Stand out for the right reasons
After years of planning and preparation, the Senior Managers Regime (SMR) has finally gone live in the banking and insurance industries and will soon be rolled out to the wider financial services sector.
The SMR seeks to boost personal accountability by putting the onus on you as an individual to demonstrate that you’re taking reasonable steps to do the right thing. The regime requires a high level of clarity and is already empowering individuals to challenge the status quo and debate issues that had previously remained untouched. Each senior manager needs to be confident with their personal narrative. The challenges come down to four very fundamental and personal questions:
Drawing on our experience of working with a wide range of organisations, we believe that there are six key foundations senior managers need to consider in order to effectively discharge their responsibilities. You can explore these using the icons below and read a more detailed summary, including information on our "foundations for confidence" in our downloadable Point of View.
The Senior Managers Regime has ushered in an era of very personal accountability.
What can you do to ensure you’re taking the ‘reasonable steps’ needed to do the right thing and safeguard your career and professional reputation?
Building SMR into business as usual is a lot easier when people take the time to understand and engage with the spirit rather than just the letter of the SMR. This includes thinking about what the SMR means for their day-to-day work and its impact on culture. Find out more to explore a case study highlighting the importance of understanding the SMR.
You can delegate tasks but not responsibility. It’s important that the people who input into tasks for which you’re responsible have the time and competence to discharge their responsibilities. You should make it clear who is responsible for what and how roles and responsibilities knit together. Find out more and test your knowledge of the regime and the roles different staff play in determining accountability in a particular scenario.
The assignment of responsibilities is only part of the job. It’s also key to ensure that decisions are made at the right level and that if an issue arises, the right steps are taken to assess the seriousness of the issue and to take appropriate action.
4. Reasonable steps and evidence
In our experience, evidential adequacy is proving a difficult challenge. In order to have confidence, you need to show how you came to a decision, when and where it was discussed and what the rationale for your judgement was.
Regulators want the SMR to line up with business objectives and strategic execution – and a key test is whether ‘the words and music are aligned’.
SMR is the new reality. You need to ensure that new people coming into your organisation understand the implications and that any changes in operating model take account of SMR requirements.
UK Financial Services Risk and Regulation leader, PwC United Kingdom
Tel: +44 (0)7834 251 939
Financial services HR consulting leader, PwC United Kingdom
Tel: +44 (0)20 7804 4957