It is hard to achieve the 'right' culture and virtually impossible to quantify 'good culture' in the precise, technical terms that people who work in financial services love. Many executives struggle with the notion of culture because it is far less tangible than hard sales figures and profit margins, but struggle they must.

Central to a positive working culture is the ability of staff to be able to communicate with senior managers or board members on any issue they feel is important. Too many companies only want to embrace the good news and stifle or even prevent discussion about things that are going wrong. Such an approach, which tends to be coupled with a culture of fear in which employees are afraid to raise problems, can only end up being detrimental to a firm. There are countless examples of this.

Organisations in which there is no accountability are likely to allow non-financial misconduct issues, such as bullying and harassment, to prevail. This is no longer solely an operational risk but a regulatory one too, with the FCA and the Prudential Regulation Authority (PRA) asking firms to provide evidence that they are monitoring their cultures. By being open, putting words into action and including people in discussions, firms can develop cultures that are right for all interested parties and that satisfy the regulators. Each one, however, has to find its own way because there is — quite rightly — no overly prescriptive method to follow. If a regulator were to define a good working culture strictly, this would only turn the process of compliance into a tick-box bureaucratic exercise rather than a process with a genuine purpose.

It is quite understandable, for example, that a retail bank’s culture might be very different from that of a wholesale broker. This does not mean that one is better than the other; they can both be different while offering something positive to all concerned.

Culture can — and arguably should — differ between firms; regulators are not trying to create a one-size-fits-all regime for it. However, it is increasingly clear that they expect executives to be able to describe their firms' cultures and the actions that they are taking to improve them.

The one thing that does apply to all firms is that it is no longer an option to do nothing.

* Mark Turner can be reached on +44 (0)20 7089 0834 or at mark.turner@duffandphelps.com