Governance

Recent Articles

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  14.04.2023

  Re­view of the Seni­or Man­agers and Cer­ti­fic­a­tion Re­gime (SM&CR)

  On 30 March 2023, the Prudential Regulation Authority (“PRA”) and Financial Conduct Authority (“FCA”) (the PRA and FCA together being the “Regulators”) published a joint Discussion Paper (DP1/23) seeking input on potential ways to improve the Senior Managers & Certification Regime (“SM&CR” or the “Regime”). HMT has also separately launched a Call for Evidence to review legislative aspects of the regime. In December 2022, the government announced, as part of the Edinburgh Reforms, that HMT and the Regulators...

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  26.07.2021

  New SM&CR for FMIs pro­posed by HM Treas­ury

  Proposed framework The current SM&CR would be modified to recognise that FMIs are not “authorised persons” for the purposes of the Financial Services and Markets Act 2000. The BoE would implement, supervise, and enforce the following: 1. A senior managers regime (“SMR”) The BoE would have the power to determine whether individuals who perform roles that pose a potential risk to financial stability or to the continuing functioning of the FMI have the appropriate competence, expertise, and probity to carry out their roles. FMIs would be required to submit documentation...

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  30.03.2021

  Ex­ec­ut­ive Re­mu­ner­a­tion: Con­sulta­tion on Restor­ing trust in audit and cor­por­ate gov­ernance

  Overview of the Consultation The Consultation follows the high-profile failure of a number of companies, including Carillion and BHS. While its primary focus is on the audit profession and plans to break up the dominance of the Big Four audit firms, the Chief Executive of Accountants at the ACAEW, Michael Izza, has said that the Consultation is “as much about corporate governance reform as it is of the audit profession”.[1] The Consultation’s key proposals include: New reporting and attestation requirements covering internal controls, dividends and capital maintenance decisions...

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  03.03.2021

  Re­mu­ner­a­tion and Cul­ture for Reg­u­lated Firms

  What does ‘culture’ mean? The FCA defines ‘culture’ as the habitual behaviours and mindsets that characterise an organisation[1] and has been recognised as including the norms, which may be unwritten and unspoken, that determine a firm’s standards when carrying on its business, including in the context of designing new products, dealing with customers, incentivising staff and dealing with problems (both internal and external). As Andrew Bailey (former CEO of the FCA) said, “We define culture quite simply as the typical behaviours that characterise a firm.”[2]...

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  16.11.2020

  Ex­ec­ut­ive Re­mu­ner­a­tion in a post-Cov­id world

  Setting the scene - the UK Corporate Governance Code All Premium-Listed companies in the UK must ‘comply or explain’ when it comes to the principles of the UK Corporate Governance Code (the “Code”). A number of others also adhere voluntarily to the Code. The Code obligation extends to remuneration policy, which should be transparently designed to promote long-term, sustainable success within the company and align to the company’s purpose and values. The Code also asks remuneration committees to be ‘sensitive to pay and employment conditions elsewhere in the...

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  17.07.2020

  FCA pub­lishes Fi­nal Guid­ance and Dear CEO let­ter on Coronavir­us and Safe­guard­ing Cus­tom­er­s' Funds

  The Guidance The Guidance aims to temporarily strengthen Payment Firms’ approach towards safeguarding and prudential risk management in light of Coronavirus and subsequent economic pressure. The FCA will conduct a full consultation later in 2020/21 on changes to its Approach Document. The key takeaways from the Guidance are as follows: Proposals for Payment Firms subject to safeguarding requirements Keeping records and accounts and making reconciliations – Where there is potential for discrepancies regarding the records and accounts of “relevant funds”, Payment Firms should...

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