The UK Senior Managers Regime didn’t enter the world in a blaze of glory, with concerns around ‘presumption of responsibility’ driving attention and creating an assumption that the new senior management rules would herald an era of increasingly combative regulation. Since then, while the ‘guilty until proven innocent’ elements have been withdrawn, the majority mindset is still fearful and uncertain.
However, the Senior Manager’s Regime and the parallel Certification Regime are in fact great opportunities to improve businesses, organise ourselves better and ultimately create better conditions for success.
The new responsibilities are in fact some of the oldest leadership and management skills – those that make better businesses. They will expose those who have fled from leadership responsibility but still reaped its rewards; those of us who are committed to building the best organisations we can should welcome the opportunity to build positive change.
Here are just four ways we can use the regulatory environment to make our organisations better:
1. We can clear up our management structure
Very few organisations have a fully designed management and leadership structure. The reality is that most firms have organic structures which have evolved, flexed and shifted over time – the more complex the business, the truer this is. With the imperative for accountability mapping under the SMR there is the opportunity and the necessity to truly define who is responsible and who is in charge of what – clarity over role is one of the clearest drivers of leadership and organisation success.
2. We can choose to make better decisions
If we know who is responsible, we also know who we can look to in order to make definitive decisions. Complex structures and lack of accountability create the conditions for poor decisions to be made, with often the least worst option being taken because of a tendency to lean towards committee-led choices. Beyond recognition of accountability, the underlying thread of the SMR is the drive towards making better judgements – this is the expectation that we develop our capacity for critical thinking and analysis of options. The skill to make good decisions is now an integral part of leadership roles in finance.
3. We can make those around us more certain of their roles
With a strong focus on appropriate and managed delegation we know that our teams can now be more secure in our expectations of them. Delegation is a skill not an abrogation of responsibility – and now if we as individuals are accountable for the tasks we pass on to others, we will concentrate more on making certain that our teams are able to deliver what we ask of them. This ability depends on technical skill and clarity of task – something that most teams cry out for. No longer will our colleagues have to second guess our intent and needs – we will have told them because it is our responsibility to do so.
4. We can be sure of the skills of others
As the Certification aspects take hold we will be in a position to look at others and know what they are capable of. There will develop standards and recognised levels of competency as the certification regime matures, and within that we will know the core skills of others as they move around the industry, creating a higher level of trust on which we can build. And for us as individuals, as we build portfolios of recognised and measured skills our own value and transferability will increase, creating personal as well as institutional opportunity.
The accountability approach to regulation is something that we must respond to, but it is something that we should recognise can also capture our ambitions and desires to make the best businesses we can.