Reputational and Behavioural Risk

Date: On a date of your choice
Location: Delivered as an online interactive seminar
Event Code: RBR051021

Course Details

Regulators quote the latest behavioural research to demand that firms give more ‘appropriate answers’ to the new challenges of conduct control. Senior Managers must identify and answer, in person, for the ‘publicly acceptable and expected’ conduct of all staff, or face prosecution for allowing ‘customer detriment’.

At the same time, regulators are raising new questions about management of reputational risk. This risk flows from the ‘social responsibility’ that both the FCA and PRA have high on their agendas. A firm’s reputation is now subject to regulators’ demands to see reputation-aware “culture audits”. These reflect changing priorities for Board risk governance and firms’ response to social expectations.

For Boards, it’s reasonable to be concerned. Many Directors privately ask us: Will the new Conduct rules on behavioural and reputational reporting improve constructive challenge? Or, equally possible, might they lead a Board to “throw a token Senior Manager under the bus”, to buy off the threat of enforcement action?

As an attested Senior Manager, if you want to know more about how to effectively control this risk and satisfy the regulator about governance and reporting of these risks, this highly interactive briefing is for you. The session will cover what the Board must include in behavioural reporting, including Conduct dashboards and ‘culture audits’; and how the controls of reputational risk affects prudential reporting.

Over time, from each Board member ultimately to every employee, new insights are put to work until general risk-awareness fortifies all three lines of defence, provides earlier warning of strategic risk and uncertainty.


1. Overview

  • What drives the agenda for ‘behavioural regulation’; why regulators will expect firms to report reputational risk as a new prudential control
  • Behavioural control strategies that used to work– but now don’t. How to change our game in response to hazards, old and new
  • Costs and other business impacts of “bad behaviour”; simple methods for assuring all-staff engagement in “acceptable”(and better) behaviour
  • How “culture audits” set a new agenda for Board risk governance and reputation management; overview of latest sector responses

2. Sources of risk to reputation; the ‘risk-aware working’ response

  • What is your ‘social licence’ and what do regulators want you to say about it? How stakeholders (including customers and regulators) respond to your risk-taking; three vital moving targets and how to track them
  • What conventional analysis fails to capture: How business leaders can overcome dependence on econometric models, and find new MI that helps manage behavioural and reputational risk   
  • Under-used reputational assets; how to make more of them; simple ways for employees to start “working reputation-risk-aware” - transforming hazards to assets, refocusing misdirected controls, and understanding “what matters most”
  • Five unnoticed behaviours that lead firms to collapse; new methods to prevent this happening.  Easy ways to get all staff into risk-aware working, protecting business value and reducing cost of capital.

3. Managing reputation risk with a Risk Culture dashboard

  • Research update on the latest approaches to “culture audit”; which measures will keep the regulator happy? Essential KRIs for reputation and culture.
  • Why misconduct may thrive, despite efforts to stamp it out: challenging five “justifiers”
  • The most commonly missed early-warning signs of reputational risk
  • Three Boardroom biases that feed reputation risk; how to avoid the three commonest risk-management fallacies
  • Using powerful new predictive tools to identify behavioural risk hotspots: what the behavioural lens reveals, that a conventional risk picture doesn’t

4. Putting a risk-aware culture to work, for business value and reputational risk control

  • Consolidating reputation as a capital asset: Practical tools all staff can use, engaging under-recognised skillsets
  • What “good behaviour” is now expected of firms: the new common ground between regulators, customers and investors
  • The business and capital value of keeping ahead of Conduct regulators’ ‘moving targets’: where to look for significant changes.
  • Living the Board Director challenge function; leading a culture that protects reputation by rewarding the right kinds of risk-awareness

Key Benefits

  • Discover what’s driving the regulator’s focus on behavioural and reputational risk: How ready is your firm to answer the regulator’s demands for the “new indicators”? 
  • Understand where your firm stands in relation to others’ Conduct programmes, and limit your personal Conduct liability, as regulators look more closely at individual Directors in banking, insurance and asset management.
  • Discover how the whole organisation benefits from engaging the risk-sensing capacity of all staff, to manage reputation and nurture Conduct-compliant ‘good behaviour’ naturally throughout the business.
  • Identify sustainable strategies: learning from case examples of others’ successes and failures, what actions should Boards take to demonstrate their grasp of Conduct, Culture, and Reputational reporting in their business.
  • Discover how Boards can most effectively act to demonstrate an ‘acceptable’ approach to grasping these risks, by locating common sources and hidden hazards of reputational risk; and knowing which MI / other sources best inform a robust dashboard report.

Your Consultant - Dr Roger Miles

Dr Miles leads forum groups for the CRO and Conduct principals of many regulated financial firms at UK Finance, where he heads Conduct and Culture indicator research across the sector.

He regularly debriefs with leaders of UKF’s 300+ member organisations on their progress with ‘dashboarding’ behavioural risk factors, guiding as to how to set up indicators to ensure best practice in modern governance of risk.

He also lectures on risk perception and behavioural regulation (Cambridge University; UK Defence Academy; London Institute of Banking and Finance).  His latest book is Conduct Risk Management: A behavioural approach (Kogan Page, 2017).




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