For­mer staff have com­plained about their treat­ment at Cana­dian bank’s Lon­don arm

Business Day (Nigeria) - - FINANCIAL TIMES - KATIE MARTIN, CARO­LINE BINHAM AND PHILIP STAFFORD

The UK’S City watch­dog has be­gun a full-blown in­ves­ti­ga­tion into the work­ing cul­ture at Royal Bank of Canada in Lon­don af­ter dozens of for­mer em­ploy­ees com­plained over their treat­ment, sev­eral peo­ple fa­mil­iar with the mat­ter told the Fi­nan­cial Times.

In­quiries started as a less for­mal fact-find­ing ex­er­cise last sum­mer when a hand­ful of for­mer staff claimed to have been dis­missed af­ter high­light­ing le­gal and com­pli­ance is­sues over sev­eral years.

They stepped for­ward af­ter one for­mer em­ployee, a cur­ren­cies trader, won a case for un­fair dis­missal, in which he claimed to have been treated poorly af­ter rais­ing con­cerns over what he saw as a “box-tick­ing” com­pli­ance cul­ture. An ap­peal on that case is still pend­ing. Since then, the group has grown rapidly.

The step-up by the Fi­nan­cial Con­duct Au­thor­ity comes as the watch­dog takes a tougher stance on bank­ing cul­ture and the treat­ment of whistle­blow­ers. The launch of an of­fi­cial in­ves­ti­ga­tion means that if the watch­dog finds wrong­do­ing, the bank faces a sub­stan­tial fine and the pos­si­bil­ity of sanc­tions for se­nior man­agers.

Some of the for­mer staff have ap­proached the FCA di­rectly, while some have been con­tacted by the reg­u­la­tor, peo­ple fa­mil­iar with the mat­ter said, il­lus­trat­ing the watch­dog’s proac­tive stance. The FCA has held ex­ten­sive in­ter­views with many of these in­di­vid­u­als, seek­ing to de­ter­mine whether there is a pat­tern of poor treat­ment of staff by the Cana­dian bank, and how it han­dles in­ter­nal com­plaints about em­ployee be­hav­iour.

One for­mer em­ployee who met the FCA said it was clear the reg­u­la­tor was se­ri­ously scru­ti­n­is­ing the bank. “There was no way this was just a lit­tle ex­ploratory chat,” the per­son said. “Ev­ery ques­tion was cul­ture, cul­ture, cul­ture.”

The FCA de­clined to com­ment on the live in­ves­ti­ga­tion. The bank de­clined to com­ment on the in­ves­ti­ga­tion or to say whether any staff had been sus­pended while the in­quiry was un­der way.

“We take our du­ties as an em­ployer very se­ri­ously and pro­mote the free­dom for em­ploy­ees to speak up and raise con­cerns with­out fear of re­tal­i­a­tion,” it said. “We en­cour­age a ro­bust com­pli­ance cul­ture and have con­trols in place to up­hold our prin­ci­ples, poli­cies and pro­ce­dures.”

The treat­ment of whistle­blow­ers is not the only fo­cus of the reg­u­la­tor’s probe; other is­sues in­clude the broader han­dling of com­plaints and the pro­cesses used to dis­miss staff. But the FCA is es­pe­cially keen to foster a safe and open en­vi­ron­ment for peo­ple work­ing in the fi­nan­cial ser­vices in­dus­try to sound the alarm on any area of poor prac­tice.

The reg­u­la­tor has re­cently pledged to over­haul its own way of treat­ing whistle­blow­ers af­ter be­ing crit­i­cised for not prop­erly pro­tect­ing in­di­vid­u­als’ iden­ti­ties and be­ing lax about act­ing on their in­for­ma­tion.

The FCA also came un­der fire last May for a soft ap­proach to Jes Sta­ley, the chief ex­ec­u­tive of Bar­clays, fol­low­ing the watch­dog’s in­ves­ti­ga­tion into how he twice tried to un­veil the iden­tity of an anony­mous whistle­blower.

Mr Sta­ley be­came the first per­son to be pe­nalised un­der the FCA’S se­nior man­agers regime, which aims to hold top man­agers re­spon­si­ble for fail­ings on their watch, re­ceiv­ing a £642,000 fine. He held on to his job, how­ever, even though the regime gives the power for the FCA to ban top brass. The bank it­self es­caped any ac­tion from UK reg­u­la­tors but re­ceived a $15m fine last month from New York watch­dogs.

The FCA has pledged to take a tougher ap­proach to cul­ture, and has been del­uged by a tide of whistleblowing com­plaints, with a 220 per cent rise in 2018 in com­plaints to the reg­u­la­tor about “non-fi­nan­cial” be­hav­iour, such as bul­ly­ing, ho­mo­pho­bia and sex­ual ha­rass­ment.

The FCA al­ready has live in­ves­ti­ga­tions into com­pa­nies it sus­pects of not tak­ing such al­le­ga­tions se­ri­ously enough, and put the City on no­tice in De­cem­ber that firms faced fines and top brass risked their jobs if they did not treat whistle­blow­ers ap­pro­pri­ately.

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