In recent conversations with leaders across the insurance sector, one theme keeps resurfacing, not as an HR topic, not as a wellbeing initiative, but as a governance concern: psychological safety. Once considered a cultural aspiration, it is now firmly on the regulatory horizon. With the FCA placing non-financial misconduct at the centre of conduct expectations, the environment in which people speak, challenge, report and raise concerns has become a matter of oversight, accountability and risk.
When people do not feel safe to speak up, risk does not disappear. It goes underground and regulators know this.
Why silence is not neutral
Psychological safety is the belief that you can raise ideas, questions, concerns or mistakes without fear of humiliation, retaliation or exclusion. It is what allows challenge to surface, errors to be corrected early and poor behaviour to be addressed before it becomes harm. Without it, silence becomes the dominant organisational behaviour and silence is not neutral.
When people feel unsafe, they stay quiet. When they stay quiet, misconduct goes unreported. When misconduct goes unreported, harm occurs, to individuals, to customers, to firms and ultimately to trust in the sector itself. This is why the FCA now explicitly links unsafe cultures, non-financial misconduct and behavioural failures to governance weakness. Psychological safety is not separate from conduct risk. It is the condition that determines whether conduct risk can be seen at all.
A psychologically unsafe culture is not just unproductive. It is a risk environment.
What leaders do not hear, they cannot fix
In cultures with low psychological safety, employees do not stop caring about the culture, they stop speaking. Talent leaves quietly. Small issues escalate unseen. Poor behaviours become normalised. Ethical lines blur slowly, not suddenly. Leaders are left managing what they can see, unaware of what they cannot. When organisations lose their ability to hear themselves, they lose their ability to self-correct.
Most organisations already have policies, whistleblowing channels, grievance procedures, codes of conduct and values statements. But psychological safety is created by daily behaviour, leadership signals, relational trust and the lived experience of people at work, regardless of their individual differences. FCA culture monitoring requirements are not only interested in whether policies exist. They require evidence of a psychologically safe culture:
- Do employees feel safe to raise concerns?
- Are protected groups experiencing the culture differently?
- Do they believe they will be treated fairly when they do?
- Do they see poor behaviour addressed, or tolerated?
- Do they trust leadership intent, or protect themselves from it?
These questions cannot be answered through compliance alone. They require insight into the human system and the culture of the organisation. This is where culture moves from an abstract idea to a governance responsibility.
Measured, not inferred
Psychological safety can no longer be assumed. Silence is not evidence of health and often it is evidence of fear. That is why psychological safety must be measured, not inferred. It is predictive of decision quality, ethical behaviour, innovation, inclusion, risk exposure and resilience. It varies significantly across gender, ethnicity, age, disability, sexual orientation and organisational level and it tells leaders where risk is likely to surface or where it is likely to remain hidden.
Built on eight years of research and validated across thousands of employees, Kintris's Scientific Culture and Benchmarking Framework enables organisations to measure and understand psychological safety and culture through a rigorous, evidence-based lens. With five core culture metrics, 17 sub-dimensions and 57 data points, it provides leaders with a measurable and comparable view of the lived cultural experience across teams, levels and demographic groups. For Boards and CEOs, this means no more assumptions, no more waiting for annual surveys, no more uncertainty in Fit and Proper discussions and no more risk of overlooking vulnerable or marginalised groups.
Final reflections
Governance, ultimately, is what psychological safety has become. It is no longer a nice-to-have. It is not a soft issue. It is not separate from performance, risk or regulation. It is the condition that determines whether organisations learn, adapt, correct and act with integrity, or whether they drift slowly into failure, unnoticed until the damage is already done.
When people feel safe to speak, organisations can see themselves clearly. When they cannot, organisations fail quietly long before they fail publicly. That responsibility and that opportunity, now sits with leadership. We have the tools. We have the frameworks. We have the insight. What is needed now is the will to act.