Lloyd’s of London has launched a consultation to revise its internal rules, aiming to address both financial and non-financial misconduct as it seeks to improve its internal culture.
The insurance exchange, which has faced criticism for issues related to heavy drinking and sexual harassment, is working to clarify its processes to deal with inappropriate behaviour.
Previous survey insights from 2019 revealed that a significant 8% admitted to having witnessed sexual harassment over the previous 12 months.
A list of misconduct includes harassment, bullying, and “conducting Lloyd’s business when under the influence of alcohol where it leads to unprofessional behaviour,” a report from Bloomberg said.
The proposed changes include updates to Lloyd’s bylaws and aligning its policies more closely with those of the Financial Conduct Authority (FCA). Additionally, the proposals make clear that it is not necessary for Lloyd’s to demonstrate harm at an institutional level for misconduct to be considered actionable.
Earlier this year, the FCA launched efforts to assess how companies are handling non-financial misconduct. According to Sarah Pritchard, FCA executive director, the regulator has commenced supervisory work to examine how firms are detecting and resolving such cases.
“In the supervisory work that we have just commenced, we are looking to firms to explain numbers of non-financial misconduct cases, methods of detection, and methods of resolution,” Pritchard said.
Lloyd’s actions come amid concerns that non-financial misconduct cases - covering actions such as bullying, discrimination, and harassment - are frequently resolved through non-disclosure agreements (NDAs). The FCA’s probe is expected to reveal whether NDAs are indeed a common tool used by firms to settle these cases.
These measures follow Lloyd’s ongoing efforts to reform its culture, particularly after a 2019 article highlighted widespread issues of sexual misconduct at the exchange. The article detailed incidents of inappropriate comments, unwanted physical contact, and sexual assault within the market.
Lloyd’s explained that it has been taking steps to address these concerns and improve its reputation in the years since.
The exchange also introduced a new category of misconduct aimed at preventing the mistreatment of witnesses and whistleblowers. In 2022, it issued its first penalty for non-financial misconduct, finding that Atrium Underwriters failed to address complaints of harassment and bullying.
According to a Lloyd’s statement, Atrium staff, including senior managers, were involved in annual events featuring heavy drinking and initiation games, during which inappropriate and sexualised remarks were made about female employees.
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