Get in touch with us today!
If you have any questions, enquiries or just want to say how much you like us (or what we can do better), please drop us a line.
In many regulated firms, Compliance and HR operate in parallel but disconnected streams. Compliance focuses on controls, clear policies, rules, and audit trails. HR is seen to handle engagement, retaining talent, and development. But in truth, these two worlds overlap when it comes to culture and process and they should both be fully aligned when it comes to achieving business outcomes.
Harmonising this relationship is key to either side being truly effective. We cannot deliver meaningful compliance without a healthy leadership culture with engaged employees buying into the need for compliance. Equally, we cannot drive cultural compliance through HR processes without embedding responsibility, accountability and performance management into the rhythm of everyday operations.
This blog explores the importance of integrating compliance into people practices and procedures to identify areas of risk and non compliance promptly. By increasing the visibility and ownership throughout the organisation we go beyond meeting basic regulatory or legal standards and start to align the organisations’s values with the requirements of legislation. It’s about creating a compliance culture that employees feel part of.
The FCA and other regulators have long urged firms to move away from a tick-box approach to compliance. Despite this, the tick-box mindset still persists. The CIPD is the UK professional body for Human Resources. Its members help ensure legal obligations are met in employment law and workplace safety. However, focusing only on HR compliance is a reductionist view of their role. HR also plays a vital part in shaping organisational culture.
Company culture influences everything from customer care to employee wellbeing to psychological safety and ethical conduct. Regulatory or legal compliance provides the impetus for many businesses to comply due to fear of damage to the company’s reputation or legal risks in the case of non compliance. But fear based compliance is not cultural where employees feel a sense of ownership for the regulations and if you take away that fear or ‘stick’ workplace behaviours will revert back to what they were previously.
A positive workplace culture means that meeting compliance regulations is business as usual, it is cultural as in ‘What we do around here’. In the same way that performance review processes should be authentic and ongoing — not simply an annual formality, compliance activities should involve regular review to ensure that employees understand the expectations.
The Consumer Duty requires firms to evidence good consumer outcomes through lived behaviour, not just documented processes to ensure compliance. Leaders must take proactive steps to develop and measure culture through day-to-day operations, starting with their teams. SMCR and other frameworks demonstrate that legislation is no longer content with high-level assurances — it seeks verifiable cultural action.
Compliance culture lives in leadership decisions, daily behaviours, and consistent expectations. HR processes such as appraisal, one-to-ones, performance reviews, and talent planning are uniquely positioned to embed these principles. Compliance driven processes like Fit and Proper Conduct reviews and annual training or certification should be positioned here two. These touchpoints are where accountability is reinforced and where warning signs can first appear for employees — such as poor feedback records, coaching gaps, or talent progressing despite red flags about potential breaches or poor behaviours.
Systems and processes are key
HR and Compliance must have the systems, skills, and practices to address issues consistently and objectively. They also need to work in a joined-up and coordinated way. With the right digital platforms and procedures, these teams can anticipate and manage potential compliance issues. They can also reduce bias and ensure all staff are treated fairly and supported appropriately.
HR and Compliance must have systems, skills, and practices to address issues consistently and objectively. They also need to work in a joined-up way. With the right digital platforms and procedures, they can stay ahead of potential compliance issues. This helps reduce bias and ensures fair, appropriate support for all staff.
While many firms list their values on office walls or websites, few truly define what those values look like in action. Regulators increasingly expect firms to provide clear evidence that values like integrity, fairness, and transparency are tied to observable behaviours.
This is where Human Resources and Compliance could co-create behavioural frameworks or competencies. These frameworks should translate organisational values into day-to-day expectations — such as what ‘customer focus’ means during complaint handling, or how ‘ownership’ should appear in decision-making.
To gain employee buy-in, the behavioural framework should be aligned with existing people processes. That includes integrating key risk management behaviours into recruitment assessments, performance reviews, and promotion criteria. If you have an existing competency or values framework, consider how you can align the two so they are synergistic rather than contradictory.
With Actus Perform, businesses can ensure these frameworks are not only embedded, but visible in every employee’s objective setting and feedback loops. Involving other stakeholders like Operations and Sales ensures the framework isn’t built in a vacuum, but reflects real contexts that can translate into business outcomes. This shared ownership helps reinforce the behavioural expectations, regulations and employee rights consistently — from senior managers to frontline staff.
The principle of individual accountability is central to both SMCR and the Consumer Duty. But firms often struggle to translate regulatory responsibility into meaningful personal objectives. Without alignment between individual goals and compliance outcomes, and understanding of legal obligations cultural drift can occur and employees feel detached. They may focus on commercial goals at the expense of customer outcomes or risk awareness.
This is where digital performance management tools like Actus Perform make a difference, particularly when combined with Actus Comply. Line managers can assign objectives related to regulatory outcomes — such as reducing customer complaints or demonstrating Conduct Rule behaviours — alongside traditional business goals and regularly review them. Additionally, Actus Oversight provides senior leaders with a birds-eye view of how responsibilities are cascaded and tracked across the business. This transparency reduces ambiguity, promotes fairness, and supports compliance ownership at all levels.
One of the most common questions regulators now ask is: ‘How do you know your culture is healthy?’. This can be a difficult question to answer without reliable data. Measuring an absence of legal disputes or costly lawsuits isn’t a proactive way of improving internal or external customer outcomes. And it is this kind of improvement that the FCA is looking for.
