Background to the report
The Bank of England (the Bank) is the UK’s central bank. Its core mission is to promote the good of the people of the UK by maintaining monetary and financial stability.
The Bank seeks to ensure it complies with legal and ethical requirements, and it publishes its staff code of conduct setting out the key conduct policies its people should follow.
Past incidents at the Bank and in other public bodies have shown how failure to demonstrate integrity can harm an organisation’s credibility and reputation. The Bank commissioned full reviews of its own incidents, including how it manages conflicts of interest.
Scope of the report
This report examines whether the Bank has efficient and effective systems and processes to manage risks of non-compliance with legal, ethical and staff policy requirements.
The report covers:
- the Bank’s overall approach to managing compliance risks, and how it has developed this since 2017
- whether the Bank has the processes and information it needs to identify, assess and monitor compliance risks effectively
- whether the Bank responds to compliance risks in a way that supports timely and effective decisions, and uses lessons to improve its approach
Conclusions
Following high-profile incidents in 2017 and 2019, the Bank overhauled its approach to identifying and managing non-financial risks. It has made good progress in developing new and improved systems and processes to understand the risks it faces of non-compliance with legal and ethical requirements and staff policies, and to manage these in a responsive and proportionate way.
This includes a clear set of relevant metrics to monitor how risks are changing over time, which it reports regularly to appropriate decision-makers, and a range of actions to improve risk awareness and understanding among staff.
However, the Bank recognises that it has more to do to ensure its systems and processes for managing compliance risks are effective in practice, and it is planning further improvements.
As it takes forward its work in this area, the Bank should ensure it continues to improve the quality and consistency of the information it records on risk assessment and monitoring, and the awareness and confidence of staff to flag risks or highlight concerns.