1. Good Market Conduct
Recovery of financial services; based on
regulations or values?
Presentation for CCT
Conference 2012
September 2012

2. 1 March 2011
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3. Why focus on „treating customers fairly‟ and on
„improving corporate culture‟?
“Governments and regulators don‟t understand how a bank works,
they don‟t want to, so they come up with stupid legislations. But we
have no choice, we must comply” – Chief Risk Officer bank
“We‟re working very seriously on culture, but as regulators are only
interested in the evidence, we‟ re putting the words „treating customers
fairly‟ and „cultural change‟ more often in the minutes of our board
meetings.” – CEO bank
“It‟s a shame that TCF has become a priority of regulators; it‟s our
reason for being, it should be at the heart of our business” – numerous
Board Members
From interviews held in
September 2012
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4. Signs of frustration and confusion
“We put huge efforts in changing our complete way of working
because that‟s what we want, but the constant public bashing is very
frustrating.” – CEO insurance company
“More regulation doesn‟t bring about a greater sense of responsibility
and more creativity, on the contrary” – Supervisory Board member
insurance company
“I would never work at this bank – too complex, too many procedures
and this bank has no friends” – Supervisory Board member bank
From interviews held in
September 2012
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5. Other industries
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6. Complexity of financial services industry
• Conflicting roles: public utility vs. private company
• Different feedback loop
• Complexity & intangibility of products
• Raw material = reward
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7. Good market conduct - Vision
Successful enterprises derive their raison d‟etre from simultaneously
meeting the needs of all their stakeholders: clients, employees, investors,
business partners and the society at large.
The achievement of the organization’s short-term goals is aligned with the
long-term needs of its stakeholders.
The strategy of these enterprises is aimed at actively aligning the values,
interests and expectations of its stakeholders with those of the
organization itself.
The leaders of these enterprises display these tenets both in words and
actions.
Good market conduct-companies give account to all their stakeholders in an
integrated manner.
Barrett Values Centre – 2012 International Conference 7

8. PwC‟s Good Market Conduct approach
Integrated reporting
ACCOUNTABILITY
Management control CONTROL
Design & Operate
EXECUTION
adequate processes
LEADERSHIP
Walk the talk
STAKEHOLDERS
VALUES
Setting strategic objectives
Interaction with stakeholders
Barrett Values Centre – 2012 International Conference 8

9. Exercise
Debate about restoring trust
Let’s divide the group into two subgroups:
A
“Restoring trust based on regulation”
B
“Restoring trust based on values”
You will have 10 minutes with your subgroup to prepare the debate. Good luck!
Round 1 Stand your ground
Team A will have one minute to defend their statement
Team B will have one minute to defend their statement
Round 2 Time to react
Team A will have max. one minute to ask only questions
Team B will have max. one minute to ask only questions 3 minutes for group
consultation
Round 3: Closing speech
Team A will have two minutes for their closing speech
Team B will have two minutes for their closing speech
Barrett Values Centre – 2012 International Conference

10. Hand-out – Team A
Team A “Restoring trust based on regulation”
You will have 10 minutes with your subgroup to prepare the debate. Good luck!
Round 1 Stand your ground
Team A will have one minute to defend their statement
Team B will have one minute to defend their statement
Round 2 Time to react
Team A will have max. one minute to ask only questions
Team B will have max. one minute to ask only questions 3 minutes for group
consultation
Round 3: Closing speech
Team A will have two minutes for their closing speech
Team B will have two minutes for their closing speech
Arguments to support your statement:
• Regulation is the only way to embed compliant behavior in an organisation
• Trust is good, control is better
• Employees need limits and boundaries to work effectively
Please feel free to put these arguments aside and come up with your own.
Barrett Values Centre – 2012 International Conference

11. Hand-out – Team B
Team B “Restoring trust based on values”
You will have 10 minutes with your subgroup to prepare the debate. Good luck!
Round 1 Stand your ground
Team A will have one minute to defend their statement
Team B will have one minute to defend their statement
Round 2 Time to react
Team A will have max. one minute to ask only questions
Team B will have max. one minute to ask only questions 3 minutes for group
consultation
Round 3: Closing speech
Team A will have two minutes for their closing speech
Team B will have two minutes for their closing speech
Arguments to support your statement:
• It is not possible to write a rule to control every possible behavior or cover every possible circumstance
• Regulation is killing for motivation, autonomy, creativity and innovation of people
• Values give people a sense of mission and purpose
Please feel free to put these arguments aside and come up with your own.
Barrett Values Centre – 2012 International Conference

12. We think …
It is time to put good market conduct on each board agenda
By linking values and stakeholders expectations (including rules and
regulations) with the strategy
And translate that into a sustainable connection between the products,
services and clients
To be transparent and clear about what the strategy means for the
organisation and how it drives the right behaviour of management and
employees
To execute on it and make it true by linking it to governance, performance
management systems and internal controls.
And finally, to be transparent about it to realize confident, informed and
empowered stakeholders.

13. PwC Contacts
Wendy van Tol
PwC
Tel: +31 (0)88 792 7606 | Mobile: +31 (0)6 2353 4450
E-mail: wendy.van.tol@nl.pwc.com
Olivier Sueur
PwC
Tel: +31 (0)88 792 4920 | Mobile: +31 (0)6 1058 0264
E-mail: olivier.sueur@nl.pwc.com
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