"The objective of the Code is to sustain market confidence and promote financial stability."
STEPHEN BROOKS, EXPERT IN PEOPLE MANAGEMENT, PA CONSULTING GROUPLawyer Monthly16 August 2011
Stephen Brooks, expert in people management at PA Consulting Group, is quoted in Lawyer Monthly in an article dedicated to PA research. Stephen comments on PA and City HR’s survey on attitudes towards the FSA Remuneration Code.
The article reports that the survey “demonstrates that firms are taking the Code seriously and most institutions confirm that they have already implemented changes to comply with the new requirements. While most bankers will see little change in the way they are paid it is clear that the Code is changing the way senior bankers are paid.”
Stephen says: “The objective of the Code is to sustain market confidence and promote financial stability. To be fit for the future and meet the needs of the regulations, banks are changing pay structures for the most senior bankers and many expect to increase base salaries to re-balance the total reward package as a result of bonus deferrals and issuance of stock."
The article goes on to report on the survey’s findings and whether banks expected to make significant changes to performance management processes. Stephen comments: “Most institutions take compliance and risk very seriously and view them as critical ‘gateways’ to performance. Failures or shortcomings in compliance and risk management behaviours will often be dealt with immediately through disciplinary procedures rather than awaiting the formal annual performance review process. The survey supports the belief that firms do not believe that the Code will, in any real sense, impact on attitudes to risk and risk taking in the future.”
The article also looks at the regulatory burden and costs of the new code. You can read the article in full here.