Decision Paralysis: When Personal Accountability Slows Decisions Down

Accountability · SM&CR · Decision-making

Decision paralysis is the state where a choice that should be made keeps being put off: more analysis is requested, the item goes to another committee, or everyone waits for someone else to commit. It happens in every organisation, but it takes a particular form where individuals are personally answerable for outcomes, as senior managers in UK financial services are under the Senior Managers and Certification Regime (SM&CR).

Why personal accountability can make people freeze

The SM&CR was designed so that it is always clear who is responsible for what. Each senior manager has a Statement of Responsibilities, and the firm keeps a map of how responsibilities are shared out. On top of that, section 66A of the Financial Services and Markets Act 2000 contains what is often called the duty of responsibility: a senior manager can be found guilty of misconduct if the firm breaches a relevant requirement in an area they are responsible for and they did not take the steps a person in their position could reasonably be expected to take to prevent it.

Read carelessly, that can sound like “anything that goes wrong on your patch is your fault”. A natural, if unhelpful, reaction is to avoid committing to anything risky: escalate every question, ask for one more report, or wait until a decision has been made for you. Each of those feels safe for the individual, but the business pays for it in delay, missed opportunities and problems that grow while nobody acts.

What the standard actually asks for

The legal test is about reasonable steps, not perfect outcomes. It asks whether the senior manager behaved as someone in their position could reasonably be expected to behave. Doing nothing is not automatically safe under that test. If a problem was visible and the responsible person failed to act, inaction can itself be the failure. The Individual Conduct Rules point the same way: they require people to act with integrity and with due skill, care and diligence, and to treat customers fairly.

In other words, the regime rewards good decision-making: understanding the issue, taking proportionate advice, deciding, and keeping an eye on what happens next. It does not reward avoiding decisions.

Signs that a team is stuck

The same item appears on several committee agendas without a decision.
Requests for “more data” keep coming but the question never changes.
Decisions are made informally but nobody will record them.
Junior staff escalate routine matters because they are unsure who owns them.
Urgent issues wait for one senior person who is unavailable.

Practical ways out

Make ownership unambiguous. Keep Statements of Responsibilities and the responsibilities map current, and make sure people below senior-manager level know who owns which decisions.
Set decision rights and thresholds. Agree what each level can decide alone, what needs a second opinion, and what must be escalated, so escalation becomes a rule rather than a reflex.
Delegate with oversight. Delegating a task does not delegate the responsibility, but clear delegation with regular reporting is one of the most visible ways to show reasonable steps.
Record the reasoning, proportionately. A short note of what was known, what options were considered and why one was chosen protects decision-makers far better than delay does.
Time-box analysis. Decide in advance when a decision will be taken and what information is enough.
Make it safe to challenge and to admit mistakes. The FCA’s 2019 review of the regime in banking found many firms working to build a culture of challenge, escalation and safety to speak up. The same culture helps people decide, because errors surface early and can be corrected.
Review outcomes, not just process. Look back at decisions after the fact and learn from them, without punishing reasonable decisions that turned out badly.

A regime that is still changing

The regulators have acknowledged that the SM&CR can be burdensome. After a 2023 discussion paper and consultations in July 2025, the FCA and PRA confirmed a first set of reforms on 22 April 2026, including more time for some notifications and fewer overlapping certification roles, while keeping the core principle of senior manager accountability. HM Treasury has said it plans to remove the Certification Regime from legislation so the regulators can replace it with a more flexible framework. Firms should watch for further consultations, but the basic lesson stays the same: accountability works best when it helps people decide, not when it stops them.

This article is general information, not legal or regulatory advice.