At the Building Societies Association Corporate Governance Seminar FSA Director Graeme Ashley-Fenn addressed the effectiveness of corporate governance, how it works in practice and the implications of the Walker review.
Corporate governance is high on the FSA’s radar. In October 2009 the FSA issued a CEO letter providing guidance on its approach and the process for Significant Influence Function (SIF) applications. More recently, the FSA has published Consultation Paper CP10/3 outlining the FSA’s latest thinking on this subject.
Part of Graeme Ashley-Fenn’s role at the FSA includes overall responsibility for the approved persons regime, which is the framework for ensuring that individuals in key roles at firms are fit and proper to manage the risks inherent in their business models. The approved persons regime is a vital element in ensuring that firms are well governed.
He explained in more detail the FSA view on corporate governance, its expectations and how these could impact on the business sector. After briefly providing some background context, he addressed four key questions:
· What effective governance looks like?
· How we aim to embed effective governance in firms
· How our processes work in practice
· The implications of the Walker review – particularly focusing on the role of non-executive directors and risk oversight and management?
He concluded by saying that “although we are clear on the direction we want to go in, some of the things I’ve spoken about are at the proposal stage. I would encourage you all to respond to our Consultation Paper”
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