If a serious NFM issue arose tomorrow, would the Board be prepared to examine its own decisions?

If a serious NFM issue arose tomorrow, would the Board be prepared to examine its own decisions?

The FCA’s new rules and guidance on non-financial misconduct came into force on 1 September 2026. The changes extend Conduct Rules coverage in non-banking firms and provide guidance on applying COCON and assessing fitness and propriety. FCA

There is rightly a focus on implementation: policies, assessments, regulatory references, training and escalation.

But I find myself thinking something I also thought when Consumer Duty was introduced:

How much of the underlying expectation should actually feel new?

Consumer Duty explicitly connects customer outcomes with strategy, governance, leadership and people policies, including incentives. It did not make culture relevant for the first time. FCA Handbook

I have used, and evolved, Deloitte’s Risk Culture Framework for years, first in conduct risk frameworks and then in Consumer Duty frameworks. Its four areas, organisation, risk competence, motivation and relationships, help make culture tangible. They connect it to things Boards and Executives influence through their decisions. Deloitte

Commercial ambition often means asking more of people. Stretching objectives and pressure can bring focus, encourage improvement and help teams achieve more than they thought possible.

The judgement lies in balancing those demands: getting the best out of our teams while preventing sustained pressure from becoming damaging stress or burnout, with consequences for people, performance and behaviour.

The culture wheel helps us explore that balance.

• Organisation: Are our priorities clear? Have we matched expectations with resources, workable processes and clear accountability? If we add a new priority, what can stop?

• Motivation: Do our targets and incentives encourage the performance and behaviour we want? What happens when someone delivers results at an unacceptable cost to others?

• Risk competence: Do people have the knowledge, skills and support to meet the challenge? Have we equipped managers to recognise when pressure is becoming counterproductive?

• Relationships: Can people question a deadline, ask for help or challenge behaviour without being labelled uncommitted? How do leaders respond when the answer is uncomfortable?

A demanding target will feel very different in a well-supported team with clear priorities than in one facing vacancies, competing deadlines and little confidence in speaking up.

I’ve seen Boards with apparently healthy cultures make legitimate commercial decisions that create very different conditions further down an organisation.

Those decisions cascade.

A strategic objective becomes a target. The target becomes a deadline. That deadline reaches a manager without enough resource to deliver it. Challenge becomes harder, and poor behaviour can become rationalised because “we just need to get this done”.

Pressure does not excuse misconduct, and poor behaviour is not an inevitable consequence of demanding work. But Boards and Executives should understand how their decisions interact with the conditions people are working in.

And pressure is only one part of the picture.

What happens when a high performer’s behaviour is tolerated because of the revenue they generate? When an influential leader escapes challenge? When repeated concerns are treated as isolated disagreements?

People learn from what the organisation tolerates as well as what it says.

This is where Chief Compliance Officers, Compliance Directors and Heads of Compliance can make an important contribution.

For me, Compliance should be a cheerleader for the business’s sustainable success. That means understanding its ambitions and helping guide how it achieves them, with the independence to challenge decisions that could undermine those ambitions, including regulatory failures and poor customer outcomes.

For a growth plan, it might mean challenging whether recruitment and training can keep pace. For a new incentive scheme, it might mean testing which behaviours it could reward. For a transformation programme, it might mean identifying where competing demands could put customer outcomes or effective controls under strain.

The contribution is practical: help the business find a route that works, explain the trade-offs and challenge assumptions that could jeopardise success.

That takes commercial understanding as well as regulatory expertise. It also takes a willingness from the Board and Executive to act on the challenge.

Preventing poor outcomes can help protect customer relationships, retain good people and avoid disruption and the cost of putting things right. Fair treatment also matters in its own right.

A seat at the table is only the starting point. Compliance leaders’ judgement needs to help shape decisions while there is still time to influence them.

That strengthens management and Board accountability. It does not transfer ownership of culture to Compliance.

If a serious case arises, the immediate response matters. People affected need support and protection from retaliation. Allegations need fair investigation, with clear responsibility for decisions and escalation.

The Board should seek assurance that the firm has considered the relevant Conduct Rules, fitness and propriety, and reporting requirements.

But I would also want it to ask what happened before the case arose.

Were concerns raised previously? Could people challenge the individual involved? What behaviours were rewarded? Did information held in different parts of the organisation reveal a pattern that nobody had brought together?

Then comes the harder question:

Did anything we decided, accepted or failed to challenge at Board or Executive level contribute to those conditions?

That does not mean every incident demonstrates a Board failure. Nor does it make collective Board oversight, executive responsibility and individual regulatory accountability interchangeable.

It means examining each honestly. What was reasonably foreseeable? What information reached the Board? What happened in response?

Where Board members or senior leaders are implicated, that examination needs sufficiently independent challenge.

A quarterly case count cannot answer these questions.

The FCA has cautioned that higher reporting may reflect a healthy speak-up culture, while few or no reported incidents do not necessarily indicate a positive environment. FCA survey findings

I would want to consider case information alongside employee feedback, grievances, turnover and exit themes, with an understanding of resourcing and delivery pressures.

Working with the business, HR and Risk, compliance leaders can help the Board interpret those signals, test possible explanations and identify where action is needed.

Perhaps the challenge for Boards is therefore broader than asking what needs to change because of the new rules.

What should we already have understood about our culture? Are we making full use of our compliance leaders’ insight to support commercial success? And are we prepared to act when that insight challenges our own assumptions?

Reflection needs to lead to action, with clear ownership and evidence that changes are making a difference.

If a serious NFM case landed tomorrow, I would want the Board to know who was accountable for the response.

I would also want it to be prepared to examine its own role, and to act on what it found.