Culture and Conduct Under Scrutiny: Lessons from the FCA's Decision on Crispin Odey
The Financial Conduct Authority’s (FCA) recent decision to fine and ban Crispin Odey from the financial services industry serves as a stark reminder of the profound impact that poor culture and weak governance can have on a firm’s long-term stability and reputation. This case highlights how unchecked power by senior individuals can create a toxic environment where misconduct is tolerated, internal controls are evaded, and accountability is undermined - ultimately exposing firms to significant regulatory, operational and reputational risks.
The FCA's findings focused not on the sexual harassment allegations, but on Odey’s deliberate obstruction of internal disciplinary processes and his abuse of power to shield himself from accountability. His actions included firing members of the executive committee to derail investigations and pressuring individuals to overlook or conceal misconduct. The FCA’s decision underlines how such misconduct thrives in a culture where power is concentrated at the top and governance mechanisms are weak or compromised.
“Senior individuals can have a substantial impact on the businesses they lead, as well as upon confidence in the wider financial services industry.”
(Notice of Decision: Robin Crispin William Odey (2025), Section 4.12)
This case sends a clear message to the financial services industry: culture and governance failures are not just internal management issues; they are regulatory concerns that can have far-reaching consequences for a firm’s viability and standing. As the FCA prepares to introduce new rules on non-financial misconduct (NFM) in June 2025, firms must proactively strengthen their cultural and governance frameworks to avoid similar pitfalls. The Odey case provides a valuable opportunity for firms to reflect on their own operations and address any cultural and structural vulnerabilities before they become regulatory flashpoints.
The Link Between Culture and Misconduct
Culture is often described as “what happens when no one is watching”. It encompasses the shared values, behaviours and decision-making patterns that define how a firm operates. In Odey’s case, the FCA identified a culture where Odey’s dominance created an environment where inappropriate and toxic behaviour was tolerated, and accountability was non-existent or suppressed.
A toxic culture can have several knock-on effects:
Employees may feel unable to speak up or challenge poor behaviour for fear of retaliation.
Ethical decision-making can be compromised when commercial pressures or internal politics override integrity.
Over time, poor culture erodes trust within the firm and damages relationships with regulators and clients.
Fear of repercussions can result in whistleblowing mechanisms and grievance procedures being underutilised or ineffective.
A culture of silence and complicity can enable misconduct to persist or go unchecked, increasing regulatory and reputational risk.
As outlined in the decision notice, “the Authority considers that a workplace culture where people feel unable to report concerns and have confidence that they will be independently and fairly assessed creates a risk that issues are not raised and improper conduct is not challenged” (4.65).
Furthermore, the FCA’s decision highlights how a culture of deference and fear can create an environment where dominant personalities escape investigation. Addressing cultural weaknesses requires not only strong governance but also an intentional effort to embed ethical behaviour and accountability into everyday operations.
Governance Failures and Conflicts of Interest
Odey's ability to obstruct internal processes and remove senior executives exposed significant governance failures at Odey Asset Management (OAM). Governance structures are intended to provide checks and balances to prevent such abuse of power. However, when governance frameworks are weak or easily overridden, the risk of misconduct increases exponentially.
Inadequate governance also amplifies conflicts of interest. Odey’s actions demonstrate how unchecked power at the top can distort decision-making and undermine the fiduciary duty owed to clients and stakeholders. This underscores the importance of independent oversight and transparent decision-making processes.
The FCA’s findings pointed to specific governance failures, including:
A lack of independent oversight, allowing Odey to override executive decisions.
Failure to implement disciplinary measures effectively due to Odey’s influence.
Inability to hold senior leadership to account, creating a double standard for misconduct.
Poor conflict management, with personal interests of leadership overriding client and stakeholder obligations.
Weak escalation procedures, which allowed Odey’s behaviour to persist without intervention.
Strong governance requires more than just policies and procedures — it demands independent oversight, robust internal controls, and a culture where challenging senior leadership is not only allowed but encouraged.
Whistleblowing Mechanisms
The decision notice highlights how Odey's unchecked power extended to human resources (HR) processes. Firing senior executives to disrupt investigations into his conduct not only showed a disregard for governance but also reflected the imbalance of power between senior management and employees.
Whistleblowing mechanisms are critical in enabling firms to detect and address misconduct early. However, these systems must be independent, trusted, and capable of withstanding internal political pressures. The decision notice also highlights the challenges of internal whistleblowing mechanisms and the need for employees to have confidence in external reporting channels, such as the FCA’s whistleblowing framework. When internal processes fail or when employees fear retaliation, external whistleblowing to the FCA or other regulatory bodies become crucial avenues for raising serious concerns about misconduct, governance failures, or regulatory breaches. Firms must ensure that employees are aware of their right to report externally and that no policy or cultural barriers should discourage them from doing so.
Key weaknesses identified in the Odey case included:
Fear of retaliation among staff, leading to underreporting of concerns.
Inadequate training on misconduct and whistleblowing procedures.
Failure to protect whistleblowers from retaliation and ensure anonymity.
Ineffective escalation and resolution mechanisms for reported misconduct.
HR teams must have the authority and independence to challenge senior leadership and protect employees from misconduct. Without effective whistleblowing mechanisms, even well-designed policies will fail to prevent or address cultural issues.
Intersection with the Upcoming Non-Financial Misconduct Rules
The FCA’s decision on Odey comes at a pivotal time, as the regulator is preparing to introduce new rules on NFM in June 2025. These rules will make it clear that behaviour such as bullying, harassment and other forms of misconduct are not merely internal HR issues - they are regulatory matters with direct implications for a firm’s fitness and propriety.
Under the new requirements, firms will be expected to demonstrate how they address cultural issues and ensure that senior managers are held to account for fostering a positive working environment. The FCA has made it clear that a toxic culture is not only a reputational risk but also a supervisory concern.
Firms should start preparing now by:
Establish clear definitions and protocols for addressing NFM.
Ensure senior leaders are fully aware of their responsibilities under the Senior Managers & Certification Regime (SMCR).
Review governance and HR structures to align with the FCA's expectations on NFM.
Enhance whistleblowing procedures to protect employees and encourage reporting.
Provide training to employees on recognising and responding to NFM.
A Call to Action
The Odey case is a powerful reminder that culture and conduct are not insignificant issues — they are fundamental to a firm’s operational resilience and regulatory standing. A dominant, unchecked personality at the top can unravel years of progress on governance, compliance and ethical standards. The FCA’s upcoming NFM rules, coupled with increasing regulatory scrutiny on culture and governance, signal that firms need to focus on more than just financial performance.
Firms must now take a proactive approach to identifying cultural weaknesses, strengthening governance and embedding accountability at all levels. The key question for every financial services firm is not whether they will face a cultural or governance challenge, but whether they are prepared to address it before it escalates into a regulatory or reputational crisis.
To help you get started, we have prepared some key questions on the core topics identified above in our gap analysis found here.
Firms that fail to address these issues risk not only regulatory consequences but also long-term damage to their reputation and employee trust. Now is the time to act – to find out how we can help you, get in touch with our team at ESG@avyse.com