Why firms are doubling down on communication amid deregulatory noise

In this piece for Investment Week, Bev Shah, co-CEO at City Hive, looks at the diverging regulatory agendas across the globe, and why more firms need to step up to the plate in terms of transparency

In recent months, the political climate in the US has taken a sharp turn toward deregulation.

Against this backdrop, it is easy to assume investment firms, particularly those with a global footprint, would use this as an opportunity to retreat from transparency and reduce the flow of information shared with their clients.

After all, less regulation often means fewer requirements to disclose.

Yet, the reality on the ground tells a very different story.

Far from stepping back, we are seeing firms reaffirm their commitment to transparency, embracing it as a non-negotiable aspect of their business.

This shift is not just about compliance; it is about integrity and building trust.

Sharing non-financial information – such as insights into corporate culture, governance and the environment in which fund managers operate – has become a vital part of how firms engage with their clients and position themselves as stewards of capital.

Why transparency is more than compliance

Transparency is not brave - it is good business. Firms that openly share information about their culture and values send a strong message to their clients: they are willing to be held accountable.

This level of communication provides clarity not only about financial performance but also about the non-financial aspects of their operations, which are increasingly recognised as critical for effective analysis.

For investors, understanding the environment in which fund managers operate can be as important as reviewing their portfolios.

Corporate culture, decision-making processes, and governance structures provide crucial context that supports risk assessment and ensures alignment with long-term goals.

Transparency in these areas is not just a nice-to-have; it is foundational to a firm's credibility and reputation.

This is where initiatives like ACT, the Corporate Culture Standard, come into play.

With ACT gaining momentum, we are seeing more firms adopt its framework, not as a regulatory requirement but as a tool to demonstrate their commitment to a higher standard.

Rather than shy away from these expectations, they are leaning into them, signalling that they are not afraid of scrutiny.

The deregulatory divide: US vs Europe

However, this commitment to transparency is being tested, particularly by the widening regulatory divide between the US and Europe.

While Europe continues to raise the bar on governance and ESG disclosures, the US appears to be moving in the opposite direction.

This has led some large multinational firms to take a curious approach to branding.

They are presenting themselves differently depending on the region they are operating in.

For example, a firm distributing funds in the highly regulated European market might highlight its sustainability credentials, while the same firm might downplay these aspects in the US, where deregulation has made such commitments less commercially necessary.

This raises important questions about culture.

Are these firms the cohesive, values-driven organisations they claim to be, or are they opportunistically shaping their messages to suit regional audiences?

And if the latter is true, what does that say about the culture at the parent level?

These are questions those investors – and indeed, regulators – must ask.

Culture is not something that can be compartmentalised by geography. A firm that claims to value transparency and integrity must demonstrate these principles consistently, regardless of where it operates.

Anything less should invite scrutiny.

Integrity as a competitive advantage

The firms that stand out in today's landscape are those that recognise transparency as a marker of integrity.

They understand their clients are not just looking at performance metrics – they are also evaluating the environments in which decisions are made, the values that underpin those decisions, and the people driving them.

By embracing initiatives like ACT, these firms are positioning themselves as leaders, not followers. And some 27 investment firms have committed or recommitted to ACT for 2025.

That is a 58% growth in signatories over the past year.

These companies are not waiting for regulation to dictate their actions; instead, they are proactively demonstrating their commitment to good governance. 

Transparency and consistency build trust, and trust is the foundation of long-term client relationships.

In a world where public confidence in financial institutions is fragile, firms that embrace this approach will find themselves not only surviving but thriving.

It is smart business.

Finally…

The political noise around deregulation in the US may tempt some firms to pull back on transparency, but the best firms are doing the opposite. They recognise that integrity is not a regional value — it is a global one.

At a time when some firms are branding themselves differently depending on which side of the Atlantic, they are operating on, it is more important than ever to dig deeper into corporate culture.

Transparency is not about being brave; it is about showing who you really are. And the firms willing to embrace this are the ones we should be watching.

With the continued growth of ACT, we are seeing more firms step up to the plate, not because they are required to. 

That is integrity in action.

This article first appeared in Investment Week.

For more information on ACT visit the Investors ACT website.