Senior Managers & Certification Regime
From Threat to Opportunity
A radical change is coming to financial services. The UK’s Senior Managers and Certification Regime (SMCR) is one of the strictest personal accountability frameworks in regulated financial services sectors around the world and will upend the way senior management operates. Whilst the new Regime brings about significant change, many of its principles are common sense approaches to running a well-controlled business.
The new Regime aims to create greater clarity on the division of roles and responsibilities, and to promote accountability among senior management within financial services firms. It also seeks to ensure that decision makers easily have available all the information needed to understand the risks pertinent to their roles, and how to manage and mitigate those risks appropriately.
Collective and individual responsibility – not contradictory
Whilst seemingly opposing ideas, these two principles should co-exist and should be properly balanced. Senior managers will be required to look in more detail at how key decisions are made and their potential consequences, both within their own area and across the wider business. The SMCR’s intent of strengthening individual accountability without compromising collective responsibility is key, although the reality may be hard to achieve.