Again, this is where compliance culture starts with HR, it is well evidenced that businesses with highly engaged employees deliver better customer service and have fewer health and safety incidents. This shows how a positive workplace culture can be directly linked to business performance and increased revenue.
In these environments the company culture clearly sees compliance as more than just a legal obligation. How do we get there? Well Employee Surveys on engagement or well being or Customer Net Promoter scores can provide us with data about how we are doing.
However it is the routine people management processes that really drive that sense of ownership and belonging. Well managed HR and compliance processes create a stable environment that foster trust helps employees to thrive. The leaders and managers that do more than going through the motions, helping their employees understand and truly buy into the principles behind regulatory or legal requirements are the ones to drive a positive workplace culture. They focus on nurturing their people, rather than just minimising legal risks. This approach is likely to improve employee wellbeing and engagement. In turn, that boosts customer experience, business outcomes, and revenue, and becomes a positive self fulfilling policy.
Actus provides visibility to HR teams who can see whether check-ins are taking place regularly, if coaching feedback includes behavioural observations, and whether objectives are likely to align with compliance issues or requirements. Patterns of inconsistency can signal where managers may need support or where subcultures are forming. This insight is essential not just for compliance reporting, but for making targeted interventions that support performance and protect against conduct risk.
Data is only valuable when it’s actionable. One of the most powerful ways to demonstrate compliance culture is through integrated dashboards that track real-time cultural metrics. Actus Oversight allows compliance and HR teams to collate data across T&C records, performance reviews, consumer feedback, and audit logs. Rather than relying on fragmented spreadsheets or anecdotal evidence, firms can monitor trends that indicate cultural health or risk.
For example, if one department consistently lags on customer outcome objectives or coaching feedback, it may require closer leadership support. Oversight also helps firms evidence alignment between strategic goals and frontline activity. These dashboards can be tailored to highlight non-financial misconduct trends, escalation activity, or underperformance related to SMCR duties. With this level of visibility, leaders can take proactive steps to prevent regulatory breaches and course-correct before culture deteriorates.
When compliance is owned only by the Compliance function, and culture is left to Human Resources, the organisation risks missing key signals or warning signs. Everyone is left to go through the motions and the risk is being exposed to group think. Look at the recent example of a Human Resources Advisory business recently found guilty of contravening UK employment laws at a tribunal. They were found guilty of unlawful maternity discrimination towards an employee. This is such a blatant disconnect for a firm that provides HR Software and Compliance to get into such a position around employment laws in the first place.
It is less about the legal penalties and more about the Company’s reputation and brand impact. HR operations should protect a company reputation, not damage it. Would you trust this organisations advice on employee rights or related legal requirements when it is clear that their culture is not even slightly on the same page?
More generally, risks include poor leadership behaviours going unchallenged, weak oversight of incentives, or subcultures forming within high-pressure departments. Even with clear policies and Conduct Rules in place, if nobody is accountable for living them day-to-day, they lose their power.
People may start to believe those who ‘hit targets’ are protected, even when their behaviours undermine the organisation’s values and focus on compliance . This breakdown in cultural alignment is what leads to enforcement action. This is not because firms lacked rules, but because they failed to apply them often due to a lack of joined up thinking.
These siloed failures can be incredibly costly, resulting in hefty fines, reputational damage, and long-term disengagement from staff. In contrast, joined-up governance ensures that performance management, training, risk, compliance, and workplace safety speak the same language — one grounded in fairness, evidence, and behavioural accountability.
Embedding a strong compliance culture isn’t about adding more layers of control — it’s about reinforcing the right behaviours consistently, at all levels. HR and Compliance must work together to create clarity, foster trust, and build systems that promote psychological safety alongside performance accountability. Companies that engender psychological safety make it OK for people to make mistakes and admit that they don’t know everything. If they fear negative consequences for admitting errors or a need for support, then risks are swept under the carpet. This is where bigger compliance risks can emerge.
Compliance culture must be role-modelled by leaders, supported by training, and made real through objectives, feedback, and escalation. The HR team plays a vital role in making this cultural commitment visible, measurable, and sustainable.
Whether you’re responding to the Consumer Duty, SMCR, or internal performance expectations — the importance of culture cannot be overstated. It is the thread that connects your firm’s values to everyday decision-making, and it is the measure by which regulators and customers judge your integrity. Systems like Actus help firms move from intention to implementation. By embedding compliance culture into working hours, development discussions, and leadership expectations, they ensure that people are empowered to do the right thing. Not just because the rules say so, but because the culture demands it.
Consumer Duty isn’t a one-off compliance task, it’s a long-term shift in how financial firms operate. Relying on spreadsheets increases risk and reduces visibility. This is why more firms are turning to Actus Oversight– a purpose-built Consumer Duty software solution.
With Actus Oversight, you can:
With intuitive dashboards, automated tracking, and robust reporting, Actus Oversight delivers clarity, control, and confidence. Everything you need to meet the FCA’s expectations.
Book a demo to see how Actus Oversight can help you confidently meet the FCA Consumer Duty
Read our blog for more compliance resources
Please complete the details to receive a 3 minute system tour direct to your inbox!
If you are looking for performance management software for 1000+ employees get in touch for a quote today.
Talk to one of our partnership specialists today.
Fill in your details below and then please check your email for a link to the 3 minute overview of Actus Software
If you have any questions, enquiries or just want to say how much you like us (or what we can do better), please drop us a line.