Contributions to the Supervisors on Supervision Stocktake
What is the relationship between culture and governance and how does ambiguity about that relationship contribute to uncertainty?
“Ethics in finance is not a mere regulatory requirement; it is the foundation upon which trust is built. As custodians of the financial system, we securities regulators recognize that public confidence is correlated to the ethical behaviour of market participants.
Experience shows that robust governance and trusted institutions are prerequisites for long term competitiveness. Capital flows toward markets where investors feel confident that their interests are protected and that rules are applied consistently. Weaknesses in corporate governance or supervision may attract short-term gains but can deter long-term investment.”
What role do international standard-setters have to play in coordinating culture supervision?
“Maintaining trust in global financial markets requires ongoing collaboration. IOSCO’s members work together to identify emerging risks, share supervisory practices, and promote effective enforcement. This is particularly important when dealing with issues like AI adoption, cross-border misconduct, or corporate governance failures.
Culture and corporate governance must remain central themes in the global effort to support resilient, fair, and competitive markets. Regulatory initiatives that focus on practical steps — such as oversight of culture, evaluation of AI governance, and reinforcement of board responsibilities — can make trust a measurable outcome, not just a rhetorical goal.
This is how we ensure that markets serve their intended purpose: to facilitate growth and innovation, which goes hand in hand with protecting investors and sustaining confidence across borders.”
How can supervisory bodies move to embed culture risk into supervision and governance frameworks?
“Markets work best when investors and participants trust that the rules are clear, that misconduct will be addressed, and that outcomes are not skewed by asymmetric information or unmanaged conflicts of interest. IOSCO enables this trust by fostering consistency in regulatory standards, supporting supervisory and enforcement cooperation, and encouraging compliance with high conduct expectations.
Since the global financial crisis, regulators have increasingly focused on organisational culture as a critical area of interest. Culture drives behaviour, and behaviour determines outcomes — not only for individual firms but for the integrity of markets overall.
Regulators are not in the business of prescribing corporate culture. However, we do have a role in assessing whether firms are actively managing culture in ways that reduce conduct risk and promote good outcomes.”