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5 Reasons Why Complaints Management is a Boardroom Issue

Thu 06 Sep 2018

By Adam Cooper, Business Manager, Equiniti Charter

For the C-suite, complaints present both a threat and an opportunity. More stringent regulation and increased reporting obligations that can result in adverse publicity or even financial penalties have seen complaints become a risk management issue.

But complaints also have the power to positively impact the business. By identifying customer service issues, complaints can help the business to adapt and evolve.

It’s these two opposing forces that have seen complaint management increase in importance. There are five key reasons why complaint management now needs to be prioritised and addressed in the boardroom:


The customer-centric culture – the company must demonstrate it has respect for the customer “at the heart of their business model” in accordance with the FCA’s Treating Customers Fairly (TCF) practice. Principle 6 states “A firm must pay due regard to the interests of its customers and treat them fairly”.

Ask yourself if you can prove compliance with PRIN6 effectively through documentation. Are the Management Information (MI) reports shown to senior managers and directors used not just to ensure outcomes are met but improved upon? Is MI used to guide strategic decision making?


Staff skills – to be adopted wholesale, company-wide, staff need to be trained in the TCF principles. Every department, from marketing to sales, support and management should have access to information on products, services and customer liaison to avoid data silos and to enable this information to be used collaboratively.

Complaints handling staff should have specialist training depending on their role in the process, with frontline staff trained to resolve issues speedily, and those handling escalation able to assess and compensate customers within the 8 week timeframe. Staff should be monitored and assessed to determine how effectively they are able to offer suitable advice and discretionary decisions in meeting the TCF criteria.

While complaint management can help implement these workflows, senior management needs to be able to assess and determine where additional staff resource and expertise is needed to help reduce complaints and escalations.


Damage limitation – Senior management are responsible for ensuring regulatory compliance and that the “business is adequately monitored and controlled”, according to the FCA so all complaints should be recorded, monitored, reported and analysed by the company. Meeting these obligations reduces the risks associated with non-compliance such as public disclosure, fines, and suspension from service which the FCA has the power to enforce. Of course, some organisations may still exceed the threshold of 500 complaints in six months and find themselves in the public spotlight. It’s here where a top-down management approach comes into its own, ensuring that PR/Marketing and Sales are aligned to tackle the fallout of disclosure, proactively manage the service offering and reassuring the clientele.


Resolution and redress – Businesses have to be able to assess and deal with complaints correctly to ensure they are meeting their remit under the TCF and to apply the correct level of compensation or redress.

Figures for the second half of 2017 from the FCA show redress is down across all product categories (bar PPI) and fell 13 percent compared to the first half of the year, suggesting that more effective complaint processing is allowing firms to more accurately prove where redress is justified.

For the business this level of insight is crucial. Customers whose issues have been classified as resolved or closed still have the right to take their case to the financial ombudsman so if the organisation can prove due diligence investigations can be resolved more quickly and in their favour. The senior management team must ensure it maintains oversight of complaints upheld and redress decisions in order to ensure it’s got the balance is right.


Management Insight (MI) and oversight – MI can take various forms, from anecdotal to qualitative data, with examples including call or social media monitoring, sales complaints, and customer feedback. MI reports should be reviewed regularly ie at least monthly by the board, TCF committees and champions and should be filtered down, through the business, to allow it to be acted upon by departments who need to meet governance, risk and compliance requirements.

With regards to complaint management, MI provides both immediate and future insights. It can be used to explore why complaints have occurred, with tools such as root cause analysis to identify systemic issues, and it can also be used to help steer the business going forward using forecasting and predictive analytics to help the business take steps to reduce complaints.

At the board level, MI can tend to be looked on retrospectively and many businesses fail to put in place a process to show how MI is assigned and actioned to create an audit trail.


It’s no longer acceptable to consider complaint reporting as a reactive post-sales function. Instead, complaint handling as to become a dynamic process that permeates the business and informs senior management and their departments about where issues are occurring and how to mitigate these.

Yes, complaints are inevitable and processes have to be in place to ensure these are resolved as speedily and favourably as possible. But complaints management can offer far greater value when it becomes a board level issue, such as:

  • Oversight of the business and its operations
  • Effective use of staff and system resources
  • Auditable processes to demonstrate due diligence
  • MI analysis to prevent complaint recurrence
  • Future insight through trends and issues

MMX Compliance provides FCA-compliant complaint management reporting that can empower your business with improved management oversight and control. The solution embeds and provides evidence in support of TCF principles and delivers an internal Quality Assurance function, while tools such as root cause analysis allow data to be interrogated and used to improve operations. To find out how MMX Compliance can provide your business with greater control, contact us today.

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