corporate culture of UK listed banks
| DOI | https://doi.org/10.1108/JFRC-06-2016-0048 |
| Pages | 120-134 |
| Date | 12 February 2018 |
| Published date | 12 February 2018 |
| Author | Paul Cox,Diandra Soobiah |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial compliance/regulation |
An empirical investigation into
the corporate culture of
UK listed banks
Paul Cox
Department of Accounting and Finance, University of Birmingham,
Birmingham, UK, and
Diandra Soobiah
Department of Investment, National Employment Savings Trust, London, UK
Abstract
Purpose –This paper aims to report new researchinto how small groups of people –officers, directors and
managers –are guidingthe governance, design and delivery of conduct and culture programmesat UK listed
banks.
Design/methodology/approach –The research spannedtwo whole years between 2014 and 2015. The
method involved some30 face-to-facesemi-structured meeting interviews. A pre-agreed template was used to
score and write detailednotes. From many repetitions, themes and cross-interview commonalities,a rich set of
findings evolved.
Findings –Banks that made the most improvement during the investigation activated culture
predominantlywithin the business. Centring the culture programmewithin the business was associated with
a focus on the middle and the grassroots level of the organisation. Banks that made least improvement
activated cultureprincipally “from the top”. Centring the culture programmeat the top was associated with a
focus on control, conformance and structure. The finding of relatively greater performance when culture
programmes were activated within the business contrasts sharply with recommendations from regulators
and conventionalwisdom that the establishment of corporateculture is necessarily a top down exercise.
Originality/value –Culture is intangible, and as such often overlooked,and this research contributes to
that gap in knowledge through insight and evidence based on direct empirical analysis. This work ranks
banks differently than published corporate governance and sustainability ranking from third-party service
providers, suggesting a focus on culture performance contributes a different perspective to that based on
more availablepublic information for corporate governance.
Keywords Governance, Bank regulation, Banking, Banks, Conduct, Culture, Metrics, Measures,
Investment management, Pension funds
Paper type Research paper
1. Introduction
A strong belief to have emerged in recent years has been that culture within banks is both a
weakness and a potentially systemic risk. Improved corporate culture is essential to restoring
public trust in the banking system, encouraging long-term saving and enhancing financial
stability (Financial Stability Board, 2014;Financial Reporting Council, 2016;Banking Standards
Board, 2016;Prudential Regulatory Authority, 2016;Financial Services Consumer Panel, 2016).
The authors are grateful to Ashley Claxton Hamilton from Royal London Asset Management for her
help and support, as well as to the many practitioners who have generously given their time and
insight in the course of the engagements. All opinions are those of the authors.
JFRC
26,1
120
Received14 June 2016
Revised16 January 2017
Accepted19 March 2017
Journalof Financial Regulation
andCompliance
Vol.26 No. 1, 2018
pp. 120-134
© Emerald Publishing Limited
1358-1988
DOI 10.1108/JFRC-06-2016-0048
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