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How to lead successfully in a regulated world

Scheme helps executives attain skills required within complex financial services industry

Photograph: Getty Images

Photograph: Getty Images


The funds industry and the financial services sector in general have become so tightly regulated that the rules don’t just apply to the companies involved, but the decision-makers within them as well.

These people carry out what are known as pre-approved control functions (PCFs) and they must be able to demonstrate the very highest standards of probity, competence and qualifications. And the new Individual Accountability Framework and the Senior Executive Accountability Regime (SEAR) will present several additional challenges for these senior executives.

Unsurprisingly, many organisations have reported difficulties in attracting people to apply for PCF roles due to the increased weight of regulation. A new IMI Leading in a Regulated World programme is aimed at helping them overcome these challenges by developing the leadership capabilities required by PCF role holders, both at personal and team level.

Crisis simulations

The programme will be delivered in four two-day sessions between May and October covering the themes of owning your leadership role, collaborative leadership, stakeholder engagement and navigating regulatory complexity.

A key feature of the programme will be leadership in crisis simulations which challenge participants to make personal and team decisions, to communicate those decisions and to interact with relevant stakeholders, in the context of a given crisis scenario. The programme will also feature a series of expert guest speaker sessions, addressing key challenges impacting leadership teams and exploring contemporary leadership topics and concepts.

The emphasis is very much on capability building rather than on compliance. “I’m not a regulatory expert,” says programme director Danica Murphy. “I am a people expert and I specialise in high-performing teams. Navigating complexity is nothing new, everyone can read a map. But it takes courage to go out and explore and chart the map. That can be scary.”

Apart from frameworks and rules to guide people, it also requires the right culture, she points out. “If you have a culture of doing well by your customers then you’ll do all right. Culture is something we can shape and form in organisations. If an organisation has the right culture and rewards and trains and fosters the right behaviours, it is going to succeed. But it’s not the regulator’s job to build culture, it’s the leaders’ job.”


Resilience is another key area of focus. “If don’t put fuel in your car you can’t expect it to perform well. Resilience is like having the right fuel in your high-performing team. Forbes did a study which showed leaders are processing 80 times the amount of data now every day as they were eight years ago. How many times do we upgrade our laptop? Probably every year or it will slow down to a stop. But we can’t take out our brain and update it. We’ve got to work with what we’ve got. Exhausted leaders make poor decisions. By helping managers build their resilience we can help them make better decisions.”

The collaborative leadership piece is also critically important. This element of the programme will help leaders build the psychological safety required in an organisation for people to call out poor behaviours. “The 2016 Wells Fargo banking scandal came about because of a blame and fear culture,” says Murphy. “Managers’ bonuses were based on new account openings and fear of disappointing leaders led to the creation of fake accounts. Without psychological safety, no one can be the whistleblower in those situations.”

Trust is among the key benefits of the programme for organisations, Murphy concludes. “By building the foundations of a strong and robust accountability culture, the programme will help organisations to gain the trust of consumers, investors, employees and other stakeholders. The regulator is trying to build trust as well and we can work together to reach this common goal. Organisations will also benefit from being able to identify and retain the PCF talent needed to implement the reform and change required by regulators.”