30 October 2019

Time to review your culture and policies?

Man in suit with whistle around his neck

Evidence of acting to the detriment of a whistleblower could have serious consequences. With whistleblowing complaints on the rise and the requirements of SM&CR, RWA Business Consultancy share a timely reminder on the importance of having a culture and policies that help staff feel confident about raising issues and challenging behaviours.

Whistleblowing is the act of telling the authorities or the public that the organisation you are working for is doing something immoral or illegal (CollinsDictionery.com).

At the beginning of this year, The Financial Times reported that a Freedom of Information Act request from accountancy firm BDO revealed that the number of whistleblowing complaints to the FCA increased by 24% in 2018. Of this, there was an increase of 232% for complaints relating to treating customers fairly.

This increase seems to have coincided with the introduction of the Senior Managers and Certification Regime (SM&CR) within the financial sector. As SM&CR will be extended to solo-regulated firms, including insurance brokers, from December this year, one can only assume that whistleblowing complaints will continue to increase.

To quote the FCA Annual Report and Accounts 2018/19 (for the year ended 31 March 2019):


‘This year we:

Managed and assessed 1,119 whistleblower reports. These consisted of 1,755 separate allegations, and resulted in the following outcomes:

  • in 10 cases, we took significant action to mitigate harm
  • in 85 cases, we took action to mitigate harm
  • 195 cases helped to inform our work and were relevant to the prevention of harm, but did not lead to any specific action
  • 144 cases were not considered relevant to the prevention of harm
  • 685 cases are still being assessed to determine their outcome’.

One example highlighted by the Financial Times is the ongoing investigation by the FCA into the Royal Bank of Canada’s working culture in its London office following dozens of complaints to the regulator about staff treatment.

This supports the current output and thinking from the regulator that SM&CR’s core objectives will challenge firms to display an increased standard of governance, promote a culture of accountability and transparency, and embed values grounded in the fair treatment of both employees and customers.

FCA stance despite their aforementioned limited actions

Despite the FCA’s limited actions, they do nevertheless believe that whistleblowers play a significant part in exposing poor practice in firms and that many have resulted in action taken against firms and individuals. However, there still seems to be some reluctance for individuals to come forward and make a notification, fearful of the impact on themselves as individuals. That is why the FCA expects firms to have in place adequate policies on dealing with whistleblowers and that a senior manager takes responsibility for overseeing these policies. Yet policies and procedures alone won’t shift the balance.

That’s why the regulator, with the assistance of, for example, SM&CR, are looking at firms to establish a culture where staff would feel confident raising issues and challenging behaviour(s).

What steps should be taken?

Offering confidentiality to those speaking up will be of immense comfort to whistleblowers, however, this will be of no value if staff have little or no confidence to approach their employers. A senior individual in the firm (usually a director) should have overall responsibility for whistleblowing, ensuring that that the policies and practices are embedded in the firm’s culture. This may form part of Statement of Responsibilities in line with SM&CR.

Other key actions:

  • Train employees to understand your policy and the process of making a disclosure
  • Protect their confidentiality
  • Establish and maintain written whistleblowing procedures
  • Ensure your policy allows for a disclosure to be made through a range of methods, not just face-to-face
  • Prevent ill-treatment.


The FCA would regard as a serious matter any evidence that a firm had acted to the detriment of a whistleblower. Such evidence could call into question the fitness and propriety of the firm or relevant members of its staff, and could therefore, if relevant, affect the firm’s continuing satisfaction of threshold condition 5 (Suitability) or, for an approved person or a certification employee, their status as such.