Q: In its recent “Regulatory & Supervisory Outlook Report,” the CBI argued that a sound culture and effective governance are consistent “mitigants” across all risk areas. Can you expand upon this? What provides your conviction in this view?
A: Our supervisory experience tells us that firms with good governance, culture and controls are much better set up for success — both in terms of growing safely as well as dealing with the risks facing them and their customers. And on the other hand, we have seen what happens when external shocks or major change coincide with poor management behaviour — not to mention how the risks of consumer or investor detriment rises when poor business practices and weak business processes are allowed to persist within a firm.
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