Leaders rise to the Challenge

UK banking leaders join with the Institute to establish the industry’s own “Gold Standard” of professionalism – the first time the sector has attempted to define an agreed set of ethical, professional and technical standards. Chartered Banker breaks the news.

Several influential leaders in UK banking are joining forces to launch an imaginative initiative which will, for the first time, attempt to codify best practice and create agreed standards in banking. Led by Lady Susan Rice, Managing Director of Lloyds Banking Group Scotland, their inaugural meeting at the start of December was the first step towards the creation of a Chartered Banker Professional Standards Board (CB:PSB), under the auspices of The Chartered Institute of Bankers in Scotland, the UK’s sole remaining professional institute dedicated to banking.

The group of finance sector leaders, who will be profiled in our next issue, will determine the shape of the proposed professional standards body over the next year or so. Supported initially by a Development Group of senior colleagues, the CB:PSB will set rigorous standards to codify and build on best practice for bankers.

“The global financial crisis has profoundly shaken the foundations of our industry,” explains Susan Rice, “and there are many steps we must take to remedy that. One concerns professional standards. “Our aim is to create a body of standards which enshrines the very best ethical, technical and behavioural qualities.

It’s what our colleagues in the sector expect and it’s certainly what our customers deserve.

“We all care deeply about the banking profession. We care about how the outside world views our industry, and how colleagues feel about their chosen career.

“But, however much we all know the extent to which bankers already demonstrate the highest levels of professional and technical expertise, the truth is that at present there are no established benchmarks against which colleagues and customers can measure our professional capabilities. We wish to remedy that.”

Susan Rice describes this as a “timely and necessary initiative” being conducted under the auspices of the world’s longestestablished and most experienced banking institute. “It is uniquely positioned to help the industry articulate the professional standards to which we adhere – and those to which we aspire,” she says.

“For bankers, the over-riding aim is to enshrine a culture of professional development and continuous improvement. In the wake of the financial crisis, our biggest collective challenge is to re-build customer trust and public confidence.

“This would be easier if banking, like other professions, had agreed educational standards and accepted codes of ethical behaviour. But, if anyone asks today: ‘What do you need to know to be a banker?’, there’s simply no definitive answer. That’s why the industry needs a body to define the key components of banking professionalism.” Everyone will benefit, she argues.

Customers will be reassured by an unequivocal demonstration of the banking sector’s determination to set and codify aspirational industry-wide standards covering such issues as professionalism and ethics, technical knowledge, leadership and management.

For bankers, the benefit is that this sharpened focus on standards of professionalism and continuous personal development will instil “a reinvigorated credibility”.

“But let me stress,” Susan Rice tells Chartered Banker, “the emphasis of the Chartered Banker Professional Standards Board is on persuasion not coercion. What’s not being proposed is another regulatory body with disciplinary powers. “Rule-making is not part of this remit.

It’s our conviction that a great deal can be achieved by encouragement, example and leadership.” To carry weight and conviction, she argues, it will be important for the PSB to be constituted in a way that “ensures its demonstrable independence”.

Institute Chief Executive Simon Thompson explains that the initiative is being carefully planned. After the inaugural December meeting of the Board, the next step will be the creation of a Development Group to carry forward the PSB’s agenda.

“We visualise that the Development Group itself will have the authority and width of experience to match the ambition of this project. Over the next few months, it will supervise the necessary research and consultation needed to define the structure and goals of the Board.”

Its timetable, he says, “needs to reflect both the urgency of the task and the scope and sensitivity of its objectives”. The Development Group will aim to:
• propose a full Prospectus by July 2011
• identify the need for, and industry value of, the initiative
• consider how similar initiatives elsewhere may be aligned with the body
• describe the governance and structure of the body
• suggest the funding and administrative requirements
• establish the body’s relationship with industry regulators and other stakeholders
• determine how the initiative’s progress will be measured and assessed.

The work of the Development Group will be fully serviced by the staff of the Institute, supported by a secondee from Deloitte. The Board will commission the Institute to undertake any relevant research, and supervise a public consultation on its draft standards. Among the key issues likely to be considered and determined by the Board itself are:
• areas of practice where professional standards are required
• the final scope of professional standards for bankers
• how individuals and organisations can demonstrate their adherence to the standards
• how to engage Boardrooms to ensure full support for the standards.

The first woman to head a UK clearing bank

Lady SUSAN RICE CBE, a Chartered Banker, is Managing Director, Lloyds Banking Group Scotland. She was previously Chairman and Chief Executive of Lloyds TSB Scotland, the first woman to head a UK clearing bank.

Susan previously worked at Bank of Scotland and NatWest Bancorp in New York and, in her earlier career, she was a dean at Yale and Colgate universities in America.

She sits on the Court of the Bank of England, where she chairs the Audit & Risk Committee and she is Senior Independent Director and chairs the Remuneration Committee of Scottish and Southern Energy. She also chairs the Edinburgh International Book Festival and Edinburgh’s Festivals Forum.

A frequent speaker on the future of financial services, leadership and corporate responsibility, Susan has helped create several social finance entities both in the US and UK. She sits, inter alia, on the HMT Financial Inclusion Taskforce, Scotland’s Futures Forum, Scotland’s 2020 Climate Leadership Group and the Advisory Board of Oxford University’s Said Business School.

Susan has degrees from Wellesley and Aberdeen University, and honorary doctorates from seven Scottish universities. She is a Fellow of the RSA and the RSE.

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