Finra noted that one definition of culture is “the set of explicit and implicit norms, practices and expected behaviors that influence how employees make and carry out decisions in the course of conducting the firm's business.”

In that vein, Robert Colby, Finra’s chief legal officer, said in January at a Financial Services Institute conference that culture is the attitude a firm brings in how it conducts its business.

“It’s usually top-down; it’s the leadership and how they communicate,” he said. “We’ll be looking at the frameworks for deciding, disseminating and instilling the firm’s culture through the organization.”

Colby added that Finra will look to see how a firm handles conflicts, how they follow up on violations to see why they occurred and what they should be doing differently.

“We’re going to begin with the large firms first because they typically have a pretty well-developed thought process on this, and we’ll try to understand what they have structured and how they structured it,” he said. “In part, what we’re trying to do is bring the thinking that’s been done already and instill it more broadly to the industry.”

More Than Lip Service

“The way I see the Finra thing is it's as much about the culture of compliance in your firm as it is the culture of your firm,” says Andrew Daniels, managing principal of business development at Commonwealth Financial Network, one of the country’s largest broker-dealers. “I think they’re intertwined.”

Daniels notes that culture is a component of Commonwealth’s human resources process in its Waltham, Mass., home office in terms of who and how they hire, and what they do with those people after they’re hired.

“It’s how we train them, such as a program called Common Knowledge, which is a week-long program at the home office where we share the legacy of the firm and why who we are matters and how that separates us from our industry,” he says. “Culture can’t be lip service; it has to be what you do all of the time.”

Of course, part of the compliance/culture conundrum comes from the very nature of the business.