The CCP Research Foundation's Conduct Costs Project, working with ShareAction, presents here a working paper on a framework for the public disclosure of conduct costs by banks within their Annual Reports. The proposal, which aims to resolve the issues with current disclosure practices in this area, is for a Conduct Costs Report. The CC Report, we argue, should be prepared annually, disclosed within the Annual Report and be subject to senior management appraisal in the context of the bank's agenda to restore trust among its investors and wider stakeholders.
We are aware that a number of banks would like to improve their disclosure (which we would see as welcome evidence of a determination to control conduct risk) but there is a reluctance to be "first mover". With colleagues at ShareAction, we are, as of May 2015, embarking on a series of discussions with banks to try to persuade them of the need for, and advantages of, change. Please do not hesitate to get in contact should you wish to discuss this initiative.