The Financial Conduct Authority’s board has warned the regulator must stay watchful over potential staff departures as its new chief executive looks to drive through a bold new programme for change.
The nine-person board tasked with holding the UK’s financial regulator to account has highlighted the “challenge” of implementing ambitious plans to reform the watchdog, set out by new head Nikhil Rathi, “whilst continuing to foster staff pride, retention of top talent and motivation”.
The group which includes former The Co-Operative Bank chief executive officer Liam Coleman and HSBC’s former global head of strategy and planning Bernadette Conroy, “discussed the complexities” of driving forward Rathi’s so-called “transformation programme” and “the considerable change” it would require within the UK’s top markets watchdog, according to minutes from its latest meeting on 3 June, posted online on 7 July.
“The board… discussed the challenge of converting words into demonstrable change whilst continuing to foster staff pride, retention of top talent and motivation,” the meeting minutes read. “The importance of two-way communication and engagement, both internally and externally, throughout the transformation journey was therefore recognised.”
Financial News reported in June that the FCA had lost 93 of its most senior staff as part of a “voluntary resignation programme”, prompting fears that star workers are fleeing the watchdog just as it battles the twin crises of Brexit and the pandemic.
The departures come at a critical juncture in the eight-year history of the UK markets watchdog. Under the leadership since October of new boss Rathi, the FCA is grappling with mounting workloads as Brexit gives more powers to UK regulators. It is also tasked with getting back on track any initiatives derailed by the pandemic, all while proving it can stay on top of a likely a spike in market abuse cases.
According to the meeting minutes, the board opted to “receive assurance” on how Rathi’s transformation programme “was being received and progressed and how the accompanying risks were being identified and managed”.
Rathi said in November that he wanted to focus on “maximising [the FCA’s] use of data and technology, making the FCA more diverse so that we can bring a full range of perspectives and ideas to our work, and using the lessons of this extraordinary year to build on the best elements of our organisational culture”.
He also referenced issues ranging from increasing pressure on the financially vulnerable, to climate change, to forming a sense of “proper democratic oversight” for the regulator’s own work as areas that he wanted to see the watchdog focus on under his leadership.
“This will allow us to deliver more for consumers, firms and markets by making us as effective and efficient as we possibly can be,” he said at the time.
A spokesperson for the FCA was contacted for comment.
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