Chapter 5 - Senior Management Competence And Governance Flashcards
Board subcommittees
Name 5
Risk
Remuneration
Audit
Investment
Nomination
UK governance code
LEARS
Leadership
Effectiveness
Accountability
Remuneration
Shareholder relations
Responsibilities of directors
API SAD?
Act in accordance with company’s constitution
Promote success of company
Independent judgement
Skill care and diligence
Avoid conflict of interests
Declare personal interest in transactions
Role of NED
Purpose?
Attributes - BEKS?
Custodians of governance
Critical friend
Assess board performance
Bring challenge and diversity of insight
Strategy
Performance
People
Risk
Behaviours
Expertise
Skills
Knowledge
FCA core competencies for SIF
MR BFG?
Apply to NEDs
Market knowledge
Risk and controls
Regulatory
Business model and strategy
Financial analysis and controls
Governance and oversight controls
FCA fit and proper requirements
Honesty Integrity Reputation Competence and capability Financial soundness
Competency policy
Purpose?
FIT PM
Framework
Improve performance
Talent development
Performance Management
Questions to test governance of competency?
Framework
Lines of reporting
Evidence and reporting
Record keeping
Review of policy and processes
Escalation
Plans to address issues
Communication
Reporting to regulator
Controls to ensure effective implementation
How to measure competence
Performance appraisal
Competency based interview/review
External or independent assessment
360 feedback
Peer review
Knowledge based assessment
CPD
Statement of Professional Standing
Who issues?
Four areas?
Accredited body like CII
Ethical code
Level 4 exam
Appropriate CPD
Approved Persons compliance
Board responsibilities
CRASM?
Compliance and integrity
Regulate the executive
Approve plans Accounts and budgets
Selection of executive, reward and Succession planning
Mitigate risk and supervise risk management
FRC guidance on board effectiveness
2009 review of Higgs report
Effective board should not necessarily be a comfortable place. Challenge essential
Direction for management
Display ethical behaviour consistent with values
Performance culture that adds value
Decision making based on clear line of sight into business
Embraces evaluation of effectiveness of governance
NEDs should have formal tailored induction