Negative indicators
Nothing has changed
You’ve done the mandatory training but are left wondering so what
Feeling bureaucratic
It's become an exercise in form filling
Positive indicators
Increase in internal discussions about where the boundaries lie
More internal speak ups
Discussions about which senior manager has responsibility for X
Changes to your committee meetings – better minutes, more structured discussions, senior managers challenging each other
Senior managers talking about the risks they own.
By now the process aspects of SMCR should be settling down into their own rhythm and the cultural aspects will be causing debate and driving change.
If you are leaning more towards some of the negative indicators then it’s time to reassess and tweak your SMCR implementation.
Here’s our top five areas to check:
1. Do you have unallocated senior manager responsibilities
Senior managers should be really clear about where their responsibility and accountabilities stop and where those of their counterparts start.
By working through topics such as:
reporting
settlements
employee hiring and disciplinary
conduct
cyber & information security
technology risks
financial crime risks
it will quickly become apparent just how comfortable senior managers are about where their responsibility stops and the other’s starts.
2. Engagement at committees
Committees and other governance meetings should be changing.
Committee membership is often designed based on who are the key decision makers and, under SMCR, who is personally accountable.
This means committee members need to be engaged and challenging.
Minutes need to reflect who was there, even if for part of the meeting and which individuals challenged and about what. This contributes to evidence that senior managers are exercising reasonable steps.
3. Recognising accountability
Senior managers that fully understand what they are accountable for will look for their own assurances about how things are being done. Very often leading to more checks and tests in the first line of defence.
As a result Compliance and Risk should start becoming more of an independent second line advisory function.
4. Conduct Boundaries
Individuals and people managers will be checking their understanding about what is and is not good conduct.
There will be discussions about conduct outside of work and whether that is or is not relevant. The answer to that question is that it depends on whether the conduct calls into question the integrity of that individual.
5. Handovers
If you are very unlucky a senior manager will be moving on and you’ll be discussing what their handover should look like.
Hopefully you’ll be saying that’s easy, they’ve documented their reasonable steps and we can simply pass that over to the interim \ incoming senior manager. If not, pick up a suite of templates from our shop and get them completed.
