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The Guidelines highlight the importance for institutions to consider whether candidates have the knowledge, qualification and skills necessary to safeguard proper and prudent management of the institution. The Guidelines also foster more diverse management bodies and, therefore, contribute to improved risk oversight and resilience of institutions.
CRD and MiFID II include measures to remedy weaknesses identified during the financial crisis regarding the functioning and composition of the management body within credit institutions and investment firms and the qualifications of their members. When appointing members of the management body, institutions should ensure that the members have the reputation, knowledge, experience and skills necessary to safeguard proper and prudent management of the institution.
These joint Guidelines specify the notions of:
In particular, the members of the management body should have sufficient time to cover all the necessary subjects in depth, in particular the establishment of business and risk strategies and the management of the main risks. The management body, collectively, should possess adequate knowledge, skills and experience to understand the institution's activities, including the main risks. In this respect, the Guidelines provide a non-mandatory tool, covering all relevant areas of knowledge and experience that should facilitate the assessment of its collective suitability.
Additionally, the Guidelines provide further guidance on the scope of assessments to be made, the assessment process for institutions and competent authorities, and related policies.