Well, guess what? FINRA does not agree with this statement to such a degree that culture is now part of FINRA’s exam priorities for 2016.
While the exam priorities acknowledge that “FINRA does not seek to dictate firm culture”, it is an important consideration when assessing a firm’s culture of compliance. After all, such a culture starts with leadership at the top.
- Whether control functions are valued in the firm.
- Whether policy or control breach are tolerated at the firm.
- Whether the firm proactively seeks to identify risk and compliance events.
- Whether supervisors are effective role models for firm culture.
- Whether there are sub-cultures at the firm (such as in branch offices) that do not confirm to the overall firm culture are identified and rectified.
FINRA spelling out these “five indicators” are meant to tell firms what you should be looking for in your own organization. If you do not have meaningful answers to each of these items, it may be safe to say that you do not have a firm culture that FINRA will like.
So don’t be afraid to look yourself in the proverbial mirror and assess your culture. Is it one that promotes compliance? If the answer is no, you have a lot of work to do before your next examination.