Posted by: Dominique Seal

Posted on: .

What impact will the Senior Managers & Certification Regime have on HR?

As those of you who work in Financial & Professional Services firms may be aware, the Government has announced that the responsibility and broader impact of the Senior Managers Certification Regime (SMCR) has been passed from the regulator to financial firms and individuals. The decision to extend the scope of SMCR to all authorised firms in 2018 will have a huge impact on the industry.

A key focus for Oakleaf Partnership is to partner with our clients and to facilitate and deliver thought leadership seminars focusing on key trends and new initiatives across the industry. This week Oakleaf Partnership & Lloyds Banking Group hosted our first Senior Managers Certification Regime round table seminar.

Andrew Pullman from People Risk Solutions led the discussion and took us through the implementation of the Regime and the impact that it will have not only on HR, but across the Financial Services industry as a whole. We welcomed representatives from a broad range of Financial Services clients, who were actively involved in the discussion.

The overall consensus of SMCR is that conduct rules and core values essentially over-lap, and that all firms should be viewing this as a commitment “to do business better” with an opportunity to get HR at the top table.

Andrew’s top 10 tips at the event were:

  1. Start the SMCR process NOW if you haven't already started. The work involved will take longer than you think!
  2. Dedicate as much resource as you are able - consider external (interim) HR resource also
  3. Plan and work in partnership with Compliance and other support functions - it is a joint challenge with a common goal and you must work as a team.
  4. Think NOW about access to, and storage of, long-term data (you may need it for up to 10 years after an employee's exit). Who owns and manages this data? Who has access to it? Data requests from the regulators will inevitably require a very rapid turnaround and accuracy
  5. Consider a HR MI system that can accommodate the info requirements of SMCR that are relevant to your firm
  6. You should go through your own HR policies to ensure they both reference, and are relevant to, SMCR.
  7. Think about your approach to employee references upon exit (vis a vis any potential settlement agreements). Any formal disciplinaries will go on the leavers reference going forward. Consider creating an "Exit Decision Tree" in line with your exit policies, and don't jump to conclusions about suspected breaches: investigate thoroughly, document it, then decide
  8. THINK: Your primary role is to protect your organisation (bear this in mind the whole time), but be pragmatic and sense check what you already do. An early dialogue with the regulators is essential
  9. DO NOT view SMCR as something that encourages a "blame culture" - work with the firm's senior management team to ensure everyone understands that culture change is key and behavioural expectations are clearly and unambiguously communicated. You will also need a proper (evidence based) process to ensure that the individuals your firm will be certifying are "fit, proper and competent"
  10. Finally remember that this is a first-rate opportunity to both "raise the HR bar" and “profile of your function", aligning culture and conduct to your firm's values. It's all about doing business better.

SMCR is certainly not a "nice to have" but it is a fantastic opportunity for HR to do what HR should be doing!

Please contact to find out more about future Financial & Professional Services networking events.


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