Those in senior leadership positions or responsible for organising training, need to ask two important questions about their SMCR compliance planning:
- Does it support your culture, values, objectives and drive compliant behaviour?
- Does it ensure individuals understand and can apply the rules in their role?
Even if you cannot currently say yes to both questions, we hope that this SMCR training roadmap can help ensure that you can in the future.
1. Driving the right behaviours through training
The regulator makes it crystal clear that a healthy culture is aligned to a firm’s purpose, good leadership, appropriate rewards and effective governance, and that conduct and culture will remain a key focus of their engagement activity.
Successful firms will continue to shift from ticking the ‘regulatory box’ towards a culture that holds ethics and values at its core.
It makes sense to aim to prevent misconduct, saving the cost and potential harm to consumers. A values-driven approach also encourages everyone to be accountable for their conduct, no matter what role they perform.
The FCA Stocktake Report found insufficient evidence that firms were mapping the Conduct Rules to their values. Training provides a great opportunity to do this and help drive the culture and conduct within your firm.
Are your SMCR & Conduct Rules training plans...
- Aligned with your company values and objectives?
- Covering what each population needs to know, understand and be able to do?
- Tailored to ensure it is relevant to the workplace and role?
- Supported and prioritised by senior leaders within the business?
- An integral part of the onboarding process into the role?
- Validated to ensure the training is effective?
- Regularly reviewed to ensure it remains up to date and relevant?
- Followed up to ensure the desired learning is embedded?
It's great if you can answer 'yes' to all of these questions. But even then there remain challenges to your SMCR training success.
You will still need to encourage those who work in front, middle, back office, control and support functions to feel personally responsible for their conduct.
And your Board of Directors and senior management also need oversight of the conduct within their organisation.
Challenge yourself regarding your training effectiveness. Ask yourself the questions that we have posted here. We have produced a desk aid detailing the dos and don'ts of SMCR Training Best Practices.
2. Know, understand & apply
Let’s now explore our second question, which delves deeper into the training itself.
a. Document knowledge, skills & behaviours
You need to clearly document the knowledge, skills and behaviours required for each key role within the Senior Manager, Certified, Conduct Rules, Non-Executive Director populations.
The FCA is clear that they expect individuals to know the rules and have a deeper understanding of how they apply in practice as relevant to their role. So, it is vital that your training demonstrably facilitates this and below we have provided our key success criteria against which you can measure your SMCR and Conduct Rules training solutions.
b. Map learning paths to roles
You need to create clear learning paths for every role in each population – Senior Manager, Certified, Non-Executive Director or Conduct Rules.
This allows you to ensure that any training solutions are used with the right populations and allows you to tailor them to ensure that they are relevant to individuals roles.
Let’s not forget, this is not only a key requirement of our regulator, but it also means that the individual is much more likely to take on board the learning and actually apply it in their role, thus driving the behaviours you wish to see.
Learning paths allow everyone to know exactly what training is required and when. This makes it easy to track that everyone is getting the training they need at the right time. It also allows you to demonstrate to the FCA how you are meeting their rules regarding these training requirements.
We have created a 3-Step SMCR Training Model that provides a simple path and some solutions to help you achieve this.
c. Balancing practical & online learning
Your training needs to strike the right balance between digital and more practical learning solutions.
Whilst e-learning solutions can be a great way to provide knowledge, they are unlikely to be as effective at ensuring that the learner understands this information and, more importantly, can apply it within their day-to-day working practices.
It is important to ensure that you build on your digital learning, bringing it to life by using realistic, and challenging case studies and examples that are relevant to the individual’s role. This allows the individual the opportunity to confirm their understanding and put the learning into practice.
d. Managerial alignment
An effective way to ensure your training is tailored to individual roles is to include line managers in the delivery and facilitation of their subordinate's training.
Managers are best placed to bring the rules to life in the right context for the individual and answer any questions they may have.
Of course, in order for this to be effective and consistently delivered across your firm, it is important to equip your managers to be able to do this competently and monitor their activity to provide any further support, where it is needed.
e. Build checking mechanisms
Standard online testing, such as multiple-choice tests, goes some way to checking knowledge, and to a lesser extent, understanding.
However, you will need to have other checking mechanisms in place to confirm that individuals can apply the rules in practice.
f. Ensure learnings are applied
Finally, you need to check that learning is embedded into behaviours and working practices.
It’s one thing for an individual to be able to demonstrate that they can do what is required, it’s another for them to actually do so in their role.
Therefore, actively monitoring the activities and behaviours you want them to be demonstrating is key.
Your SMCR and Conduct Rules training should be comprehensive and practical, ensuring that it is tailored to individual roles thus maximising the individual’s ability to understand and apply the rules in practice.
This will support your firm in driving the culture and conduct desired and, in doing so, meeting the regulator's requirements.
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