Conduct Costs Project Launch Event

On 10 December 2013, the Conduct Costs Project publicly launched the project’s results at an open event at the London School of Economics. This was an opportunity for stakeholders from various backgrounds to hear the results from the project team face to face, following the publication of the project’s results on the project blog on 28 November 2013.

The presentations were chaired by the project’s director, Roger McCormick who introduced the audience to the members of the project team and the project’s context, history and scope. Roger highlighted the importance of accessible, consumer – friendly information, and the relevance of “restoring trust” in financial institutions.

It was vital, he stressed, that data was presented in a way that enabled the public to compare one bank with another, the media’s role in generating public awareness and debate being of crucial importance. He also encouraged banks and regulators to be more forthcoming with the public about why heavy conduct costs were still being incurred and what was being done to ensure that they start to go down.

Etienne Piciocchi provided an overview of the project’s results by bank, by type of conduct cost and the trend of the last 5 years (2008-2012). He also went through the major impacts of the conduct costs on net income and share price and the alignment between the interests of shareholders / stakeholders and the need for integrating a compliance perspective in the risk management processes of financial institutions.

Christopher Stears described the project’s experience in terms of disclosure inadequacies and conflicts of interest. He also addressed the research phase and disclosure practices with some notes about the transparency problems, materiality issues and conduct reporting.

Milan Boran went through the analysis of the project’s results, providing different perspectives on the project’s results, which supported the idea of self-respecting behaviour change for a better risk management performance.

The Conduct Costs Project results should provoke, and have provoked discussion on important issues including ethical performance (and how it can be tested), consensus on best practice and the effectiveness of risk management in financial institutions. Members of the research team continue to receive requests for interviews and information from the media in the UK and internationally and, since the launch event, the research department of one of the banks covered has asked us for permission to use the project’s findings in a client circular. (This was granted!)

If you want to keep up with developments in the project, please register to receive updates and also think about joining the related LinkedIn group, where more informal postings will appear more regularly…and you are, of course, encouraged to contribute on both!