Talented young professionals in financial services may be deterred from taking top leadership roles in the sector if stringent rules on senior management responsibilities are not addressed, according to new research by regulatory consultant Bovill.
Some 44% of senior managers across the UK, US, Hong Kong, and Singapore believe it will be difficult to attract quality candidates to leadership positions in regimes with high levels of personal liability.
Bovill said the UK has among the highest levels of scrutiny and personal liability. Senior managers are directly accountable for their firms’ regulatory breaches, and rules ensure those with bad records cannot continue to work in the industry.
If the stringent rules are not addressed, the consultancy warned that this could stifle competitiveness and lead to a brain drain in regions where levels of personal accountability are higher.
However, figures also revealed that half of senior managers believe the level of regulatory scrutiny on them is appropriate, with a further 10% feeling it is actually too low. The report called on regulators to be proportionate in enforcing their rules.
“There are clear concerns about the personal risk associated with these roles. For the sector to thrive we need to make sure financial services continue to attract the bright and the ambitious. If unaddressed, in regions with higher levels of individual responsibility this could impede growth and innovation and stymie industry diversity,” said Bovill chief executive Ben Blackett-Ord.
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