Consumer Duty Board Reports are now a critical governance artefact. They provide Boards with an annual, evidence‑led view of whether retail customers are achieving good outcomes in practice and where decisive action is required. As firms move from implementation to embedded Consumer Duty oversight, the quality of these reports is increasingly becoming a focus of supervisory scrutiny.
Moreover, the FCA has made clear that it is using Consumer Duty Board Reports as the primary supervisory lens to assess how effectively firms have embedded outcomes monitoring in practice, including through its multi‑firm Outcomes Monitoring Review, the findings of which are expected to be published later in 2026.
Drawing on Square 4’s multi‑firm reviews across both reporting cycles, including detailed analysis of over 30 Consumer Duty Board Reports across multiple market sectors as part of our Consumer Duty research, we have seen clear progress, but also persistent gaps that continue to undermine the effectiveness and credibility of many reports.
What good looks like
The strongest Board Reports are genuinely Board‑facing and outcome‑focused. They clearly explain:
- what ‘good’ outcomes look like,
- what the evidence shows in practice,
- where outcomes fall short and why, and
- what actions are being taken, by whom, and by when.
These reports quantify harm where material, segment outcomes by product and customer group (including vulnerability), bring together quantitative and qualitative insight, and make clear whether the Board concludes it is meeting Principle 12, the cross‑cutting rules and the four outcomes.
Common weaknesses we still see
Despite clear progress in Year 2, material weaknesses remain across many Consumer Duty Board Reports. The most common issues include:
- Executive summaries that describe activity but do not clearly articulate conclusions, emerging risks, or the decisions the Board is being asked to take.
- MI‑heavy reporting with limited interpretation of what the data actually means for customer outcomes across the end‑to‑end journey.
- Insufficient quantification of good versus poor outcomes, including the scale, severity and materiality of customer harm.
- Over‑reliance on inputs and process metrics, rather than evidence of what customers experienced in practice.
- Weak evidence of consumer understanding, with reports focusing on communication activity rather than testing what customers actually understood, where friction exists, and what has changed as a result.
- Customer support reporting that does not clearly evidence whether customers receive timely, effective support, particularly at points of difficulty, vulnerability or detriment.
- Monitoring of outcomes for vulnerable customers that lacks sufficient segmentation to demonstrate whether outcomes differ from other customers, why any differential exists, and how actions are prioritised and tracked.
- Under‑developed oversight of distribution chains and third parties, despite firms retaining full accountability for customer outcomes, regardless of who interacts with the customer.
- Second and Third Line assurance is generally included, but not consistently elevated to inform Board judgement or the overall Consumer Duty conclusion.
- Actions and remediation plans that lack clear linkage to evidenced outcomes, limiting Board visibility over progress, closure and sustained impact year‑on‑year.
- Business strategy sections that describe future change but stop short of evidencing how strategic decisions, such as products, pricing, distribution and servicing models, have been assessed against Consumer Duty obligations and customer outcomes.
- Culture sections that remain narrative or activity‑based, with limited outcome‑focused evidence showing how expected behaviours are embedded and consistently driving good customer outcomes.
In several cases, Board challenge and approval are implied rather than explicitly evidenced, weakening the report’s effectiveness as both a governance tool and a regulatory artefact.
Looking ahead to Year 3
The FCA has been clear that Consumer Duty is now firmly in its embedding phase. Boards are expected to use ongoing monitoring to understand whether customers are receiving good outcomes in practice, not simply whether processes are being followed.
Future‑proofed Board Reports must clearly show:
- how insight has driven decisions,
- how foreseeable harms are identified and mitigated,
- how outcomes are tracked over time, and
- how learning is shaping strategy, distribution, customer support and culture.
Firms that can clearly evidence challenge, accountability and sustained improvement will be far better positioned as supervisory expectations continue to evolve.
How Square 4 can help
Square 4 works with firms across the market to design, review and independently challenge Consumer Duty Board Reports, helping Boards move beyond compliance to defensible, decision‑ready reporting.
Our support focuses on strengthening outcome evidence, crystallising Board conclusions, and ensuring reports stand up to regulatory scrutiny.
To discuss how we can support your Year 3 and beyond Board Report, contact us at hello@square4.com
Sara Haworth
Principal Consultant
