The Financial Conduct Authority (FCA) has made it clear: it’s not just looking at financial fraud and compliance breaches. It’s also paying attention to: 

• Bullying 

• Harassment 

• Toxic leadership 

• Psychological safety 

For senior leaders in financial services, insurance or investment firms, your personal conduct and the culture you create are now part of your fitness to operate. That’s a significant shift. 

Culture has always been a business risk. But now, it’s a compliance one too. 

At the same time, the UK government is proposing legislation that would ban the misuse of NDAs to cover up misconduct. This means: 

• You can’t pay for silence to protect reputations 

• Boards can’t rely on legal settlements to make problems disappear 

• Misconduct will be harder to bury 

These changes signal something important: silence is no longer a safeguard. 

Many senior leaders still treat culture as something for the “People Team” to handle via policy, training, or values statements. But that’s not where culture really lives. 

Culture lives in: 

• Everyday behaviours 

• What gets rewarded and tolerated 

• How leaders respond when things go wrong 

With these new changes, here’s what boards and leadership teams need to know: 

1. Culture is compliance 

2. Brushing things under the carpet could cost you your licence to operate 

3. Psychological safety isn’t optional anymore 

If you lead a team in a regulated sector, ask yourself: 

• What behaviours are being normalised? 

• Are people safe to speak up about what’s not working? 

• Is your culture helping or harming your organisation’s licence to trade? 

Toxic culture in regulated industries is now on the radar of regulators, legislators and the public. That’s not going away. 

You can read more on the NDA reform in this article from The Guardian. 

I work with regulated organisations to diagnose and repair toxic culture, before it becomes a risk to reputation or regulation.