We describe purpose as what a firm is trying to achieve – the definition of what constitutes success. It is the reason why firms exist and the motivation for people to go to work for them.
The paper discusses the benefits of purposeful cultures for firms, their customers, employees and investors. It also discusses how an increased focus on purpose can drive healthier firm culture and how firms can embed purpose in their organisation.
Transforming culture in financial services is a priority for the FCA and should be for firms too. The FCA expects firms to embed healthy cultures as this will lead to better outcomes for consumers, investors and markets, but it is also good for the business and its employees.
Jonathan Davidson, FCA Executive Director of Supervision – Retail and Authorisations, said:
‘The purpose of a firm sits at the heart of its business model, strategy and culture and should lead to better outcomes for consumers, investors and markets, as well as play a fundamental role in reducing potential harm. By sharing a range of insights from industry leaders and cultural experts, we hope this will help firms to adopt purposeful cultures.
‘Culture transformation takes time and consistency, but small changes can make a big difference. I hope that everyone who reads these essays will be inspired to take at least one idea back to their organisation to try for themselves and take a step towards creating more purposeful cultures in financial services.’
A firm’s individual purpose is their own responsibility and, as with culture, the FCA does not prescribe what this should be. However, there are common elements of a healthy culture:
- a meaningful purpose
- an inclusive environment where it is safe to speak up
- effective leadership and governance
- employees that have the necessary capabilities and are motivated by appropriate incentives