Some of the most senior officers in the UK's top financial institutions do not agree on how to handle a regulatory crisis in their companies - and this lack of continuity could prove fatal for their businesses.
That's the finding of the latest in-depth survey by Complinet which provides compliance information to many of the world's largest financial institutions.
Complinet invited 184 leading compliance, legal and accounting experts to take part in a 'role playing' exercise, where a serious crisis within an imaginary bank was simulated over five working days.
Each day the experts were monitored on how they would react to the unfolding crisis, with widely differing results.
"The survey highlights some real concerns and a clear lack of continuity over the best way to deal with a crisis in many companies," says Chris Pilling, CEO of Complinet.
"There was also a wide discrepancy in opinion on how any information about a crisis should be passed up the chain of command.
"This shows that compliance officers need to have full access and involvement with senior management at board level, so knowledge and information are accessible and proper procedures put in place.
"Risk in the boardroom can be reduced and even avoided by having the compliance officer involved at board level."
Almost half of those surveyed (43%) wanted the internal watchdog of a financial institution - the compliance team - to be excluded from leading any investigation once the crisis was detected.
"Without changes in the behaviour of a firm, where a compliance culture is allowed to grow, take shape and take root to ensure ethical behaviour, the current crisis is destined to repeat itself," says Pilling.
"There is clearly a need for investment in more training and resources for compliance teams across sectors."
The Regulatory Storm survey, conducted by Complinet and commercial law firm Nabarro, also found a third of the participants would have called in the Financial Services Authority at the end of the first day.
The results of the exercise prompted calls from Complinet for the introduction of certificate of standards within the financial services industry.
This call is now a reality as the BSI organisation - working closely with Complinet - has launched plans to introduce a series of voluntary initiatives to encourage best practice in the industry.
