• Tim Payne, Author |
3 min read

Just as we have revolutionised our working patterns in the past 12 months, so too will the introduction of UK SOx. Bringing increased focus from regulators on controls requires a further serious shift in culture if it’s going to take hold and last. And as every good revolutionary knows, you have to convince the masses of your doctrine.

December 2023 is likely to be the earliest date where leaders will have to hold the little red book and attest. Which gives you about 18-24 months to cast off the shackles of history and build the controlled environment for a successful future.

What kind of culture would be needed to support UK SOx and how would you know if you have one?

In our view, you will know it when leadership, control owners, process owners, and other key stakeholders:

  • Believe in the importance of controls
  • Think about the consequences of business planning on controls
  • Assume that part of their role and responsibility going forward is to make sure these controls are effective
  • Behave in a way that actually prioritises the governance over these controls and the successful operating of the controls.  

Prioritising here is important – it means people need to put controls first, above the urgent but less important.

What should those charged with driving culture change and embedding of UK SOx do?

Is there a manifesto to guide their revolutionary zeal? Our KPMG behavioural scientists would highlight the following:

1. Get on the campaign trail.   

Board, Executive Committee and other Divisional and Functional leaders need to be aligned on this, and they need to set the tone through words, and actions (including resource allocation and giving UK SOx attention).  

They need to prepare to actively engage colleagues in the SOx journey - and this is where a dictatorship really won’t work - a culture campaign is akin to an election campaign. Ultimately, you want people to vote for you, and vote for SOx. That means as a Leader, you will have to be on the campaign trail from now until go-live.  You will need to use your platform to set out your position, you will need to analyse your voters and understand the quickest ways to their hearts, and you will need to shake a lot of hands and kiss a lot of babies (well, maybe not in the post COVID-19 world).

2. Help owners define their roles.    

Individual Accountability is the end goal here. In addition to the points above, this means defining those accountabilities really clearly; involving the control owners and process owners in doing this (no-one likes having their job defined for them, really – ask any behavioural scientist), and ultimately aligning personal objectives and reward to UK SOx actions and outcomes. It’s also important that control and process owners have the skills, understanding and capability to do their new job – so being really clear on any skill gap, and spending some money on bridging it - is part of the art of driving accountability.

3. Don’t lurk in the silos.

Effective governance and controls in complex Banks will require cooperation and collaboration across functional and divisional boundaries. This is never easy at the best of times, and those with a US listing will know already that SOx makes this harder still.  We are tribal, and tend to identify with our own team, not the overall league.  Designing this ‘into’ your SOx (or frankly any controls) programme will help and spending the time up front to build a cross-functional programme team with a shared understanding and shared objectives will help.  

4. Make it easy to govern.  

One of the most obvious but incredibly practical insights to come out of the behavioural science movement is, if you want someone to do something, make it really easy to do.  Any tiny bit of grit in the system and people won’t bother. You won’t get an oyster; you’ll just get what you already have. Think of this when you design your governance framework to oversee controls.  Are you keeping things simple, or are you putting unnecessary friction into the system?

So, creating a culture that underpins UK SOx is fundamental, but that’s the easy part of the sentence to write.  How you do that is more challenging.  We hope some of the ideas above suggest some good places to start and look forward to joining you on the campaign trail!

Please reach out to Tim Payne for culture-related topics and questions and contact Sarah Ward for all  SOx related queries.