FSA tackles governance and risk management
by Gill Montia
Story link: FSA tackles governance and risk management
The Financial Services Authority (FSA) has published a consultation paper on effective governance standards and the role of senior management at firms.
The proposals implement recommendations contained in Sir David Walker’s review of corporate governance published in November, and follow up on a “Dear CEO” letter sent out in October 2009.
The letter tackled the shortcomings exposed by the financial crisis in the governance and risk management of some regulated firms and outlined the regulator’s new approach to approving and supervising persons performing “significant influence functions”.
Banks and insurers were strongly encouraged to establish board risk committees and appoint top executives as chief risk officers.
The FSA’s director of permissions, decisions and reporting, Graeme Ashley-Fenn, explains: “Our more intrusive approach continues to place a great deal of emphasis on governance and therefore the senior management at firms. This starts with a firm’s own due diligence.”
He adds: “Our experience shows that once a firm gets its corporate governance right; with a strong and effective board, everything else flows from that.”
The consultation period closes on 28th April 2010 and the FSA hopes to have final rules in place during the third quarter of the year.