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Talent managers have ‘prime role in changing culture’

“The more senior you become, the less dependent your success is on technical skills than on softer skills, such as networking and the ability to influence and to get things done in an organisation.”

LESLEY UREN, PA TALENT Management expert

Lesley Uren 

Financial Times

5 June 2013 

Lesley answers questions about the relationship between businesses’ need to achieve cultural change and the new UK financial regulatory regime

What are the regulatory changes? 

They result from the Financial Services Act and put financial stability at the heart of the UK financial services industry. The Bank of England’s Financial Policy Committee has been given legal powers and two new regulatory bodies have been created: the Prudential Regulation Authority and the Financial Conduct Authority.

This new regulatory regime is being introduced at a time when the industry is facing calls for a fundamental shift in its culture to prevent the recent high-profile examples of misconduct occurring again, and has the potential to act as a catalyst for wider change. 

How can the new regime bring about change? 

It will require the development of new behaviours at all levels and a shift in what is meant by success – and how it is rewarded. This challenge will require adjustments to leadership style, to capabilities and to values. Where success was previously weighted towards profit or shareholder value, this must now be balanced more equitably with the need to be fair, prudent and customer-oriented. 

Even those members of staff who have historically been considered to be successful might have to change the way they operate. 

Firms will also need to consider the kind of behaviour they need from new recruits, who might differ significantly from those already within the firm, and how they can be integrated and developed. 

The new regulators have talked about increasing the importance of ensuring that those in “significant influence” and control functions are “fit and proper” for the roles. This, however, is only part of the solution.

To achieve a fundamental shift in culture, the industry must ensure that all employees behave as if they were “significant influence” or “control-function holders”. 

This will mean developing approaches to the attraction, development and retention of staff with the skills and personal values who can balance fairness, prudence and customer orientation with risk-taking and achievement of commercial return. 

What tools are needed? 

A key lever for regulated firms to achieve the necessary change in culture and behaviours is through more meaningful and assertive talent management. 

This means understanding which individuals, capabilities and values are critical to achieving an organisation’s objectives and then attracting, managing and retaining those individuals identified as “talent”. It also means having the courage to move out those individuals who fail to meet the standard required – even if they deliver financial results.

What about the roles of regulators and regulated firms? 

The new regulatory regime presents a unique opportunity for regulators and the regulated community to work together (rather than on opposite sides of the desk) to determine how they can secure the right talent within the sector to help shape its future. 

Both new regulators acknowledge that the competence of the senior team is critical to ensuring the firm operates with integrity and remains financially sound and will be assessing this. Equally, organisations already have their own internal views on the capabilities required by senior managers and boards will need to explore how to develop a shared understanding of these skills with their regulators.

What role does succession planning play in cultural change? 

Many organisations already manage the strength of their talent pipeline and succession planning for business critical roles. However, the way in which roles are identified as business critical can be influenced by internal factors that do not always keep pace with the changing external environment. 

Companies need to draw on powerful and successful talent management approaches, such as linking key executives’ performance and rewards to how well they demonstrate the company’s values. This, in turn will contribute to cultural change. 

Lesley Uren is a talent management expert at PA Consulting Group

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